Beware of falling debris

Lemme get this straight:

I can convert my Membership Rewards points into dollars that I can spend at Amazon.com. But I can also spend my points (as points) at the American Express Membership Rewards site? Really?

Well Garsh! I guess I better compare what that thingy I want costs at Amex versus what it costs at Amazon, right? You mean it's less at Amazon? Well Garsh!

The newly-announced alliance that converts points, the Coin of the Realm for all incentive programs, to money is dynamite to one of the major pillars of our market--perceived value. The entire business is based on it--the notion that the participant THINKS a widget is worth $X so they'll put in the effort required to get it.

Now, program participants know EXACTLY what their employer or credit card holder thinks of them--EXACTLY the worth of your loyalty. Yeah, yeah--the participant always could calculate it, but now they don't have to--it's right there in little pixels lit up like Times Square on New Year's Eve.

And don't give me the "but you can tell what a point is worth from frequent flyer programs" crap because THAT value is variable--a "free" ticket from NY to LA is worth more than a "free" ticket from NY to DC, but they have the same point value.

It's only AFTER you transact the business that you can determine what your points are worth. The Amex/Amazon alliance makes points worth the same regardless of what you buy. We're quantifying the perceived value, eliminating any interpretation on the part of the participant.

If the value at Amex' site and Amazon is the same, then it's no big deal, right? Maybe. That's a big stretch, though, as Amazon prides itself on having the lowest costs, especially for electronics. Now we have the opportunity for something akin to a reverse auction, where empowered Amex cardholders give their business to the low-cost provider.

And while there's nothing wrong with that philosophically (after all, Americans INVENTED shopping, didn't we?), it's another thing to encourage shopping with "funny money" which has no value outside the program in which it is earned.

When everything has a value, then nothing does. I wonder if we're sacrificing the true value of incentive programs--recognition for loyalty and/or achievement--on the altar of a shopping "experience". Or maybe I'm just Goofy...


Pete