To: Jim B who wrote (2119 ) 7/15/1998 10:20:00 PM From: David A. Irvine Respond to of 44908
Jim, I wanted to add my take on how TSIG will make money even with the lower prices of their CDs. The key is the music card. Enough said. Period. The music card is an awesome marketing scheme (as someone else said earlier - I forget who). To get the lower prices, people will have to by a music card which is good for three selections (it is 3, isn't it? I don't remember at the moment). Anyway, most serious CD buyers will purchase the cards with every intention of buying 2 more CDs at some point in the future. This is where TSIG creates a win-win situation. If the person uses the card, you get a minimum of 3 sales, build customer loyalty, generate familiarity with the web site which will bring them back time and time again (ever notice how non-internet people don't like dealing with websites they are not familiar with?). If the person doesn't use the card, well, they just paid $33 for one CD - not too bad for TSIG. This is similar to the scam the rental cars have where you prepay for your gas so you can return the car empty. (Nobody does that, I hope.) Obviously, most people would leave gas in the car - gas they paid for - and give it back to the rental car company. Ladies and gentleman, fasten your safety belts, this rocket is about to take off! -Dave Jim B. Wrote: <<<< as for the person that was wondering if TSIG makes money by undercutting their competitors prices.. well, you can do that if you 1) have less overhead 2) get the CDs cheaper 3) plan on selling more 4) are willing to take lower profits now.. with the intent that you build up a larger more loyal customer base that will keep coming back.. over time you'll make more money than the competition.. >>>