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DL Hirst

My company sells consumer goods that certain hobby segments use. Often, the consumers are members of local/regional "clubs", and they ask for "club discounts". A few years back we instituted your "generous incentive" to people. Essentially, the consumer saves nothing on the purchase, but we credit 10% of the purchase to their club's account. When they like, the clubs can make purchases from our online shop. Goods are priced at full retail, but they aren't really paying anything, because they are just using up the credits they have accrued. Clubs will buy goods for their workshops/classrooms, or raffle prizes for fundraisers or to be given away as door prizes.

This policy solved a few problems. First, no one likes to say "no" to the consumer when s/he asks. And almost everyone asks for a discount. Second, we don't have to "police" the consumer - are you REALLY a club member (deserving of a discount)? By removing the selfish incentive, nobody is interested in lying to us or gaming the system. Third, the clubs are grateful, and as a club, will often use the "selfish incentive" by encouraging their members to buy from us...

We worried a little at first that consumers would be unhappy with not saving the money themselves. And, I have asked everyone here to let me know when any complain. To date, not one. Some are pleased that they can help their clubs (we let the clubs know WHO made the purchase), others kinda say "alright, as long as SOMEONE is getting a deal..." So far, it seems to work out well. Win, win, win.

Glad to hear that there is actual research suggesting what we have learned.

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