The Chumps Are Smartening Up
By Denny Hatch
"You can't cheat an honest man. Never give a sucker an even break or smarten up a chump." —W.C. Fields
In many American upmarket suburbs there's an unwritten agreement among realtors that homes for sale or rent will not be shown or offered to minority families. This is a form of discrimination called redlining.
In point of fact, all successful direct marketing is based on redlining—not offering a product or service to undesirable prospects and customers. Examples:
Premium bandits. This is consultant Bob Doscher's term for chiselers who join book and record clubs, or subscribe to magazines, to collect the yummy up-front bait—and then never buy another thing.
Serial returners. Characterized as the woman who orders three dresses from a catalog, wearing one to a wedding and another to a New Year's Eve party, before returning all three for full credit.
Non-payers. Consumers with poor credit histories.
Send no mailings to and misplace all orders from … . Packages going to inner city ZIP codes.
All of this suppression activity described above is old-fashioned, sound direct marketing.
The Three Kinds of Consumers
I believe three kinds of consumers exist: 1) those who want to save money; 2) those who want to save time; and 3) those who don't care or are too stupid to know the difference.
The folks in categories (1) and (3) above generally want good, quick service and are willing to pay for it. These are what Best Buy CEO Brad Anderson calls "angels," because they are profitable.
The worst customers are those who have time on their hands and spend hours clipping cents-off coupons from the Sunday FSIs and get red-eyed perusing the shopping comparison Web sites, scrutinizing offers and buying only the loss leaders, remainders, seconds and leftovers—or buying stuff, using it, then returning it. Anderson calls them "devils," because they are unprofitable.