jasamcarl said:
Unfortunatly, it still appears you have taken it personaly.
It's not so much a matter of taking it personally. I just find you irritating.
I also think your assumptions are terrible, that your logic is ridiculous, and that you're trying to apply something you've only half-learned to real-world situations you know nothing about.
But it really isn't personal.
And I also found it odd that you dismissed the idea of pricing to the small super-spending crowd on the grounds of that there is essentially no ceiling to the increased value you can provide.
Sure, there's a ceiling. But it's higher than the one imposed by the customer's wallet. There's only so much money in there that's not allocated to food, rent, or even other entertainment.
More importantly, imposing a membership fee does nothing to get you more profit should you get more sales from that customer. You can only raise profit by raising the fee, and it's easier to sell product than an arbitrary fee change. This is one of the reasons I find your logic ridiculous, because you somehow believe it's easier to sell "Hey Joe, last year you paid $1000 to shop there. This year I'd like you to pay $1200 so I can make more profit" than it is to sell, "Hey Joe, have you tried this Heroclix thing? It's really cool! Let me give you a starter so you and Bob can try it out."
(jumping down to the next post for a moment)
And just to clarify, the overwhelming majority of your sales comes from the hardcore spenders? That is the only conceivable way your 'quality' emphasis would work?
Sorry, wrong.
The super-customers are actually a small percentage of sales. They are extremely
profitable customers, because they require relatively little labor and yield large gross profits for that labor. They are a significant part of our gross profit, and many of them also lead other people to purchasing from us, so we take good care of them.
One of the reasons your membership fee idea stinks is that any fee low enough to appeal to most of the regular customers erases the profit gained from the supercustomers. Since our real-world experience with membership fees is that only customers who do better than break even use them, it's stupid to give up a lot of money from supercustomers when there's going to be no profit gain at the regular customer level.
By contrast, pursuing quality improves sales and profits on
every customer level -- regular, super, <b>and</b> occasional. When I'm on my game -- which isn't nearly often enough -- I can send a customer who came in for Settlers of Catan ($40) home with $80 in additional purchases. Even if I never see that customer again, not uncommon of they're a tourist or other sort of out-of-towner, I've tripled my potential gain from that sale, and I've done it without giving up a cent in discounts. Smaller scale works too -- if Johnny comes in with 5 bucks looking for a pack of Magic, then I can put a big boost in my sale by selling him a bottle of soda to drink while he looks at his cards in one of our comfy chairs.
The way to improve sales like this is with selection, presentation, and salesmanship. <b>That's</b> how you get growth at this size of business -- by offering more and better stuff and a good shopping experience at a price you can profit from, not by offering the same stuff for less.
BTW, if you look at my previous post again, you'll see half of our money comes from Johnny One-Pack and other occasional and incidental purchases. In many ways, that's where the <b>real</b> money is -- in getting more money from those transactions one transaction at a time. One of the reasons your assumptions irritate me is because you're completely ignoring that segment of the market in your pursuit of the "regular customer" dollar.
Lets just say that you took it personally and are making disparaging remarks about assertions I haven't really made, namely that this MUST work for game stores.
What I've been trying to tell you is that this CAN'T work for game stores. The membership fee structure you've proposed is a Bad Idea in much the same way that "Hosting In-Store Nude Gamer Aerobics in the Middle of Christmas Season" is a Bad Idea.
I would love to hear other and hopefully better ideas from you, because you are making me think and that's good for my business. But no amount of stubbornness on your part is going to make this idea any better.
Quick thoughts about other posts, since god knows I'm trying everybody's patience enough with my mouthing off:
Teleri_mm: Much of what you say seems true to me. However, I want to restate something I said earlier: good stores use popular books like the D&D core rules to subsidize slower-turning books from smaller presses. If that kind of store loses too many core book sales to discounters, it's likely to cut back on other lines. If you're going to consider effects, you need to throw that one into the hopper.
I've also got to disagree with the idea that anyone can "stop this stuff". It's just not going to happen -- there will always be someone out there selling at near wholesale prices, no matter how much some store owners would like to believe otherwise. If you're a store owner, you either join them (usually suicide) or find another strategy that works for you. It's not easy, but that's why they call it "work."
Enkhidu: Stamp cards are another good way to do a small-scale frequent buyer's program, and as you've described it arguably does a better job of boosting sales. If I were starting over from scratch I'd probably do a rewards system that way, and I may yet bite the paperwork bullet and switch over to it. (There are some interesting customer recruitment angles to exploit by giving folks extra cards to give to their friends...)
cheers,
