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Jonathan Sinton

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http://backpackertradenews.com 18
http://thumbrella.com.au 8
http://backpackertradenews.com.au 5

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Jonathan Sinton Jonathan Sinton Presentation Transcript

  •  
  • Motion against
    • Discounting in a price sensitive industry is not sensible:
      • It isn’t working
      • It’s based on false assumptions about consumer behaviour
      • There are better options for long term business success
    3 2 1
  •  
  • It isn’t working Numbers Nights Expenditure m$ Jun-09 vs. Jun-10 7% decrease Jun-09 vs. Jun-10 10% decrease Jun-09 vs. Jun-10 17.5% decrease Source: International Visitor Survey (IVS) by YHA Ltd. (http://thumbrella.com.au/yha-study-reveals-true- picture-behind-latest-ivs-backpacker-numbers-9536) Year-on-Year Backpacker Statistics
    • If discounting isn’t working and it’s co $ ting you money , how can it be a sensible option?
    • Consumer behaviour isn’t rational
    it is that drives customer decision-making … not reason
    • The prices others are charging for similar goods and services dictates what you expect to pay for this good and service.
    • And the price you paid in the past
    • also influences your decision.
  • Arbitrary coherence Social security numbers Average price paid for each product Product 0-19 20-39 40-59 60-79 80-99 Bottle of wine $11.73 $22.45 $18.09 $24.55 $37.55 Chordless mouse $9.64 $11.82 $13.45 $21.18 $26.18 Design book $12.82 $16.18 $15.82 $19.27 $30.00 Box of chocolates $9.55 $10.64 $12.45 $13.27 $20.64
    • only discount today if you are prepared to do so for a long time and if you want your business decisions to be bound by the most broke, most desperate and most awful backpackers in Australia
    • Tom Dorresteijn, Visual Branding
    The consumer will treat your brand like you treat the consumer. If your brand has no personality and no warmth, the consumer will treat it likewise: zero loyalty, high price senstivity
    • It doesn’t have to be this way.
    • The very quirks of the human brain that make discounting a bad idea offer us options that are sensible – and can make this industry less price sensitive.
    • the POWER
    • OF FREE !
  • The power of free
    • Q: If you were offered the choice between the following gift certificates from Amazon which would you choose?
      • A: A free $10 certificate [FREE1]
      • B: A $20 gift certificate for the cost of $7 (delivering a $13 profit) [FREE2]
      • TO VOTE: Please vote for A or B, by texting the option code to 0429 883 481. E.g. to vote for option A enter the code ‘FREE1’ in the message text.
  • The power of free
    • Discounting is NOT a sensible idea in a price driven industry