Motion against

Discounting in a price sensitive industry is not sensible:

It isn’t working

It’s based on false assumptions about consumer behaviour

There are better options for long term business success3

2

1

It isn’t working

Numbers Nights Expenditure m$

Jun-09 vs. Jun-107% decrease

Jun-09 vs. Jun-1010% decrease

Jun-09 vs. Jun-1017.5% decrease

Source: International Visitor Survey (IVS) by YHA Ltd. (http://thumbrella.com.au/yha-study-reveals-true- picture-behind-latest-ivs-backpacker-numbers-9536)

Year-on-Year Backpacker Statistics

If discounting isn’t working and it’s co$ting you money, how

can it be a sensible option?

Consumer behaviour isn’t rational

it is that drivescustomer decision-making

… not reason

The prices others are charging for similar goods and services dictates what you expect to pay for this good and service.

And the price you paid in the past also influences your decision.

Arbitrary coherence

Product 0-19 20-39 40-59 60-79 80-99 Bottle of wine $11.73 $22.45 $18.09 $24.55 $37.55

Chordless mouse $9.64 $11.82 $13.45 $21.18 $26.18

Design book $12.82 $16.18 $15.82 $19.27 $30.00

Box of chocolates $9.55 $10.64 $12.45 $13.27 $20.64

Social security numbers

Average price paid for each product

only discount today if you are prepared to do so for a long time and if you want your business decisions to be bound by

the most broke, most desperate and most awful backpackers in Australia

Tom Dorresteijn, Visual Branding

The consumer will treat your brand like you treat the consumer. If your brand has no personality and no warmth, the consumer will treat it likewise: zero loyalty, high price senstivity

It doesn’t have to be this way. The very quirks of the human brain that make discounting a bad idea

offer us options that are sensible – and can make this industry less

price sensitive.

the POWER

OF FREE!

The power of free

Q: If you were offered the choice between the following gift certificates from Amazon which would you choose?

A: A free $10 certificate [FREE1]

B: A $20 gift certificate for the cost of $7 (delivering a $13 profit) [FREE2]

TO VOTE: Please vote for A or B, by texting the option code to 0429 883 481. E.g. to vote for option A enter the code ‘FREE1’ in the message text.

The power of free

Discounting is NOT a sensible idea in a price driven

industry