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Retail Merchants Association Retail ExpoAugust 4, 2009
How to Structure Your Intuition To Develop An Effective Discount Strategy
04/10/2023
Ignaz Semmelweis
Intuitive Vs. Empirical
04/10/2023
Typical Thinking Errors
04/10/2023
1. Availability2. Recency3. Extreme
Predictions4. Gambler’s Fallacy
04/10/2023
Name 3 Dead Presidents!
Think, Shop, Buy Local
Recent Events
Extreme Prediction
04/10/2023
Place Text here
Gambler’s Fallacy
Paul Meehl
Blink!
The Power of Thinking Without Thinking
For The Connoisseur
Our Ice Cream Dreams
•High Redemption Rate•Brand Loyalty• Increase $ Spent/Visit•Profit Per Redemption•Gratuitous Discounting
04/10/2023
“They” Know It All…Right?
1. Identify your options ( in the case study, these would be coupon choices)
2. Identify the things that you want to accomplish : A. Increasing visits (measured by redemptions) B. Increasing Margins C. Increasing dollars spent per visit
4. Avoiding cannibalization (which occurs when people are planning to come anyway and just use the coupon to come and spend less money)
5. Increasing Brand Loyalty (which occurs when people by originals like Strawberry Blondie, Monkey Bites and Founders Favorite as opposed to French Vanilla with Oreos.
6. Weight the things that you want to accomplish
7. Score each option against each other option for all the things that you want to accomplish.
Stop Giving Away Money!
+Usage.2
+Profit per Use .3
+Brand Loyalty .1
-GratuitousDiscount .3
+DollarsPer Visit .1
Total
2 for 5Small
2 for 8Large Sig
$5 off a Square Cake
$3 off a Round Cake
2 for $10Quart 2 go
Mechanical Vs. Intuitive
+Usage.2
+Profit per Use .3
+Brand Loyalty .1
-GratuitousDiscount .3
+DollarsPer Visit .1
Total
2 for 5Small //// 0 0 0 0
2 for 8Large Sig
/// / //// //// /
$5 off a Square Cake
/ //// // /// ////
$3 off a Round Cake
// // /// / ///
2 for $10Quart 2 go
0 / / // //
Counting Is Empirical
Usage.2
Profit per Use .3
Brand Loyalty .1
GratuitousDiscount .3
DollarsPer Visit .1
Total
2 for 5Small 4 0 0 0 02 for 8Large Sig
3 1 4 4 1$5 off a Square Cake
1 4 2 3 4
$3 off a Round Cake
2 2 3 1 3
2 for $10Quart 2 go
0 1 1 2 2
Higher Level Mathematics
Usage.2
Profit per Use .3
Brand Loyalty .1
GratuitousDiscount .3
DollarsPer Visit .1
Total
2 for 5Small .8 0 0 0 0 .82 for 8Large Sig
.6 .3 .4 1.2 .1 2.6$5 off a Square Cake
.2 1.2 .2 .9 .4 2.9
$3 off a Round Cake
.4 .6 .3 .3 .3 1.9
2 for $10Quart 2 go
0 .3 .1 .6 .1 1.2
The Decision
Original with one mix-inSignature in a dipped waffle bowl
My Naked Advice:
• Be aware of errors in your thinking:• Availability• Recency• Extreme Predictions• Gambler’s Fallacy
• Base your decisions on data• Execute to get better returns
Retail Merchants Association Retail ExpoAugust 4, 2009
Bob FischerPhone: 804.780.3308
Blog: www.thenakedportpoliomanager.com
Email: [email protected]
Give Holly your card and get a Cold Stone Coupon (Courtesy of Reach Magazine)
