by 
So many organizations today are seeking the exalted premium segment of customers. Premium of course requires a regular or mass segment to distinguish itself from. Perhaps nothing is a more damming illustration of the perversity of the current system and the need for After Capitalism. It has become a desirable goal to create a system that panders to the few at the expense of the many. This is not seen as unfortunate, but rather as the objective. It reflects the current stratification of societies.
- The 0.1% is the golden ticket.
- There is money to be had from the 9.9% knowledge elite serving the 0.1%, but they are too busy working to enjoy it.
- And then there is everyone else, the 90%, who are to be set apart from.
Beyond the obvious high-end luxury goods, services, and stores, are the various loyalty programs, mostly aimed at the 9.9%. They are a blatant illustration of of tiered systems, with elite, super-elite, and doubleplusgood elites. Once one is hooked, the climb to the progressive harder-to-reach next tier for increasingly stingy benefits ensues – they also offer an aspirational view to the 90% of what they too might one day get.
Ironically, they are positioned as “loyalty” programs, but they are really anti-loyalty programs — with the supreme irony being the whole goal of loyalty is to lock you in so you can’t leave, not because you’re loyal, but because you’re locked-in by your status. If you provided good service, people might be loyal – without the handcuffs – but I digress.
A sad truth is that it is only with the premium segment that the bean-counters in organizations actually allow adding cost, since they can get it back with the premiums. For most everyone else, every penny is scrutinized and the result is putting out a minimum viable product
Why de-premimization?
There is the moral argument of why deliberately set out to set ourselves apart, which appeals to supporters of After Capitalism.
But to appeal to capitalist logic, there is the numbers argument. Just a little bit of math raises questions about this approach. Population growth is down just about everywhere on the globe. Immigration is a challenging strategy. Economic prospects are not looking so great. And the exclusive premier segments aspire to be every more exclusive. All this suggests more and more organizations fighting over fewer and fewer people. Premiumization is just not good business. De-premiumization is much more aligned with the emerging future. – Andy Hines
It’s interesting to read this while Chinese luxury good manufacturers are appealing to consumers on TikTok to buy direct at much lower costs.
it seems to me you are advocating for a disguised version of marxism.
a crucial aspect of individual liberty is the freedom to use your resources, the way you want to use them, to achieve your individual/personal goals (of course, with limitations barring direct harm of others).
what is perverse about someone (willing to risk their time, capital, reputation, and energy) pursuing an economic exchange with any segment, regardless of the dynamics of said segment?
may i ask, where did you get this: “the supreme irony being the whole goal of loyalty is to lock you in so you can’t leave…”? perhaps i’m not sensitive enough, or maybe i’m just a fool, but i’ve never felt locked into a loyalty program. on the other hand, i have felt locked into the draft (vietnam), taxes, medicare, annual auto inspection and registration, and other local, state, and federal impositions…
advocating for a new standard of commerce based on a “moral bias” about segmentation is perverse and the milieu of tyranny…
Q,
Interesting that you see this as Marxism in disguise. My own reading is quite different. In fact, I’d argue that your (our) desire to “use your resources to achieve personal goals” is precisely what’s being undermined by the premium model. It artificially inflates costs without delivering equivalent real value. Having worked in marketing earlier in my career, I can tell you that loyalty programs—though a side note in the point the author is making here—are specifically designed to lock you in. Of course, you can choose to leave, and perhaps you’re savvy enough to do so, but behavioral economics shows that most people don’t.
If we look at key sectors in the U.S.—education, health, and housing—we see that the costs of life’s most important assets have soared beyond reach for many (or even most). Yes, inefficiencies, bubbles play a role, but a significant part of the issue is how these sectors have been productized and layered with premiums. A few decades ago, people typically attended local universities, earned useful degrees, and secured decent jobs. Now, the conversation is dominated by rankings, exclusivity, and reputational signaling. As a result, the concept of “premium” has become a gatekeeper—and it actively limits our ability to get the most out of our resources. Worse, it may define what’s considered “good enough” by those who control access to opportunity to earn those resources in the first place.
I don’t think the author is driven by moral bias. Rather, they’re pointing out a potential truth: the current model isn’t practically sustainable. And that opens up space for exploring how the future might unfold differently.
You, in turn, sketch your own preferred future in your comment: no drafts (which, hopefully, means no wars), no government (likely implied by no taxes), and possibly the dissolution of states and unions (which are, by definition, held together by shared rules and values). That’s a bold vision—not one I share—but it does carry its own kind of moral bias, one that arguably makes the author’s position look rather modest by comparison.
Best,
M
it seems we disagree on every point.
what i quoted is economics 101 – ” every moment, every person, uses their limited resources, to achieve their most desirable outcome.” which is why, as you know being a marketing professional, every human decision is “emotional”.
i did not sketch a preferred future. that is your imagination attributing a motive to my comments – that doesn’t exist. i simply pointed out aspects of our society that do “lock” us. those same type of functions are required to create a “non-perverse” economy. when the government enforces economic conditions on the society it tends to be marxist in nature – again 101 economics.
It is defensible to opine that many people stay in loyalty programs because they like them – not just because they are “locked in”. And they do so because they think it is the best use of their resources.
The views shared by you and Andy imply:
– people aren’t using their resources well (your bias about loyalty programs)
– emotional obstacles are leveraged that people cannot overcome (they are victims, the oppressed)
– the solution is an economic system that protects them from this trap set by the oppressors/manipulators…
The root cause you two are talking about here is human nature – succumbing to the emotional forces of envy, self-image, societal status, and “marketing tricks”.
However, we can’t change human nature, and in the face of such conditions there is a subset of humanity that suggests using “the system” to protect people from their weaknesses…
Additionally, nature is a problem (in addition to oppressors). Assets and opportunities are not equally distributed anywhere in the universe.
The views of Marx sound very similar: oppressed/manipulated people, oppressors, inequity and a solution…