I used to know someone who worked for one of the companies behind those "We'll Fix Your Credit Score, Call Us" and "We'll Buy Your House, Call Us" signs on the side of street intersections (among other things), and I asked her to explain to me how those signs could possibly make any money.
The way she explained it was (mostly her words), way less than 1% of people are dumb enough to dial the number, but of the people who do call, 100% of them are people who are dumb enough to call.
In other words, if the signs appeared more credible, they would be much less effective, because they'd end up wasting a lot of time screening the calls of people who are unlikely to accept the terms they offer.
She also said that scaling up (and going up market) would increase their likelihood of litigation.
It seems to me like that's what's happening with these timeshare seminars. The car isn't just there to mislead people about the potential upside of the contest, the car is really there to screen the marketing process for gullible people attracted to large financed purchases.
I sometimes wonder if this isn't a fairly common practice in numerous industries. For instance some time back I was watching a show on US cable television. Vikings on the History Channel, in particular. Aside from the completely obnoxious icons and labeling everywhere, about 5 minutes into the show advertisement pops up literally in the middle of the screen consuming about 25% of the screen space. And that was enough for me to immediately move onto other things, as that's worth less than the $0 price of admission. Incidentally the web version is amazing, has more content, is better quality, has no ads, and something I would generally highly recommend - underrated series.
While cable TV, and cable news in particular, has been rightfully demonized, it makes me wonder if they're really just happy to target themselves down to a demographic that is willing to tolerate this nonsense. And perhaps this demographic might also respond more favorably to advertising, influencing, and other corporate ends.
The same thing has also happened in the movie industry as well. If you think the vast majority of modern movies suck, it would not necessarily just be because of nostalgia or other effects. The modern movie viewer demographic has changed radically and thus movies are being made for these people. Even more interesting is that movie ticket sales are down hard, but they're somehow convincing the new demographic to pay even more which actually means that gross receipts have been stable and even increasing at times.
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Of course there's also a chicken and egg question. In the movie industry for instance, did movies change because the demographic changed, or did the demographic change because movies changed?
I wonder how much we undervalue audience segmentation when analyzing social network profitability. Twitter and reddit’s perpetual issues making money could be that they index too highly for cynical people who trust no one, while Facebook does gangbusters indexing highly for people desperate to make a connection.
It's the same logic that drives absurd spam mails. They want the kind of people that consider a nigerian prince that needs your help to share his wealth with you as a legitimate opportunity.
This is similar to the reason that household brands have such terrible packaging design. It's a form of price differentiation - if you can afford the more expensive version you'll avoid the ugly one just because it doesn't look nice.
I've always been amused by Sainsbury's tactics - as well as the bland and unattractive packaging for their value brands, they also add a little passive-aggressive slogan that slightly throws some shade on their own product (and perhaps by association, you). For example, value wipes have "Not quite as thick, but cleans up quick". Value peas have something like "A little smaller, but just as tasty!"
Emphasising "less" and "small". I guess the slogan they really want is "You are too poor to afford the good stuff".
(Of course the joke is all the products are indistinguishable out of the packet as no doubt they come from the same production lines and they aren't likely to tool up to make deliberately inferior versions if that would cost extra).
>Of course the joke is all the products are indistinguishable out of the packet as no doubt they come from the same production lines and they aren't likely to tool up to make deliberately inferior versions if that would cost extra
That's absolutely not the case. It's definitely economical to make slightly inferior versions for the value brand. If you read the ingredients, you can see where they've cut costs. For example, the ordinary own-brand chocolate digestives are 27% chocolate, while the Basics brand digestives are 24% chocolate.
Basics pasta is made from an inferior grade of wheat, Basics peanut butter is bulked out with 8% vegetable oil, Basics tin foil is very slightly thinner. It seems like a trivial difference, but it equates to millions of pounds a year across the entire product range. The major supermarkets and their manufacturing partners are incredibly good at finding marginal cost savings.
Supermarkets really want you to buy their own-brand products, because the margins are far better than on branded goods. I believe that the slogans used by Sainsburys are playing on quite a subtle psychological effect - by signposting how they saved money, they reduce the sense that the product is suspiciously cheap.
Low-cost airlines like Ryanair have deliberately cultivated an image of conspicuous thrift. We intuitively interpret the second-tier airports with crappy facilities, the tatty seat upholstery and the ugly websites as signals of trustworthiness, because we can see where the corners have been cut to save money. In some sense, we want to get shafted on baggage fees or sold a scratchcard by a surly flight attendant, because it allays our fears that they have scrimped on engine maintenance or hired a load of ex-Aeroflot pilots.
The way she explained it was (mostly her words), way less than 1% of people are dumb enough to dial the number, but of the people who do call, 100% of them are people who are dumb enough to call.
In other words, if the signs appeared more credible, they would be much less effective, because they'd end up wasting a lot of time screening the calls of people who are unlikely to accept the terms they offer.
She also said that scaling up (and going up market) would increase their likelihood of litigation.
It seems to me like that's what's happening with these timeshare seminars. The car isn't just there to mislead people about the potential upside of the contest, the car is really there to screen the marketing process for gullible people attracted to large financed purchases.