This document contains notes from a presentation on developing an effective discount strategy. It discusses common thinking errors to avoid, such as availability bias and gambler's fallacy. The presentation recommends structuring decisions based on data rather than intuition by identifying options, goals, and weighing choices based on factors like redemption rates, spending per visit, and brand loyalty. It also cautions against gratuitous discounting that does not increase these metrics.

1. Retail Merchants Association Retail ExpoAugust 4, 2009 How to Structure Your Intuition To Develop An Effective Discount Strategy

2. 8/2/2009 IgnazSemmelweis

3. Intuitive Vs. Empirical 8/2/2009

4. Typical Thinking Errors Availability Recency Extreme Predictions Gambler’s Fallacy 8/2/2009

5. Name 3 Dead Presidents! 8/2/2009

6. Think, Shop, Buy Local

7. Recent Events

8. Extreme Prediction 8/2/2009

9. Gambler’s Fallacy Place Text here

10. Paul Meehl

11. Blink! The Power of Thinking Without Thinking

12. For The Connoisseur

13. Our Ice Cream Dreams High Redemption Rate Brand Loyalty Increase $ Spent/Visit Profit Per Redemption Gratuitous Discounting

14. “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. 8/2/2009

15. Stop Giving Away Money!

16. Mechanical Vs. Intuitive

17. Counting Is Empirical

18. Higher Level Mathematics

19. The Decision Original with one mix-in Signature in a dipped waffle bowl

20. 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

21. Retail Merchants Association Retail ExpoAugust 4, 2009 Bob Fischer Phone: 804.780.3308 Blog: www.thenakedportpoliomanager.com Email: bob@thenakedportfoliomanager.com Give Holly your card and get a Cold Stone Coupon (Courtesy of Reach Magazine)