Loose Cannon: In Praise of Wretched Excess
The rich are not like you and me: They have more loyalty program points.
The rich are going to need them, if they are participating in Neiman Marcus’s InCircle scheme (http://www.incircle.com): It requires 5,000 points, at a dollar a point, to earn the bottom level of prizes, with the uppermost tier of gifts requiring 5 million of ‘em.
That’s 5 million points, mostly amassed in a 12-month period. Mercifully, that doesn’t necessarily represent 5 million dollars. Neiman Marcus offers several double-point days, much like one’s local supermarket. (What they give in double points, however, they take away in restrictions: Participants may only carry over 25% of their points to the next calendar year.)
Members who reach the basic 5,000-point level automatically receive a series of benefits, including discounts on automobile rentals, shipboard credit with Crystal Cruises, and complimentary dessert at any Neiman Marcus or Bergdorf Goodman store. This mix of rewards makes sense, because the only thing that says “I’ve made it” better than free cruise-ship privileges is a complimentary Twinkie at a trunk show.
The fun of the program, however, lies in the extravagant rewards at each point stratum. Among the listed prizes, the Viking Professional Toaster, which is offered at the 10,000-point level, is a lovely touch. It harkens back to the days when banks offered premiums. Why is this toaster worth spending $10,000 at Neiman Marcus? Because of its “hydraulic engaging and lifting action levels” and “control knobs with multiple browning options including a rewarm setting”. In short, this special toaster browns your bread and causes it to pop up. Neat!
One might question the sanity of those program participants who are pet owners, and who redeem 20,000 points for a dog food bowl — even if that bowl is an English bone china dish decorated with 22-karat hand gilding. Any dog presented with this will likely develop a strong sense of entitlement, and may start demanding walks at times that don’t necessarily dovetail with its owner’s schedule. Do members really want to risk encouraging this sort of attitude in their dogs?
One of the odder rewards is the “luggage concierge,” for 25,000 points. Members choosing this may have “two bags delivered one way or one bag delivered round-trip to the United Kingdom or France from the continental United States.” That’s nice, but if Neiman Marcus offered the same service to and from, say, Colombia, it might result in its customers having even more money to spend.
The luggage concierge aside, InCircle’s prizes tend to be more merchandise-oriented at the lower levels, and more experiential at the upper ones. With the exception of the occasional fur coat, at the top ranks they lean toward ever-more-elaborate vacations. One can imagine the program designers, once they reach the 1.5-million point mark, starting to panic: “We’ve already offered them Bangkok, Paris, Rome or London, and we’ve still got four more levels!”
(The designers have left themselves a bit of an out: At any level, participants can redeem their points for miles on either United or American airlines on a one-for-one basis. They can also claim an InCircle gift card good for 2.5% of the amount they are redeeming. The latter is actually a bit mystifying: After dropping, say, $5 million, do shoppers really hanker for $125,000 more of Neiman Marcus merchandise?)
At the 2 million point level there’s an oddly lowbrow travel package: Participants who turn up their noses at a week’s lodging in the Presidential Suite at a Santa Monica resort, or a safari in South Africa, or a six-night cruise along the French countryside, can elect to visit. . . the set of the soap opera “The Young and The Restless” in Los Angeles. When do people who shop enough to earn 2 million points have time to follow a soap opera?
One can’t help wondering why the program designers bothered to set up a 5 million-point tier. At the 5 million point level, Neiman Marcus should just hand program participants keys to their very own franchise outlet: Chances are they’ve purchased enough merchandise to stock it.
The dirty little secret is that InCircle isn’t an especially generous program. Assuming a participant only spends on double points days (and who is going to have the time to lick all those savings stamps?), the $125,000 InCircle gift card for $2.5 million spent represents a 5% return. In comparison, a birthday promotion from The Gap offers $15 off a $60 purchase, a 25% reward.
So why does this program work? (And make no mistake, it does work: InCircle has been around for more than 20 years). In a word, cachet. There is a certain class of consumer who thinks it’s the height of success to strut around proclaiming “Neiman Marcus thinks so much of me that it is sending me to Thailand!”
That same phrase, with “Radio Shack” substituted, just doesn’t carry the same heft.
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