Lord Gonchar said:
If a company donates $1 million to breast cancer research, that is a $1 million expense. How can it be argued that donations don't come off the company's bottom line?
That's not even where I'm going with it, although that is true too.
Let's take the real-world example of T-Mobile's Huddle-Up program. I don't have the figures of how much they spent, but let's take a stab at the $1million figure you threw out there.
Now, in my area they went it and did a huge makeover of the local Boys & Girls club to make it appealing as an afterschool hangout instead of the kids doing drugs. The B&GC made a *HUGE* deal of it in the local paper (not to mention the people who actually go there that see T-Mobile logos plastered everywhere since it's now a T-Mobile HotSpot too). When those parents are shopping for a cell phone, are they going to choose Verizon? Heck no! $35 activation plus 2-year contract of a cheap-o $30/month plan is still an extra $395 for that fiscal year, and an extra $360 the next. What about the parents who want to do something to give BACK to T-Mobile for donating all the time, effort, and money? They may either 1) Switch from another carrier so their dollar is indirectly supporting charity that they directly benefit from. 2) Increase a plan or service they may have been considering. 3) Get a prepaid cellphone "for emergencies" even though they weren't planning on it. That's extra revenue, which raises the profit level.
By your logic, companies should never purchase advertising because it "hurts profits". Never mind that it boosts revenue by MORE than what is spent (otherwise no one would advertise).
Speaking of advertising, the HuddleUp events are "free" advertising as well. It gets the T-Mobile name out there, and with a charitable spin as well. So instead of spending $50,000 on an extra commercial spot, spend it on paint, computers, and labor for the local kids charity and reap more advertising.
Oh, and for the record, I'm not saying that T-Mobile is cold and heartless and only in it for the money. Robert Dotson, T-Mobile USA's CEO, started the initiative because when he was groing up he benefited from similar charity, and wants to give back so others can have the same positive experiences that he had. What I'm saying is that for every $100 spent, T-Mobile is not having that profit line decreased by $100. It's hard to track that kind of sales drivers, but I'd be willing to bet that it's indirectly profitable, and if not only "costing" T-Mobile around $5 out of every $100 spent. (Indirect being the key word for those who insist on taking everything narrowly and literally)
Edit: forgot a word which makes my verb tense not make sense. Oops. :) *** Edited 3/31/2007 5:10:36 AM UTC by dannerman***
I was reading an article in Rolling Stone about fan clubs for bands, the costs and the perks.
It's parallels the Q-bot/Flash Pass thing. We often try to debate different situations where paying more gets you more. The retort is that it's not at the expense of the experience of others. (or at least not so obvious that it is)
So this article is talking about how if you join many band fan clubs (for a fee mind you - with prices mentioned as being anything from $20 to $100) you get perks. One of those perks is early access to ticket sales.
So here we have a real-world case of a form of entertainment giving special privledge to those willing to spend more at the expene of others. Pay $100 to be a 'fan' and we'll let you snag the good tickets before the people who don't pay up.
Perhaps Q-bot users can merely think of themselves as part of the official SF fan club? ;)
Seriously though, it's the best example of the same idea playing out in the real world (read: not inside park gates) that I've come across yet. Just needed to share. :)
IM IN WCFC and other clubs but I don't have to haven them to enjoy parks. Just events ect.
Want to go to a restaurant? There are 2 lines, a line for diamond (top of 3 levels) cardholders and a line for everyone else. Normally if a diamond person gets in their line, they get seated right away while the standby line doesn't move. The restaurant I went to at Bally's even had a seperate room for Diamond members (though there was no wait).
After spending money in the casino, they now give you paper vouchers you can cash out with. Again there are 2 lines, one for diamond, 1 for everyone else. They have 4 tellers, 3 for diamond, 1 for everyone else. It is fusturating to stand in line not moving while the Diamond people walk right up to a teller.
I stopped using the tellers and go to the automatic machines located on the casino floor as there is no preferred treatment at those.
Even worse, there are certain casino rooms and clubs that are dimaond only.
I understand it's a business and you don't want your best customers waiting but it was fusturating and annoying. I could tell I wasn't the only one that felt that way.
It sort of the same in parks, I went on a weekday in April and didn't deal wtih any of the lines and issues but on a weekend or during the summer, it is definetly an issue.
"Perhaps Q-bot users can merely think of themselves as part of the official SF fan club?"
Seriously, how bizarre to think about people walking past the long lines with Q-bots in hand wearing the official fan club "I heart SF" t-shirts... ;)
VIP members get the polos...
...never could resist stirring a simmering kettle... LOL! :)
*** Edited 4/10/2007 11:58:34 PM UTC by rollergator***
And to continue kicking the dead horse, HERE is a link to a press release about USH's new enhcned VIP experience. (you need to register)
Some key points:
A highlight of the "VIP Experience" features escorted, hassle-free front-of-the-line privileges at many of Universal Studios most popular attractions, and complimentary breakfast and lunch with the inclusion of the theme park's "All You Can You Eat" program to help round out a complete VIP day.
And the most intriguing part to me:
"Created by the Studio as a perk for its stars and business associates, the "VIP Experience" has been a favorite of celebrities ranging from European sovereigns to Hollywood royalty. Only in recent years, in response to growing demand for a "luxury" studio experience, has the program been offered to the public and never before with these new enhancements."
The part that jumps out to me is, "in response to growing demand" - there is a market for this sort of thing and more and more parks seem to be adding some type of VIP deal. And if we're to believe this press release, it's because the guests want it, not because it's a long shot at scoring some additional incremental revenue.
But like I said, I think the interesting thing is that people seem to want it. All of these parks wouldn't be rolling these out to the masses if people weren't biting. In the case of USH, they make sound like enough people inquired that they added it as an option for everyone.
It's a shift (however slight) in the status quo. There are finally enough people willing and able to pay for experiences like this that it makes sense for parks across the board to offer them to guests on the most basic level rather than reserve such experiences for 'special' guests.
If you're an American Express holder, you get preferential treatment for ticket purchasing, priority reservations at restaurants, upgrades at hotels, special airport lounges, and a ton of other perks that are really great. Also, the nicer card you have, the better perks you get. But, the general public doesn't really see that they're not getting these perks. So, no harm no foul.
In certain situations, this makes perfect sense. In other situations, it turns into a nightmare. It's up to each business to decide what's right for them though. I still feel Cedar Point has the best idea. They aren't garishly advertising their VIP program like Six Flags is. It's on their website, but not on flash animations right on the home page. If people desire it, they'll find it as an offering. For everyone else, there's one level of service - great. As far as I'm concerned, that's a perfect business model. Please everyone and give a select few an extra special experience. In the end, everyone is a winner. *** Edited 4/11/2007 7:50:41 PM UTC by halltd***
After going to Dollywood for the opening of Mystery Mine, I went into Gatlinburg with a couple of friends, and happened to stop by the Hard Rock Cafe. The were selling a LIFETIME VIP. One of the benefits was instant seating at any Hard Rock. That's right - you pay extra now, and any time in the future you go into a Hard Rock cafe and show the card to get seated in front of those that may have been waiting an hour (or longer).
No slipping a jackson under the table to the server - this is the company taking the money to willingly and publicly make YOU wait longer while someone ELSE who paid them more money gets seated first. Sounds almost exactly like Q-Bot to me, except this is only a one-time charge for a lifetime benefit. Imagine if Q-Bot were lifetime? :)
Build an *outrageously forceful* GCII, and with that lifetime Q-bot for HRP, we'll talk about price... ;)
You must be logged in to post