Act 187

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.

Act 21

Go ahead. Ask.

This blog has lead to more than a few interesting conversation with friends and family many of whom who like me, own a small business.

We got to talking about banking, a favourite subject of ours, and came up with an idea that might actually net some benefit.

As small businesses, we pay significant amounts of interest, charges, insurance, other premiums and fees. So why not write said suppliers a letter asking them to return the favour in the interest of showing the same support toward your business.

It’s called reciprocity and it’s very common in the B2B world. If you build equipment for GM, your fleet of trucks are likely GMs. That’s how it works.

Say I paid, well, 5 figures in mortgage interest and insurance premiums last year. It can’t hurt to pen a polite note saying as much and asking that as a loyal customer, they include you in their purchase plans too.

Perhaps they would consider gift certificates for employees incentives, referrals to other clients, gift giving ideas for customers. Wouldn’t hurt to try. What’s the worst that can happen? They say no. Then you know that it might be time to try doing business with someone new.

I know it’s a bit cheeky, but it’s worth a try. Who’s with me?

Dear {insert financial institution name here}

My business {insert business name here} has been a loyal customer of your institution since {insert date here}. Over the years our business has spent approximately {insert dollar amount here} on your goods and services which were received in good order. Thank you. 

We write to offer you, in return, an opportunity to support our business by considering us in your plans to offer employee incentives or client gifts by considering purchasing {insert your product here} from us.

Please see the enclosed {flyer/brochure) for more information. 

We look forward to a prosperous future together.


{insert name here, insert business here}