The other day I was in Toys R Us with my 4 year old. She test drove this pink Barbie Escalade… tried to talk me into buying it but we ended up getting out of there just picking up a couple small things.
When we checked out the lady made a hard play to get me to sign up for their rewards club which gives me points for things when I buy stuff at Toys R Us and get free things or something. She was not giving up on trying to get my to sign up for this card and was pulling out all the stops. Saying stuff like “Do you really like loosing money I just don’t understand why you would want to pass up free money”. (she must have seen my weapons of marketing video lol).
When I asked her why she was trying so hard to sell me on this stupid rewards card she was like, “listen I am just looking out for you. They are giving away so much money that I am sure they will stop the program soon and I don’t want you to miss out!”.
There was nobody behind us in line so I engaged her a bit. I was like listen level with me what do you get like $2 per person who signs up? She said $5. I was like wow is that really worth it? and she replied umm if I get a sign up a hour that basically increases my pay by 50%. Amazing.
Here is a person working her ass off for $10 an hour doing essentially a offline CPA (cost per action) offer paying $5.
She said at Toys R Us they have a handbook which teaches them all these sales techniques.
After I played 20 questions with her she had one for me, “So why don’t you sign up!”.
I told her, “Because people like me buy the data you are collecting. As soon as people see what I am spending on kids stuff I am going to start getting tons of mail to my house and calls trying to sell me shit.”
I was like listen for some people maybe this is a good deal…. But for guys like me who know what happens to the data I can tell you for every person that you get to sign up Toys R Us is getting probably 60-80$ per person selling that data (actually friends in retail tell me its much more depending obviously on the person).
I find reward programs extremely fascinating. Lets be honest. These companies are not losing money on these “reward” programs. We can learn a LOT by looking at all the techniques they use.
Tomorrow I am going to break down one of my favorite “rewards program” and point out every marketing trick they are using and what we, as internet marketers can learn from them.