When Brands Know What We’re Worth, They’ll Treat Us Accordingly

This week Gilt.com agreed to offer a special percentage discount to Klout users based on their Klout influence score. The higher the score, the larger the discount (up to 100% off). This is one of a new class of “perks” to come from Klout. While the introduction of programs like this are extremely exciting, especially to those with a high degree of influence, they also portend a future we need to approach with a measure of caution.

Several trends are converging to make this new class of rewards possible. Brands are tracking buying behavior through both POS systems, and they know what and when we’re buying. What’s more, CRM systems allow brands to connect specific users to specific behaviors, most often through loyalty cards or logins (in the case of eCommerce). With the introduction of systems like Klout (that rate your influence) and Ness (that understands your preferences), a new kind of brand/consumer understanding is emerging– it is finally possible to measure, and connect to specific individuals, some really potent metrics:

• Spend. The more you spend with them, the more you matter.
• Income. If you have it, you might someday spend it with them.
• Influence. If you say jump, thousands say “let’s buy!”

What has been perplexing to date is what brands do with this information: not much. Other than the occasional free pastry at Panera, first class upgrade, and 1% cash back, our buying behavior doesn’t substantially change our experience. Imagine walking into a Target and being greeted by an employee who knew that you spend 200% more than your neighbors. They could have a special cart waiting for you – clean, stocked with your favorite Starbucks drink, and so on.

This partnership between Gilt and Klout strikes a chord with me, because it’s a step down what may well be an inevitable slippery slope toward truly personal brand experiences of varying treatment, availability, and price. If your influence score is high, why not give you something for less? You’ll tell your friends, right? And if you make more money than the person waiting in line in front of you, doesn’t it make sense to give you a private check out so that you’re more likely to come back? Doesn’t this all make sense?

Of course it does.

At first blush it makes great business sense. Treat your best customers (and prospects) like gold, and chase the shitty ones away. Treating different customers differently has been on our radar forever. Seth Godin was talking about phasing out your worst customers in 2007. And we’re all at least casually aware that celebrities in our culture pay for nothing, wait for no one, and are desperately sought after for their influential pixie dust. With all this in mind, rewarding influence and buying power seems like an obvious move – zero in on your tribe and watch your margins go up.

From a game design and psychology perspective, I’m wildly in favor of this future. Different levels and levers may well inspire us to engage with brands in new and more dynamic ways. But something about this vision also leaves a pit in my stomach. Can we really make sense of a world that routinely and deliberately shows us our “class” in the retail caste system? Will this have unintended consequences? And will this further accelerate the gap between the 1% and the other 99%? I’ll be exploring those questions soon, but right now I have to buy a t-shirt at 50% off before they release it to the plebes.