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  1. #1
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    I think CJ is not going to like this post if they find it true, but in my opinion someone were going to publish this sooner or later, and a business based on not true value actions never last too much...

    I'm not an economist, so if someone who owns a Phd in economy can review the RVAV Theory would be great!
    ------------
    Ebates and similar programs succesfully made merchants believe that it has the same value to refer a new customer (like affiliates do) than to give a rebate (+ coupons sometimes) to a current customer who was already visiting the merchant's store.

    So, merchants pay ebates a commission, plus they earn less for coupons used, and that's for customers who were already in their own site!

    In real world this does not happens, I believe that merchants are not fully understanding that what automatic rebates are doing does not have the same value than a refered user that did not know their site previously (a NEW customer).

    Automatic Rebates has some impact in some edge buyers only! (buyers that were not completely sure about buying and found an incentive with the rebate)

    A question for Merchants:

    Have you seen those great discount coupons that KFC stores publish?

    Have you seen KFC paying to have those discounts offered? (for example: media)

    BUT have you seen KFC paying someone to have those special discounts offered inside their own stores? Because you are paying to programs like ebates that mainly do That...

    Fer

    [This message was edited by Fer on January 21, 2003 at 12:52 AM.]

  2. #2
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    Fer,
    this coupon thing is only a trap, because the rebates are not given for all products of the concerned merchant. The rebate is only for a few products and if the customer buys another product he will not get any rebate. If the rebates will be given automatically for all products this would be a pyramid game and merchants as well as ebates would be out of the game soon.

    carneol

  3. #3
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    Merchants that support Ebates and the like don't see the forest for the trees.

    Sure, Ebates may bring in 100k/month in revenue, but how much "new" business did they bring in? Probably no more than I did.

    They scam commissions off the merchant's other efforts, such as PPC and e-newsletters. That's gotta hurt more than it helps.

    I'm getting decent traffic, I think I'll play a little hardball

  4. #4
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    quote:
    because the rebates are not given for all products of the concerned merchant. The rebate is only for a few products and if the customer buys another product he will not get any rebate


    Carneol, I think that what you have said is not as descrived, could you please refer me to the source of your statement?

    I have read in some rebate sites I visited that rebates apply to all store products every time.

    Fer

  5. #5
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    AFAIK rebates are paid for any purchase in which the rebate company gets paid a commission. They don't pay back new customer bonuses and the like, afaik.

    Folks, I'm all for fighting these people but lets try to keep the information correct!

    ----
    -J
    Merchants: Do you realize that some of your affiliates are gaining commission on sales which you have paid for via PPC, offline advertisng, and your targeted mailings?

  6. #6
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    This is usually where that analytic guy usually steps in making broad claims based on some questionable stats program he is trying to sell.

  7. #7
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    ahaha LOL..

  8. #8
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    I am not shure, but if this would be correct what Joseph and Fer posted ebates would be bankrupt within a few days. Remember: they get a commission of let me say 25% and they give a rebate of 25% on all purchases, they would have earned nothing, but spent a lot of money. And please take a look on commissions given from your merchants. That will give you an impression how much they can give to ebates without themselve running to bankruptcy.
    I did never step into that coupon thing. What I see here in Germany is a big rising of coupon businesses, but they all do it in the way I explained in my first post: only on some products and not over all.

    carneol

  9. #9
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    Automatic Rebate will work like Coupon business model. Coupons are used to generate new customers or to drive sales regulary (weekly, bimonthly, etc.). Most dept stores do that (Macy's, JC Penney, Sears, etc.). It's because they have a huge margin.

    Rebates on the other hands rely on people that DO NOT mail their rebates (forgot, lost it, lazy )
    Mostly only 5-15% of rebates offer is mailed.

    Coupons and rebates will surely live since people like to have a bargain.

    Just for fund, consider this riddle:
    Product A cost $10
    Product B cost $10
    Product C cost $10

    A customer bought the 3 products (total=$30) and got a $5 off coupon. He calculate
    Product A cost $9
    Product B cost $9
    Product C cost $9
    and he still have $2 more money to spend.

    He then think all the three products cost him $27 (9*3) plus $2 more money = $29.00

    He's wondering where $1 go if he does not have any coupon?



    Regards,

    =xo=

  10. #10
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    The question is flawed.

    At the end you would have to subtract the $2.00 and add back $5.00 to the items to make it match the $30.00

    Thusly...
    Item A: $9.00
    Item B: $9.00
    Item C: $9.00
    Total: $27.00
    Minus $2.00 left over from above
    Total: $25.00
    Plus the original
    coupon $ 5.00
    New total $30.00

    Supras | Celicas

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