Gap’s new pilot service, Sprize, deals with an age-old irritation. You buy something at full-price only to find it reduced in a sale a few days later.
It is irritating for customers, who tend to feel ripped-off or cheated by the store or staff. But it is also a problem for stores, because it means customers defer buying things until they are discounted in a sale and thus potentially lose a sale because the customer forgets to come back or shops elsewhere.
Sprize works by customers opening a Sprize account where they accrue “SprizeMoney” (currently one-to-one in terms of Canadian dollars). If you buy something in Gap and the price on the item drops within 45 days, the difference is credited to your Sprize account.
It’s an interesting piece of service design because it deals with a customer annoyance, but also benefits the store. Actually, it’s still quite weighted towards the store’s benefit because the SprizeMoney can only be spent in Gap stores. So it is more like receiving a credit note for the difference. Gap still get to keep your money (and you must spend it within a year).
This kind of shifting of the perception of value is something I find fascinating. People will regularly make an effort to gain small savings in one area (the few cents difference between the cost of washing powders, for example), whilst ignoring spending in another (the over-priced coffee they drank whilst out shopping).
Oddly, time-shifting payments can sometimes feel like free, even when it is shifted into a lump sum. In Switzerland you can buy a season ticket called a General Abonnement. It seems that almost everyone who lives in Switzerland has one. The 2nd class adult one is CHF 3,100 per year (about £1,850 or US$3,050). So it’s not cheap, but it’s a one-off outlay. When you talk to people about their train usage, one if the things they say is that love taking the train because because it’s free (that and the trains in Switzerland are punctual and pleasant). This sense of it being ‘free’ means people are much more spontaneous with their train travel because they no longer think about the cost or hassle of buying tickets. Even if you don’t think of it as free, the effect is like an all-you-can-eat buffet – people have spent the money, so they try and get the most out of it, which encourages the use of public transport.
Like Sprize, a great deal of the benefit is really for the Swiss rail network (the SBB, CFF or FFS, depending on the language you choose). They get to have a large sum of everyone’s cash up-front, which they can then invest and make even more money from.
The benefit goes both ways – there’s a financial one for SBB and a lesser financial one for the customer, but in return SBB get more value from their customers’ money and the customer feels like they travel for free. Free as in the ‘free’ minutes you get monthly on your mobile phone contract, which you also pay for. The reason why people hate their mobile phone companies, though, is because they don’t hold to their side of the bargain thanks to the terrible service they tend to offer.
Sometimes service design is about getting the service right, sometimes it’s about presenting the evidence of the existing, positive service in the right way.