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StitcherWhen signing up for loyalty programs, it is important to ask yourself: Am I actually saving? Because we never know, it might be a tricky marketing tactic to get you to spend more. In this episode, Jen and Jill uncover the realities of loyalty points and programs and how much they actually cost us.
If we value every loyalty program from every brand, we really value no brand; we are just valuing consumption.
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Check out some relevant episodes
Why Companies Love Loyalty Programs
This article by Mark Herbert examines why companies use loyalty programs and how they use them to gain customers.
What Jen + Jill have to say:
Jen explains that companies use loyalty programs because of the significant impact that customer loyalty and retention have on business growth. These programs help companies save costs on acquiring new clients, increase revenue growth, and attract new customers.
But little did we know, we are being lured into consumption by signing up for these programs, even if we genuinely use only a few of them, leading us to be tempted to spend impulsively. Therefore, it is important to remember that we have the freedom to unsubscribe or customize what we want to see in our email through apps like Unroll.Me.
The True Price of Loyalty Programs
Because it is convenient and appealing, members of loyalty programs tend to spend more and generate more incremental revenue growth annually compared to non-members. Therefore, Jen suggests carefully considering the value of the reward before saying yes to it.
Jill also reveals that businesses’ primary goal is to create stronger emotional connections with customers. Because when customers envision themselves achieving a specific identity or status, they are likely to spend more. And here is where loyalty rewards would start to adjust their reward system, making it increasingly difficult and costly to attain.
When Loyalty Programs Are Bad for Consumers
This article by Sally Parker presents how companies and their competitors increased prices as loyalty program expiration dates get near.
What Jen + Jill have to say:
Jen discusses the insidious consequences of loyalty programs from the perspective of competing gasoline stations. The study suggests that when gas stations increase their prices due to the ending of their loyalty programs, the 20 closest gas stations around them also raise their prices, affecting other customers. Therefore, Jen and Jill emphasize the importance of being more intentional with loyalty programs.
When do you decide to join a loyalty program, and when do you decide to skip?
Jen joins loyalty programs in frequent-flyer, Careboo, coffee chains like Starbucks and The Blend, and the restaurants she usually frequents. For her, it’s worth getting a loyalty program if she buys it anyway and can be rewarded for it; otherwise, she skips it. Similarly, Jill believes in the value of discounts that are available immediately without the need to sign up for a credit card. She prioritizes what the program can do for her rather than what she is doing for it.
Bill of The Week
Thank you Ranae for sharing your bill about receiving a childcare subsidy from your employer and saving or investing hundreds of dollars weekly!
Thanks so Much for Listening!
Thanks so much for listening. We love love love reading your kind reviews and we especially loved this one from:
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I just listened to your 6th Anniversary Special! Congratulations on 6 years and 406 episodes (according to my podcast player).
I listen to the podcast because it's playful and fun. So many others are all serious, it's a different way to get content and keep me focused on my goals that never makes me feel like I'm doing something wrong or I'm behind. I also like the mix of topics where one of you knows more about it than the other. It really gives us better information since one is asking the questions that the listener may ask. I didn't realize it was a requirement to be experts in all things to have a podcast. I think the best ones are where you are learning something too. Not sure why I felt like responding today, but I hope at least some of it makes you smile. Keep up the great work.
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