Archive for the 'Business Marketing' Category

Linen ‘n Things may file for Chapter 11

The Wall Street Journal reported Friday that the retailer considers bankruptcy as one of the options to solve the increasing debt problem and may file for Chapter 11 as early as Tuesday. The interesting detail is that Linens ‘n Things is a privately held company but they have to disclose financial information publicly because they have publicly-owned debt, which is obviously why we have this early warning.

A Linens ‘n Things filing would mark one of the first major retailers to seek bankruptcy protection in this economic downturn. The New Jersey retailer, which sells home products like towels, bath rugs and kitchen appliances, has about 590 stores in 46 states and employs 17,000 people.

I almost lost my gift cards when Sharper Image went down in February. Bankruptcy seems to be a convenient way for retailers to avoid paying back the loan they get from customers, which is what a gift card essentially is, and if I had any LNT cards I would run to cash them out at this very moment.

Bed Bath and Beyond is LNT’s key competitor but according MarketWatch they seem to be in better shape to weather the downturn, and as we all know the weakest dies first in a financial crisis.

A key difference between the two retailers’ situations is that Bed Bath & Beyond has $224 million of cash on hand with no long term debt, while Linens ‘n Things has cash of just $16.1 million with $650 million in long term debt.

The question you probably want to ask is who is going to be next. The companies that carry more debt are certainly more affected. The profit margin and recent history of cash flow are also important. I am trying to dig out more information on this and if you have anything to share - please post it in the comments.

What makes people use deal sites?

As I get more involved into the business of running a deal site, the topics like this one come more often to my mind. It is a seemingly simple question yet a very difficult one at the same time. If you get the answer right you will know what you need to change in your business plan and site design to help build a vibrant community around your idea.

What makes people come back to a deal site over and over again? I think many website owners will agree that the repeat users, the regulars, is the most precious type. They are more likely to advocate your business/hobby and recommend it to friends. There are really multiple reasons for them to stick with you but the major one is probably information they get on the subject of their interest - bargains.


The basic form this information takes is the deals and coupons/promotions posted on the site. This is what the most of the deal sites from my “popular list” are very good at. It is important to have fresh daily updated content or the site will start losing regulars pretty quickly.

Besides the deals the information can take another form - deal related comments and feedback the visitors leave on the site. There are very few sites in that list that can boast the community required to produce this kind of information, probably just a few from the top 10, yet it is the comments and personal recommendations that help the most when deciding on a value of a particular deal.


Humans are social creatures. The feeling of being a part of a group of like minded individuals makes us happy. If you look at the deal sites and forums, the majority of comments people leave are not really directed at helping others with bargain hunting. They are a social chitchat or small talk. Humor, flame, complains. This is what we do, we strive for attention and we get it in a form of feedback to our comments from other users.

The forum deal sites (e.g. like recently reviewed Spoofy) are the kind that are suited the best to support the community. A stricter format of a typical non-forum based deal site is not as good for this and so the owners of these sites usually run a forum on a side that they try to (more or less successfully) integrate into their main deals listings.

Financial incentives

These can include cash back on things we buy or prizes the site owners give away. Sometimes the incentives can be more elaborate, like with the no longer alive Modoshi, but these cases are very rare. Life proves that prizes by themselves are good to make existing users happy but a bad way to attract new ones, and in no way help build the feel of community.

What do you think brings return visitors to a deal site? Which site in your opinion does the best job at fulfilling these needs? Why?

Are favorite deal site poll results rigged?

Exactly 5 months ago I asked all of you to vote for your favorite deal site, and 375 of you did. The top 5 results now stand like this:

Deal Site Votes 82 82 59 39 38

The poll was set so that each vote is bound to a unique IP meaning if you used your IP once you can’t vote again. This is not a bullet proof way of eliminating duplicate votes but you really have to make an effort to go around this limitation (if you wanted to).

The comments on the other hand were not limited by IP. With that in mind, here are a couple of facts that make me think the poll results are rigged.

DealTaker comments are spam

I analyzed the comments and it appears 5 out of 8 comments praising DealTaker came from the same IP despite different usernames/emails in the comment signature. Here is the IP used:
I appreciate if anyone can find more about the geography of this address. This of course doesn’t prove anything but I am just curious.

Only top 5 positions gain votes

If you take a look at the complete list of votes, you will notice that only the top 5 positions have gained any significant number of votes. The #6 is with twice less votes than #5,
I might be wrong but this fact tells me that the voting is done by the people specifically interested to move the deal site to the top 5 to get listed on the front page.

Results go side by side

This is not as obvious unless you have been watching this for some time like I have and is especially true with positions #1 and #2. I have been seeing it happen several times: as soon as becomes the front runner, some magical force comes along and catches up. I have not paid as much attention to #4 and #5 but as you can see they have very close number of votes as well.

I am really distressed by these findings and consider pulling the poll results off the front page. What do you think?

Get $50 if you bought HD DVD player from Best Buy

Get $50 from BestBuy if your bought an HD DVD player

This is a very good example of how a company cares for its customers. Best Buy has just announced it will give a $50 gift card to everyone who bought an HD DVD player from them before February 23, 2008.

Why are they doing it? This could be somewhat compared to Steve Jobs giving credit to the folks pissed off by iPhone’s sudden price drop. A happy customer will come back and will spend more green and this little $50 investment will return back many times.

Source: HD DVD Action Center at BestBuy (via FatWallet)

Secret History of the Credit Card (tonight on PBS)

My recent $39 late fee from Chase has sparkled a small investigation on my part.

Do you have a credit card? Are you a “dead beat” or a “revolver”? Do you know how long it would take to pay your credit card balance if you only made minimum payments? Do you know why your Citibank (and many other) credit card bills come from South Dakota and not any other state?

Tonight PBS is re-airing their super-popular “Secret History of the Credit Card” program and you can find answers to these and many more questions. You can watch the show online at as well. I just did. Here is my favorite quote (about credit card companies):

These guys have figured out, the best way to compete is to put a smiley face on your commercials, a low introductory rate, and hire a team of MBA’s to lay traps in the fine print

About the late fee, I did manage to get rid of it, but it turns out there are millions who pay day in and out.

Just like gambling, credit card industry plays on people’s weaknesses, but unlike gambling you have an unrestricted ability to get your self into as deep a hole as you can dig for your self, and you can do it without even leaving your house!

Share your bargains