Here’s a nice new business. Say you own a bank of copiers. Your customers used to come in, make whatever number of copies they needed, take the printed report that was generated after their copying job was completed to the cash register and pay for that number of copies.
Now say that instead you require that they pay directly at the copier by swiping their credit card into a slot on the machine. Hey, it cuts out the time the customer needs to spend waiting in line at the register, so they’ll love it, right? But what about the customers who want a single copy and think an 8? charge on their credit card is idiotic? No problem! You’ll sell them a “copy card” for $1, and they can swipe that at the machine too. Even better, if they only make 5 copies, then they’ll still have a 60? balance on their card, so they’ll be happy, right?
But what if some number of your customers are told of this plan and say “I make one copy here every six months. I’m not going to remember I have a ‘copy card’ in my wallet, so I’ll buy another one. Then you guys will have gotten $2 from me for 2 copies six months apart. Doesn’t seem like a very good deal to me.” And those customers walk out angrily, go next door to Safeway, insert a dime into Safeway’s copy machine, make a single copy, and explain to anyone they come into contact with in Safeway that they don’t ordinarily make copies here, but the office supply place next door has adopted a business strategy which looks a lot like a scam.
Is that new strategy worth it?