Posted November 15, 2010 4:09 pm by with 2 comments

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If you visit Whole Foods in the next few weeks, you could earn yourself a refreshing Tazo tea just for checking-in at the checkout counter. The promotion is being run by Foursquare competitor Gowalla and it includes opportunities to earn a $25 Whole Foods gift certificate or other related “goodies.”

This is another great example of using location-based apps to promote a product so I was surprised to see a writer for Daily Finance taking the program to task.

“Um, wonderful. So I’m going to check in at Whole Foods and enter a contest to win a whopping $25 gift card and maybe some special team items that aren’t even mentioned in this promo. I’m sorry, Gowalla. A contest for a $25 gift card simply isn’t going to cut it in an era of total Groupon frenzy with 75% discounts on hot restaurants”

He does go on to detail how Foursquare is better at this kind of thing, and no argument there, but poo-pooing a mere “$25 gift card?” People have done a lot more for a lot less. I don’t care how great the deals could be, most people love a freebie and they love to gamble. If all it takes is to engage an iPhone app while they’re waiting to check-out at Whole Foods, why wouldn’t they?

Recently we talked about the lengths people will go just to earn a badge or sticker on a social media site. And then there were the thousands of people who stayed up late in hopes of getting 1 of 100 mixers for 90% off at Lowe’s.

I’m sure there’s a psychological study somewhere about the correlation between the value of the prize and what people will do to earn it. Then again, have you watched “Wipe Out” or any Japanese game show?

Check-in programs are simply the high-tech version of the gold star charts we had as kids. You do what you’re told and you get a reward, it’s basic behavioral conditioning. The question is now one of limits. Pavlov’s dogs got hungry at the sound of the bell, but certainly there was a limit to how many times they’d chow down in a short period of time.

If marketers keep offering deeper discounts, higher value freebies and they up the frequency of delivery, will consumers start passing up on the smaller deals in hopes of getting something better? I do it and I didn’t even realize it until I started writing this piece. I was offered a discount on the new Entertainment Book but I passed knowing that in a few weeks they’d send me a better offer. They did. Then it was gamble time, take what you have or trade it for what’s behind the curtain.

Maybe all these deal sites are making us jaded. But not every company can afford to hand out 75% off coupons on a monthly basis, so what’s the solution? I say creativity, because it’s not really about the real value of the deal, it’s about the perceived value of the deal. Make your customers feel special and they’ll be excited by a coupon for a  free bottle of tea that they probably won’t redeem anyway.

What do you think? Is the rise in deals and deal sites making the consumer jaded?

  • Cynthia, you nailed it! Especially with this: “…it’s not really about the real value of the deal, it’s about the perceived value of the deal.”

  • I’m one of those people who love a freebies but I don’t so much love to gamble.