There is something appealing to people about getting something for nothing, or even just less than they could ordinarily get it for – the free trip that turns out to be a hard sell presentation about a new time-share in the mountains, for example. At the root of any such deal is a desire to make money. The free or reduced-price rewards for participation are a drop in the bucket for the organizers. They lure enough people in to make it worth their while.
Recently there was a deal that drew a lot of people in. In fact, it was a fairly sophisticated deal because it promised multiple kinds of rewards. It was so sophisticated that it needed two groups of people involved: the suppliers of the rewards who themselves would need to be offered rewards and the general public (or buyers). The suppliers were offered a flat rate to provide a product that would only “last” so long. Their reward was the promise that the general public would find such benefit from their product that they would be happy to pay for it in full in the future. Interestingly, some, but not all, of the suppliers were also organizers of the deal. The buyers were offered two rewards. For a drastically discounted rate they would not only receive the products from the suppliers (the “crippled” versions of the products anyway) but also (if they act now) the good feelings about contributing to a charity.
Will the suppliers reap their promised reward of future revenue? No doubt some of the buyers will indeed buy new versions of the suppliers’ products. But given the breadth of products offered in the deal any given buyer will only use some of the products. Only some of those buyers will be happy with the capabilities of the product they bought. It is also reasonable to assume that some of the buyers will be unhappy that the product they bought (even at a deep discount) only “lasted” so long. At best each supplier can hope for only a percentage of the buyers contributing future revenue. And it remains to be seen how many of the buyers will pay full price instead of waiting for future discount offers.
The buyers’ rewards were more immediate: they have the products and the warm glow of supporting charity already. But again, given the breadth of products in the deal, they are only likely to find utility in some of them. In the near future, when the suppliers provide new capabilities in those products (as they must do in order to claim their promised reward) the buyers will find themselves needing to pay again. It is likely that in the long run the buyer could have saved money by purchasing the products they will use directly from the supplier and receiving the new capabilities for a nominal upgrade fee or even for free.
The charities will be surprised and happy to receive relatively large sums of money, but they will not benefit as greatly as they could. Even if the organizers include the names of all the buyers with the donations it will not provide the charity with information that would enable them to seek future donations from the buyers. Charitable organizations rely on regular contributors that year after year (and often more frequently) support their cause with donations. How many of the buyers will of their own volition become contributors without the reward of the deeply discounted products? Will the feeling of contributing to a worthy cause be enough for the buyers to become regular supporters?
And what of the organizers? Well, I think we can safely assume they are laughing all the way to the bank. They achieved their goal of making money. They haven’t established long term relationships between buyers and suppliers or between supporters and charities. All that has occurred is a perceived short term gain for everyone, except of course the organizers who now have a war chest to play with. They are successful marketers and we can expect to see more of them but it is my sincere hope that both the buyers and the suppliers will demand more value from their future actions.
