Question

Darnell has a discount card to use the local coffee shop . When he shows his card, he can save $0.75 off every purchase. Complete the table too show how much he pays (p) after using his discount card for each cup of coffee (c)

In the space below use words numers and/or symbols to explain how you found your answer

Answer 1

First, it’s a loyalty program. They are rewarding their loyal customers with a lower price. This is good for building long term clients and maximizing lifetime revenue of a customer. However, as a loyalty program it has a pretty big flaw. After the customer gets his free coffee, he is back to ground zero and has no built up financial incentive to return. Of course he does still know he gets a lower price if he buys 10 more.