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...or they end up with razor-thin profits.
[edited by: martinibuster at 7:51 pm (utc) on Dec 1, 2010]
I don't think ecommerce sites would be using them constantly if they weren't making money off of them.
many people can't calculate their actual costs.
Many online sites may claim to have Zappos.com coupons, but the truth is Zappos.com does not offer coupons or promotion codes.
Then they cheap-out on promoting it.
Typically they aren't trying to make 1 sale per coupon.... they are hoping to make 1 repeat customer per coupon.
if that's what you're thinking will be the benefit the data doesn't support the inference.
I guess like everything else in business it's a case of "test . . test . . test", all the while probably "testing assumptions"
Am I the only one here old enough to remember when trading stamps were huge in marketing in the mid-60s? (Top Value, S&H Green Stamps, Plaid Stamps etc). A forgotten fad now. At their peak they were far hotter than Groupon.
They'd go out and buy a car for sticker price, without even attempting to haggle, thereby instantly erasing about 5 years worth of coupon efforts.
Recommended reading: Predictably irrational by Dan Ariely. He has interesting things to say about behavior like that!