The economy of tokens: discounts - the main problems

Let's start with the main thing: why do those who live on an it resource know this? There are at least two reasons: the first - the lion’s share of modern projects one way or another builds its own loyalty program or connects one of the existing ones, but in any case we are talking primarily about discounts (sometimes bonuses); the second, the ICO, is a bubble, which means that after it collapses, the process of raising funds will normalize and everything will only increase, that is, you need to be prepared for the demand for the service.

The second thing worth talking about is popularity : discounts are now trying to be “crammed” into all product, app, and other token subspecies. Only when it is justified, and when not - remains a big question. And most importantly - open.

Thirdly, many are discounted : correct ones. I don’t even know if it is worth giving examples: let's say, couponers in the Russian Federation did this obviously wrong. Many e-commerce projects, etc., therefore, to say that a sphere is complex means not only to make a dumb person speak an inspiring speech loudly and clearly, but also to cut off all the exits to the other sensors.
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Perhaps we will begin.

There are several groups of discounts and types in them.

Group number 1 . Discounts on goods and services: it would seem, what's the difference? In fact, it is also essential: the goods, if we are not talking about digital only, are always present as physical entities: cans, boxes, packages, etc., that is, expressed in a quantitative unit. The service is primarily measured on a time scale. Of course, there are goods for which time is also critical, but in any case it will be derived from the useful properties of the product itself. In some cases, milk is useful until it is sour, but precisely because it is milk, i.e. product with a certain set of qualities.

That is why the unification into one group of product and service (for services) tokens - in my opinion is fundamentally wrong.

Often large loyalty systems suffer from such an association, where different suppliers and manufacturers are unified under one flag: let's say that I give a permanent discount - 10% - for legal services under the loyalty program number x. And the manufacturer, for example, tractors, also gives a discount, but at 5%: for the same loyalty program and constantly. Is it necessary to explain how much we will be unequal in the case when the price of my services and their goods increases proportionally, for example, the dollar rate? For example, a tractor cost 1,000,000. Then, for a number of reasons, it cost 2,000,000. But the discount was 5%, so it remained. in the money, the consumer initially received 50,000, and then - already 100,000. Suppose the company has 100 such consumers, i.e. the difference will be 50,000 * 100 = 5,000,000. How much will it be justified if the purchasing power drops, as was the case in, say, the Russian Federation from 2014 to 2016?

I see how the avalanche of criticism of economists is approaching, starting with the question: "Is this obvious?"

Yes, but analyze any number of ICO projects built on discounts, and you will see that obviously does not mean realized: moreover, it does not mean that it will even be realized.

The second important aspect is the calculation of the discount . Very often I see (and you probably have seen such a situation): do it and get a discount, click here - and get more. In most cases (according to my assessment of current ICOs: from 2016 to 2017 - 72%), the justification for such actions is minimal or completely absent, but the main thing is that it does not fit into the project’s economy, i.e. not the cost of action is not tied to the total cost of the lead.

Again, one can argue and discuss for a long time, but the fact is that the economy of the discount token requires careful study in three aspects:

1. Lead cost relative to discount price
2. The time frame of the existence of opportunities for cumulative discounts
3. Scenarios of the movement of the cost of discounts depending on the rate of profit and loss

However, to limit oneself to these aspects is not always reasonable, but as an educational program, in essence, the approach is completely.

Third: discount and bonus are different things. Absolutely.

I understand that division can be replaced by multiplication, and subtraction - by addition, but it’s not for nothing that they are introduced into the apparatus as separate tools. Not for nothing.

Firstly, the bonus goes beyond the price and therefore it can get into different margin grids: for example, they gave a bonus for buying a TV (margin - 5%), and spent it on buying a phone case (margin - 200%). Discount in this sense is more loyal to the "seller". Secondly, discounts and bonuses can be cumulative. And it is all confused. In some cases, the cumulative discount is better: usually when the purchases are so periodical, and it is important to increase the average check and overall loyalty (of living examples are cosmetics selling stores). The bonus also allows you to buy from a certain point, not a part of a thing or a service, but the whole service or thing. At the same time, there are bonus systems such that spending a certain amount reduces the accumulation factor (for example, if 1000 bonuses accumulate 1 point for every 100 rubles, and if 10,000, then 2 points for every 100 rubles). This approach helps the "seller" (in quotes, because it can be any service that implements tokens), because it puts a psychological barrier to selling the accumulated. But at the same time there is a risk of losing too expensive a thing with large savings.

Finally, another problem arises directly from the concept: “discount is the difference between the prices at which the material value or goods are sold at the moment, and the price of its face value at the time of sale or at maturity”.

First of all, this is the problem of projects with repurchase, which we will talk about separately (ZrCoin, say): we bought tokens with a discount of 25%. Repayment, for example, in a year. Bought them at 75, but the cost is 100. And the cancellation is at the market price. And the speculators made a pamp. And we sell them already for 200. So what is the discount the investor gets?

I do not have the task of criticizing anyone specifically or giving instructions to the market: he himself will cope. But I want to normalize relations. Perhaps, many of them are all the same, that is ICO, that this is the boiling point of the blockchain, that the blockchain is not just a knowledge base or technology, but a new paradigm of thinking. Perhaps: not me.

Therefore, I would like to advise the following to all novice entrepreneurs whose projects are “sharpened” for loyalty programs, bonuses or discounts:

1. Never consider a discount from competitors or, all the more, “similar” projects or from an average market: business is individual and history has proved it - a bicycle cannot be invented;
2. Please remember that the discount rate and the discount are two big differences;
3. The main thing: do not enter this business with a universal rate “for everything about everything and everyone about everyone”, since the gap in product categories (categories of services), different time scales of use cycles and other indicators simply level all efforts.

Let me remind you that I am a blockchain enthusiast and that is why I am ready to spend my time and energy on developing the industry step by step. Therefore - thank you for reading and questions - below.