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What I have learned about ‘loyalty’ and ‘deals’ in the first week of Shopper Points

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Ten days ago, I launched Shopper Points.  This is a site devoted entirely to Tesco Clubcard and Nectar and is designed to help the many, many people who come to HfP looking for Clubcard deals but are put off by the frequent flyer focus.

All of the best Clubcard deals will continue to be covered on Head for Points, but Shopper Points will cover all bonus point offers.  We – and I genuinely mean ‘we’, as I have someone helping me write it – will also be desperately trying to find some value in Nectar for the Sainsbury’s shoppers out there 🙂

Anyway ….

To launch the site, I booked some Facebook advertising.  This was targetted at people who had shown an interest in Clubcard and the ad promoted my exclusive TopCashback sign-up deal.

What could go wrong?  I was showing an advert to people who are already interested in Clubcard, offering them 1,000 points for joining TopCashback.  TopCashback, remember, is a business with 4.5 million existing members and is one of the fastest growing private companies in Britain.  If you choose the free option, it doesn’t cost you a penny to join.  Who could be unhappy about that?

Suddenly, however, I start getting comments posted on the Facebook ad.  (The ad was technically a post and could therefore be commented on.)  ‘Scam’.  ‘Must be a scam’.  ‘Seems too good to be true, must be a scam peeps’.  ‘Scam’ etc etc.

These were comments posted by people who had been shown the ad in their feed.  Without actually bothering to read about the deal, they decided to diss it.  Not one person actually gave any reason for saying what they said.  These are people who had already shown an interest in Clubcard, remember.

This has never, ever happened with any Head for Points article.

It set me thinking.

Shopper Points - Header

Let’s look logically at some of the deals I discuss on HfP.  Let’s take the Hilton Visa card, for example.  This gets you a free night at ANY Hilton Family hotel when you spend just £750 – a pretty easy stretch for most people in a full-time job.

This bonus is worth £250 if used properly, ie at an expensive Hilton, Conrad or Waldorf-Astoria.  On that basis, why haven’t 2 million people taken out this card?  Why doesn’t everyone in the UK travelling to New York get this free card, spend £750 and get a free night in a suite (the hotel is all-suite) at the five-star Conrad?  A couple could get two cards and get two free nights.

Let’s take something more straightforward.  Amex Gold is free and comes with 20,000 Membership Rewards points.  Even if you ‘waste’ them by redeeming for Amazon gift codes, you will still get £100.  OK, hitting the spend target on this card is harder but it is still £100 for almost nothing.  For someone on the average UK salary of £26,500 (£81 per day net) we are talking about 1.25 days of salary for 20 minutes work of filling in the form and cancelling the card later.

When I go into John Lewis, I am bombarded with people desperate for me to take out a John Lewis credit card – for which I will get a £10 sign-up bonus.  Hilton will give you something worth 25x as much.  Amex Gold is worth at least 10x as much.

Why do these deals never go mainstream?  I know that frequent flyer schemes are complex – this site wouldn’t have much to write about if they weren’t! – but the Hilton and Amex Gold offers are straightforward.  The personal finance sections of the newspapers don’t cover them, even though they get excited about a free £10 John Lewis voucher.

As I found this week, the very idea that a company may be giving away 1,000 Tesco points as a marketing incentive is seen as literally unbelievable by some people.  Logically it is sensible marketing by TCB, especially compared with an expensive TV or press campaign which would cost them far, far more per new sign-up.

In the frequent flyer circle, we ‘get it’.  We understand why companies offer deals, even deals which seem remarkably generous.  Even Qatar Airways £800 business class fares to Asia make sense when you know they have a high sunk cost (a plane), a perishable product sold in a small market (business class seats from Copenhagen) and modest variable costs (low fuel prices). It isn’t really ‘something for nothing’ when you know how the business works.

Similarly, TopCashback knows after all these years how much revenue it will make from the average new member over the first few years.  If they can sign people up for, say, 50% of that cost (ie the cost of the Clubcard points) then it makes perfect sense.

Do the wider general public fail to understand how business works?  Or have they been burnt by too many dodgy deals in the past?  Whatever the reason, the reaction I got to my Facebook advertising this week was absolutely not what I expected.

Comments (110)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Richard says:

    I didn’t expect widespread agreement 😉 However, if you don’t think that (most) credit card companies want to encourage you to run up debt, then it’s really you who’s making the laughable point. It isn’t necessarily a bad thing! As long as you can afford it, credit helps you get on in life. But denying it’s what they do is like denying that Ford wants to sell more cars.

    Similarly, the fact that you (and I) remember to switch electricity company every year doesn’t negate the point I actually made – that the discount-now, hike-later model is badly-regarded. I’m sure that everyone here can manage all these things perfectly well, but I was commenting on perceptions – which is what this article is all about.

  • Nick Burch says:

    I have a few friends who travel a lot in economy. Tried explaining about ex-EUs and the like, but even amongst those who understood it, most said “I just can’t be bothered with that extra night away and two more changes just for business class. That’s normally from people who have tried business class, so they do know what they’re missing, it’s just their personal priorities that differ to mine / most of ours

    One friend jokingly told me off for not having explained ex-EUs earlier, and does them all the time, albeit economy ex-EUs. Another sometimes texts with “is Dublin still the cheaper place for LA, and what’s the hotel I should stay in again?”. The two friends with my partner BA silver cards have got the hang of posting smiling selfies with champagne in the lounge 🙂

  • Charlie says:

    I’ll do almost anything for cheap business-class flights.

    But I’ve not changed my bank since I joined them in the 90s.

    We’re strange creatures!

    • harry says:

      How about adding a second bank?, I suggest Barclays current a/c, get the Travel Plus Pack in month 2 onwards (not month 1) for £13.50, you get 6 Dragonpass Lounge passes, cancel this insurance in month 3, you get to keep the passes. Open a couple of pointless/ low value direct debits, switch banks to Halifax or similar for £150

    • Kathy says:

      This is exactly why some banks will actually pay you to switch! Completely free money, from a bank.

      Most people still don’t do it.

    • Fenny says:

      I still have the same bank account I opened before going to college in 1983, but I have a second current account and several, now dormant, savings accounts. All were the best for whatever when I opened them, then moved my (usually meagre) savings when they dropped the rates. I even had a Girobank account because you could send messages to friends by transferring 25p to their account. Cheaper than a stamp, because they transferred the money back with their message.

  • Sandgrounder says:

    OT:

    Speaking of ‘too good to be true’, Club Carlson just sent me 5000 free Gold Points for Chriistmas. Make sure you open the email guys! Yo ho ho!

  • Robstaaaar says:

    Oops, typo – “…strictly just pay off…”

  • harry says:

    Quick answer on one point – don’t cancel the Tesco card, that is a negative, just put it in a drawer & stop using it

  • Robstaaaar says:

    pps, I thought i was doing well having built up about 64K avios (nee air miles) – over the last 10 years!!!

  • Nick M says:

    Hi Dave,
    I’d be very interested in hearing more about this! – What’s the website?
    Nick

This article is closed to new comments. Feel free to ask your question in the HfP forums.

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