Breakage is a popular FT hypothesis, but people who design promotions seek engagement. Breakage is failure. Requiring registration allows them to estimate how many "new" customers the promotion attracted, and it also generates a list of consumers who were interested enough to register, but did not buy, and they can target these people with other offers. For Oura selling a ring is just the beginning, the service subscription is the objective.
what you said is correct, but at the same time, breakage is not just a FT hypothesis
first, your point about using pre-registration to estimate the number of "new" customers is more for merchant funded credits. which aligns with what i said earlier; it doesnt affect amex financially [and may drive engagement], so they are more agreeable to apply the oura credit retrospectively. but note that there are no "new" customers when it comes to amex credits, and those are the credits where they are less agreeable in my experience
Originally Posted by
Caspavio
for merchant funded credits, it doesnt affect amex either way, so they are more agreeable
in fact, i had a similar discussion with a friend who worked in the credit card department of a bank, and he confirmed breakage is something they take into consideration heavily when deciding AF and estimating profitability of a card. breakage is also a tool that allows them to give enticing credits/benefits that make good headline, but in fact cost them much less, so it drives their profitability. so breakage is failure, but breakage is also good for them, and it is a balancing act between these 2 competing needs
below is a screenshot of a lifestyle benefit of my overseas amex card. there is no reason to require 8 to 10 weeks to enroll for a credit, and it does take the full 8-10 weeks. since this is a half yearly credit, the timeline means that there are 2 11-12 weeks windows in a year where new cardholders will miss out their first credit. meanwhile, a similar lifestyle credit on another amex card doesnt have this 10 weeks processing time. the difference? the participating merchant list is a lot more restricted. also note that enrollment for this and other benefits cannot be done via the app, it has to be via a special link and the link isnt that easily found on the credit card main page or inside the app. idk how else to explain the very unfriendly process/policy if not for breakage, and it is certainly not to drive engagement. it is also some proof that issuers do use pre-registration to introduce breakage
and even though the above has been ongoing for so many years, there are a lot of people i know, who are credit card aficionados, who forgot to reregister for this credit or failed to do so in time. you can imagine the % will be higher for the average public. and dont for one second think that amex didnt notice this. this drives engagement? it only drives frustration