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.
