How will you be spending May 1st?

Did you know that on Monday, May 1st, it will be the 25th anniversary of the first Frequent Flyer programmes? An article in the New York Times looks back at the 25 years. Who cares right? Well there is an interesting human behaviour that this article touches on. We (you and I) will do some pretty irrational things for the promise of something free; for the illusion of something gained and nothing given in return.

There is something very curious about why we, as consumers, buy into these loyalty schemes from businesses. The article points to research that finds American travellers will spend an average of USD$170 more the cheapest fare to fly with the airline they get miles from. Do they not realise that if they went with the cheapest airline every time, they would have more money in the pocket which could be spent on an array of options not just travel (or even that quaint idea called savings)?

It just doesn’t make sense (to me). Yet, I think of how this applies to other areas of life. How many of the people we relate to are simply connections based on getting something from them for nothing? We always buy coffee when a certain barista is working at our local café because she gives us a free coffee every now and again. We associate ourselves with certain people because being able to say we know them gives us status, even though their character is less than what we would look for in other friends (and this may be particularly relevant if you belong to online social networks - personal, business, or otherwise).

While this post is a slight divergence from what I normally blog about, I feel there is merit in taking this opportunity to reflect on why we associate ourselves with certain businesses and people.

And remember, (and I remind people of all the time) the price structure of products and services is designed to cover the cost of loyalty programmes and give-aways etc. They are getting something for free, not us. Our Loyalty. Scratch that, we are actually paying them to have it.