A few years ago I went into a supplement shop to buy some gels – these are individual wrapped single servings of complex sugar in a gel form. People take them when they are running or riding a bike (or doing anything that makes eating / digestion challenging or impossible). What I found interesting was the price of them. There were two prices, the regular price and the card member price. What was odd and completely transparent was that the card member price was the same as the regular price at SportChek. The card at the supplement shop cost $10 or $20 and it entitled me to pay the same price as I would have to pay elsewhere. I left after buying nothing. I haven’t bought anything from them since they created this program because I don’t like feeling like an idiot.
I recently remembered this when I went to Mountain Equipment Coop (MEC) to buy shoes and was asked for my membership card. The whole process of becoming a member / owner at / of MEC was strange when I first shopped there but the cost of the card was low enough for me to not care, given that their prices are really good and have never been mistreated by them. That card paid for itself with the first thing I bought there.
Recently another one of these type of programs has come to my attention. Again it is supplements, but this time it’s a little more complicated and uses cognitive biases to capture people and their money.
It starts off with a specific course that you take and need to renew every year. The initial course costs a little more than $1000. You have a few options to renew your certification and can take on-line courses. Depending upon which ones you take, it’ll cost between $450 – $725 for two courses which will count towards your renewal. It isn’t clear what you do the following year but it looks like you will at some point need to take the initial course again; that looks like another $1000.
If you are successful at completing the course, you will then be allowed to sell their supplement line. They will give you the wholesale price on these supplement. If you fail to renew your certification, you will no longer get the wholesale price. I don’t know what the wholesale price is, but their retail price is fairly high and they sell vitamin E (supplementing with vitamin E has been linked to increased risk of prostate cancer and it probably shouldn’t be sold) so I question their intentions of selling any supplements.
What sucks about this last example is that it plays on the sunk cost fallacy – those spending the money to get the certification are disinclined to give it up given that they have spend a lot of money on it. It also creates the illusion of a great value because if you get the certification you get to save a bunch of money on the supplements that they recommend during the course, compared to the retail price of these supplements.
I won’t speak about the course because I haven’t taken it. Those I know who have, do come out of it with a sense of having gained profound insight about what makes people gain / drop body fat. And they do come out very enthusiastic about the quality of the supplements that they can now sell and how they can prescribe these supplements to help people achieve their fitness and physique goals. So long as they workout regularly, intensely and specifically, and eat moderate amounts of high quality food, including lots of vegetables.
Maybe I don’t understand the draw here, but it seems like the course is a gateway to capturing resellers of their supplements, which will help people achieve their goals so long as they do all the things that evidence based science has repeatedly demonstrates helps people drop body fat and improve muscle tone.
It’s one heck of a business model! Get people to pay you to convince them that you have the solution and then let them sell this solution for you, over and over and over again to the people they convinced to buy it.