It’s Mother’s Day and I just placed my last minute order for flowers on FTD.
I’m guessing that today is the biggest flower sales day of the year and that a lot of FTD customers are going to wake up to a strange charge on their card a month from now. It will be small (just $10) and many will not even notice it.
Here’s how it works…
After I placed my order, I was offered $10 off on my next purchase. Since I’ve got another order to place today, I clicked YES.
Then I was shown an official looking certificate with the $10 crossed off and $15 written over it. Wow! $10 off. Now they bump it up to $15. I’m in!
Or am I?
The skpetic in me asks “What’s the catch?” And indeed there is a catch.
I start seeing references to something called “Reservation Rewards.”
Hmmmm…what’s that?
Oh, I see…I get up to 50% off on this, up to 25% off on that etc.
Then comes the fine print. (My brother, sister, and mother are all law school graduates and as an entrepreneuur, I’ve invested a lot in my own less formal – but still very effective – legal training.)
I read…and read…and read… and finally the punchline:
By taking this one-time $15 discount on my next purchase with FTD, I’m committing myself to a $10 a mont payment forever (or until I cancel.) The YES button is huge. The “no thanks” link is microscopic.
This may or may not be a good deal, but I can tell you this, had I been impulsive and not invested significant time in decoding the offer, I would have clicked YES and found myself being billed $10 a month for something I didn’t even know I purchased.
In the direct marketing business this is known as forced continuity. The deal is in order to get Goodie #1, you have to commit to regular monthly payments for Service #2. Of course, you can cancel any time – assuming you have the time to figure out why you’re being charged $10 per month and who to contact to get out of the program.
Is forced continuity a bad thing?
Not for the merchant. There are people who will let that $10 a month charge run for YEARS and the cost to fullfill? Zero dollars. That’s a pretty good business.
But what about the consumer?
What I don’t like about the FTD deal is how overly crafty it is. Yes, from a strictly legal point of view, everything is disclosed, but the manner of presentation is well…crafty. I’m pulling up short on calling it “deceptive” but some people might.
From a business point of view, the “Reservation Rewards” deal is brillant. It can be tagged on to the post-sale to anything so even though the offer is new to me I bet it appears on hundreds of sites. Merchants must love it because it’s “free money” – an instant upsell they don’t have to conceive or manage.
But is it right? More precisely is the way this deal is being presented right?
My inclination? Study the model, test it, but clean it up a bit first before using it with my customers.
Your thoughs?
– Ken McCarthy
P.S. For over 25 years I’ve been sharing the simple but powerful things that matter in business with my clients.
If you’d like direction for your business that will work today, tomorrow and twenty years from now, visit us at the System Club.
Such trickery can lead toa bitter taste in the client’s mouth, I have been burn before finding a credit card charge ongoing for many years. Makes me think twice before jumping on any deal and reading the fine print.
Better for a business to offer a one time upsell at time of purchase for discount or point out plainly that you are signing up for $XX per month for these benefits. This way people by word of mouth (using the web) can point their friends to a good deal!
ML
Forced continuity also causes consumer backlash that the provider may not anticipate. I just tried to cancel my membership to the http://www.hometheaterspot.com. Nowhere is there any information on how to cancel the membership. There is unsubscribe info for their newsletter, but no info on how to get out.
Even though there are some good things about this particular site, the referral I will be giving will only be about how their membership continuity is setup. Probably not the referral these guys were hoping for.
Ken
I am looking to include a blog on our member page. Did you purchase the set up or program it? thanks
Thanks for highlighting this less than ethical methodology. There seems to be a spate of this going on and now that I’ve been burned I can assure you I won’t be a suckered again.
It has become a popular ruse in the Internet Marketing field with several big name gurus using less than obvious methods to get subscribers on their newsletters and such. If the subscription or membership or service is soooo good why don’t they just give us a sample copy and remind us in 30 days to subscribe?
Nope, they just don’t want to overwork their autoresponder I guess because they want your credit card first… I would like to see the wares before I give out my credit card. ‘Nuff said!
Phil Davis
It does indeed seem very shifty, thankfully I have not fallen prey for any of these in the Internet Mareting field as off yet but I will keep my eyes wide open from now on.
Hugh Fraser
Marty,
You unsubscribe by reading the unsubscribe instructions that appear on every e-mail of the subscription you signed up for.
I hope this helps.
Ken
I detest forced continuity. Of course, as a business owner I can see how easy it is to convince yourself that it’s ok. It’s hard work to keep good money coming in!
It’s not ok, and it erodes trust, which is a critical factor when trying to convince someone to pay you for goods or services. Is that extra $10 a month going to be worth the mass exodus of customers once a competitor comes along that people feel they can actually trust?
Maybe it’s a good time to get into the flower delivery business.
Forced continuity? I see this as a direct and bonafied slap in the face to integrity, in regard to someone else’s money. The same could be said about “legalized theft.” It doesn’t matter what term you apply to it, it is as it is…. Would I continue to purchase things from this company? Not on your life; as after “being burned” the first time, I would consider them to be outright thieves helping themselves to my private income, hoping that I do not notice!