Why There’s No Free Lunch

Each of us, when surfing the web, has encountered customer loyalty programs…those insidious efforts to persuade customers to share personal information with total strangers.

They start innocently enough: “Tell us your name, birthday and email and we’ll give you a free meal/bar of soap/pair of socks during the month you’re celebrating.”

They’re just being nice guys, right? Yeah…NO.

Whether they’re offering points, discounts, or free gifts (which I’d argue is redundant), these companies all share a single objective; building THEIR bottom line.

Your profile information is stored in an automated database, layered with your shopping patterns, and then sold and re-sold among marketers.

Restaurants and retailers alike understand efforts like “birthday clubs” grab the low-hanging fruit for generating new business.

Let’s say I own a local restaurant called McMarketing (Quick…Hide…here come the lawyers!) and invite you to get a free burger on your birthday.

In addition to the goodwill being generated, I know the overwhelming majority of Americans eat out on their birthday. I also recognize the average birthday table has 3-4 people, spending $78.

So as a restaurant owner it behooves me to lure you in with the offer of something free, as the profits generated by the others at your table will more than offset my promotional costs.

True, some customers will celebrate alone, but they’ll probably order a drink or fries to go with that burger, again covering marketing-related expenses.

Furthermore, regardless of whether you dined alone or with friends, odds are excellent you’ll visit McMarketing in the future. Theoretically, the costs of that free burger should return to me multiple times over the course of the next year.

No wonder a Direct Marketing Association study showed such gift offers are the most widely used and effective marketing tool. After all, people believing someone gave them something for nothing are inclined to follow a law of reciprocity.

Meaning when that shoe store sends you a “Free $10 in merchandise” coupon, you’re disposed to return there because they were nice to you and remembered your birthday.

All of which suggests that starting a birthday club can be a boon to any business’ bottom line. It’ll generate loyalty, introduce new customers to your great quality and service, and help you build your mailing list.

With that said, I wish you a week of profitable marketing.

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Start building your own customer loyalty program at www.askmrmarketing.com.

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