Stop bribing me

I was pumping gas this morning wondering why I chose this particular gas station.

Some offer points to convince their followers to buy gas there. Some offer free coffee. Some give a discount on certain days of the week. 

Gas is a commodity. There is no difference between the gas at one retailer to the gas at another. 

Why did I buy gas here this morning? This retailer reduces the price of gas if you pay cash or debit. The cost to a retailer when a customer uses a credit card represents 2-3%. So when a customer doesn't use the credit card, most retailers pocket that difference into profit. This retailer passes the savings onto the customers, everyday.

In looking across the busy intersection, another gas retailer with a points program was trying to bribe customers into their station. If I purchase a minimum of 25 litres with the retailer sponsored MasterCard, on Tuesdays from 7-9, I get an extra 2 cents off per litre.

I wonder who's the genius that comes up with these promotions. Consumers don't like conditions. And the more conditions that is placed on a purchase, the less we respond to the offer.

The worst part was the net benefit of the gas across the street was still higher than my pumped gas.

The retailer across the street didn't have any cars gassing up this morning. There were 7 cars at my chosen gas station, and more were constantly pulling in and out.

We see bribes all the time but usually in the form of discounts. Buy this before Friday and get this amount off the ticket price. What's the discount telling consumers? It tells us that the real value is the discounted price.

Discounts work. And they work well. But over time, people become aware that the product is only worth the discounted price and they stop seeing value in a discount. 

Over time discounts become less and less effective, until they almost stop working completely. 

In watching Adam Sandler's movie, "Don't Mess with the Zohan", there is a seen where one of the characters works in a discount electronics store called "Going out of Business". He tells Adam Sandler's character that business is good despite the sign. 

Bribes work, but on one condition.

Read that line again.

Bribes work on one condition. Not on multiple ones.

Discounting a product makes it a commodity. Be very careful on the type of bribes you use. Unless you live in the land of movies, it could kill your business.