When FREE is a four letter word
Now I hate to single out one particular financial institution for this because they all do it in one fashion or another, but there’s a particular campaign that’s popular on facebook at the moment that is, in my opinion, a good example of when free is not as free as you might think. You get 5 free gifts and get to give away 5 gifts to friends and family through a website. They get to tell your friends about their products and services and how their money stays in your community when you bank with them.
I happen to be a member of one of these financial institutions (FI) and agree that some of the money stays in the community as patronage rebates, it’s not entirely accurate to state that all the money stays in the community. In fact, ironically, most of the “free” gifts are gift cards to national chains. Not much local about that. And because the FIs in question are member-owned, ultimately, the members pay for the campaign and the gifts as part of the operating costs.
If you’re not convinced, ask the manager of your FI where the lion’s share of the profits are placed (or invested) and what proportion, if any, of local mortgages are bundled and sold to central agencies. The answers might surprise you.
Ultimately, as consumers, we’re drawn to that four letter free word. Free gift with purchase, free loyalty rewards for program sign up, free gift with application (my least favourite). If you exchange your personal information or the personal information of friends and family to receive a benefit of any kind, you’re the one giving value away for next to nothing.
As consumers, we are also “products” of sorts – our information has value as does our patronage – most customers have a lifetime value (what you’re worth to the business over time), a retention value (what’s they’ll pay to keep you) and an acquisition value (what they’ll pay to get you in the first place). These campaigns – that offer free items or services of any kind – are part of your acquisition value.
So do the math, and if it adds up for you – that’s fine – but be mindful that free does have a cost. One that we all pay for in the long term. And once you give away your privacy, you can never get it back. It’s just a matter of determining what you’re prepared to pay when and if you do so.