The bill came to $17.30. I had a fifty-dollar note and, sigh, only twenty cents.
Doesn't this take the wind out of the buying process? When both you and the guy at the counter realise that a huge load of coins have to change hands?
Doesn't this take the wind out of the buying process? When both you and the guy at the counter realise that a huge load of coins have to change hands?
Bills aren't too bad. But for the customer to be handed ninety cents in change - that's at least four separate pieces of metal to store in one's pocket - is less than paradise, isn't it?
So here's an idea: How about a shop which promises no exchange of coins? Customers get the better end of a decimal-oriented receipt. E.g. if the bill comes to $5.40, we'll let the 40 cents go. If it's $7.99, we'll sacrifice the 99 cents.
Foolish because then the store loses a fraction of a dollar for every sale? But think about this:
- Customers will plan to make purchases which 'add up' to the biggest decimal possible; e.g. if two Cokes cost $2.60, heck, why not get a third to make it $3.90 and gain that 90 cents? So the shop gets $3 for three Cokes instead of $2 for two? What's the big problem?
- Customers smile more because they get to 'beat the system' and rake in rewards of their own making; this translates into repeat business (and if the items are generally north of $10-20, what's the big deal about 'losing' 99 cents -tops! - for a receipt?). Oh, and in case there's a concern about customers requesting separate receipts for multiple items - why, put a floor to any receipt to which the 'game' applies (e.g. "Only for all purchases above $5")
- This sets the store apart, especially from those (like 99 SpeedMart) which has a mean poster upfront announcing, "If bill comes to $5.49, receipt is rounded UP to $5.50" - how friendly is that?
No more irritating coins. Pleased shoppers. Good buzz from word-of-mouth. What more can a CASH-ONLY store want?
Thanks for the impressive stats, man! :)
ReplyDeleteI know what you're saying. 10,000 customers is potentially '10,000 x 99 cents' in losses, right?
But this formula doesn't take into account the rising sales due to customers *buying more* i.e. without this 'promotion', the 10,000 may be purchasing only Y amount of goods, but now they're purchasing more...and so revenue rises as well and as long as it rises more than a portion of 99 cents per customer, it's a gain.
Include the *rising number* of customers due to the gig plus the positive word-of-mouth, and hey it may still work?
(Note: I'm well aware that rounding up isn't a new idea. What's 'new' is voluntary loss-taking or consumer 'value-saving' from rounding up. It's almost like Borders Buy3-for-2 promotion...)
Hmmm....might be. But of course this is just a simple model. Those who are so inclined can build more sophisticated models.
ReplyDeleteBut of course the best way is....
...to start a business using this business model. If it is sustainable, sure beats any mathematics I can throw at it. Haha...
But then again, are there any companies adopting this practice in real life?
I am very sure there're one or two small shops in the States trying this - that's where such 'wild' ideas usually take fruition.
ReplyDeleteIn Asia? I don't know...the low-costs-at-all-costs mentality may still be reigning supreme.
Closest example comes to mine is a store at SS2 (near where I stay) in which virtually all goods at $5...it's not doing too well, because the owner obviously had to select only $5-applicable products. And this limits variety.
what abt if the shop dont have cents, all round up figure only. coke rm1, wantan mee rm3, barley rm1, chap fan rm3..
ReplyDelete