Question

Topic: Strategy

Website Discount Club

Posted by Anonymous on 11/5/2014 at 2:32 PM ET 500 Points
Any thoughts or examples of customer Discount Club?

Example 15% Off every product everyday
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RESPONSES

  • Posted by Peter (henna gaijin) on 11/5/2014 at 2:39 PM Member
    Are you asking for ideas on tagline, names, pricing strategy, or what? Not sure what your question is. Also, please provide more details, like geography, target customer, products, etc.
  • Posted on 11/5/2014 at 2:57 PM Author
    Thank you Peter. I'm asking for pricing a strategy.
    I have sold branded footwear online (Bootbay.com) since 2001
    I'm considering a strategy of "join our club and get % Off every purchase everyday"
    Other than margin reduction I'm wondering if this might be a good, long term, loyalty type of strategy.

    Bootjack
  • Posted by Gary Bloomer on 11/5/2014 at 4:26 PM Member
    Which sites are you competing against? Is your aim is to attract people solely on low prices?
  • Posted on 11/5/2014 at 4:38 PM Author
    Countryoutfitter.com
    Zappos.com

    Due to our small size, commoditization and MAP pricing... I feel price may be our only differentiator.
    Creating a discount club will get around MAP and hopefully create loyalty.

    Bootjack
  • Posted by Jay Hamilton-Roth on 11/5/2014 at 5:19 PM Accepted
    Price is a differentiator. But how about better service (friendly/helpful customer support available 24/7)? Or, partner with clothing manufacturers (to get a matched outfit). Or hard-to-find sizes. Or inexpensive international shipping (with matching localized websites for different regions). Or, shoe-of-the-month-club (customer specifies size/style and they get a different pair each month, and a guaranteed low price)? Pricing as a differentiator is likely to hurt your business long-term, since your competition has deeper pockets than you.
  • Posted by Gary Bloomer on 11/5/2014 at 7:40 PM Accepted
    Unless you have something else to attract people competing on price alone may a mistake. If bigger players compete against you and have the fiscal chops to undercut you and not take the hit, you could be put out of business.

    The flight to cheap undercuts everyone's profit margin and the smaller you are as a player, the thinner your margins are likely to be and the less capital you're likely to have to fall back on.
  • Posted by cookmarketing@gmail. on 11/5/2014 at 9:40 PM Member
    Look at COSTCO model; they use membership fees as true income, merchandise as service
  • Posted on 11/6/2014 at 7:43 AM Author
    Thank you .... Everyone.

    Great responses ...very helpfull.

    Best, Jack
  • Posted by mgoodman on 11/6/2014 at 11:24 AM Moderator
    Consumers have repeatedly shown that they prefer to pay a premium price when they perceive that they're getting greater value. I'd hold (or even increase) margins/prices and challenge myself to deliver greater [perceived] value.
  • Posted by telemoxie on 11/7/2014 at 8:29 AM Member
    I have personally sold products which required building trust before making sales. If it were me, I'd might try to begin by establishing credibility with future buyers. For example, you could help your future customers understand how to evaluate price and quality and brand, possibly with a blog about shoes. as you write in research about the market, you will be better positioned for a future website (possibly in parallel to your blog). This assumes for the moment that your needs for cash are not immediate and pressing of course.

    Do you have enough cash to get started? If you don't have enough cash for six months of unfunded operations, I think you should consider getting a day job and starting this venture on a limited part-time basis.
  • Posted on 11/7/2014 at 11:33 AM Author
    Thank you all...I will follow your recommendations.

    Best,
    Jack
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