Why loyalty programs in Italy don't work and why it's only "our" fault
While in the United States loyalty programs are a real economy and part of the DNA of every [...]
Whereas in the United States, loyalty programs are a real economy and part of every American's DNA, in Italy we are more or less in the Stone Age or almost.
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The reason is twofold: a law that complicates the development of point collections and companies that go out of their way never to give anything away to the loyal customer.
If we think of the world of large retailers, it is a classic example of a phony program. Not only do you have to pay and collect stamps or points, which with surgical precision (even more frequently than the law says) expire with no chance of being saved in any way, but even when the customer decides to redeem a prize whether it is a pot or an electric blanket, you also have to pay to get it.
If we then go to look at the actual value of the prize chosen, we find that, on the best of occasions, it is a product that is 2 years old (the average lifespan of catalogs) and often has a market value that is less than the cost to the user. If, however, Esselunga or Coop do not change their attitude. is only the fault of the user who rather than nothing, continues to spend money to buy pots and pans and sheets.
The only different approach is the Payback multi-partner collection, who was obviously not born in Italy, but in Germany. After a first crackling period today is just a shadow of the program that was when it came to Italy and instead is still in Germany, just as Nectar disappeared from the Italian market, it is a powerhouse in the UK.
On the air program side, we are also historically bad. Millemiglia has always taken "fish" in the face of its members.: few award places and points that kept expiring and very little chance of renewing them without losing thousands of points until it died with regularly issued award tickets cancelled And devalued points.
From the ashes of MM rose Volare, and it's not like we're in much better shape: two years after its inception and joining Skyteam, there is still no certainty of seeing one's benefits recognized, and the chances of accumulating points are slim to none unless one flies ITA. Without forgetting that Flying is to date. the only frequent flyer program that does not have an award chart.
It's not like we are America
Very often I read comparisons with the United States, criticism of American Express especially for the different treatment for star-studded customers compared to tricolor customers. Unthinkable to compare a market of more than 500M users with that of Italy, without considering the propensity for card use in the U.S. compared to Italy.
So it is obvious that if programs make less money they cannot be as generous in terms of benefits and bonuses.
Little desire to "study"
In the U.S. you grow up on burgers and points, in Italy you don't. The point is that judging from the questions I receive daily and to which I often respond you don't want to "learn" you hope others will answer the same question 1000 times.
The other scenario is hearsay, stuff like "my cousin told me there are never places to use the points" and so it's all just a scam and there's nothing real and the points always expire.
Always looking for the shortcut
The Americans invented a term "Manufactured spending." i.e., that activity that simulates an expenditure and then repays that expenditure with the money that was obtained from the initial expenditure. While in the U.S. it is a practice forbidden by credit card operators, but not illegal, in Italy this activity is called "Self-financing" and it is indeed illegal.
The basis of this activity is to maximize credit card spending to earn points while minimizing negative effects on the bank account balance.
In the U.S. the MS has scaled back the reward travel game quite a bit, with companies and financial managers becoming more and more careful to close any loopholes; in our country this activity is called self-funding and it is just illegal.
I often see solutions implemented/advised that border on "scamming" and the nice thing is that people even write it on facebook bragging about it, while others get angry about not being able to cheat the system, really Machiavellian.
One example is the recent promotion launched by ITA Airways and American Express. I honestly have no idea if in Volare they had foreseen everything that has been happening for the past week or so. The result I can see is that thousands of users have been thinking about "ripping off" the system by looking for every loophole they can, stuff that I swear to you not even Arsenius Lupin.
Better the egg today than the chicken tomorrow
The sum of all these factors leads the Italian user to do not believe in loyalty programs and to focus on the immediate benefit rather than the larger, but distant to reach, prize. Many users prefer a cashback offer, as opposed to a points offer; others choose to use points to discount an expense rather than accumulate for the "first prize."
The confirmation came directly from the #1 of Amex in Italy, Enzo Quarenghi, who in an interview told me that most Italian users aim for emotional spending rather than rational spending. And if the market wants this, it is only fair that companies choose this approach rather than the American model.
Of course, the bum doesn't give up and will continue to evangelize Italian users to use points in the best way possible so as Joseph did who is preparing for his Christmas vacation to the Maldives where, thanks to points, Will save nearly 30,000 euros.
