It’s an age-old question: why pay for something you can get for free?
For a lot of reasons, actually (a free dentist sounds a little scary, right?). We opt to pay for products or services when we want better service or higher quality products. Often, getting something for free simply means that we’re paying in other ways. So when gauging whether to go with a free employee discount program or a paid one, it’s important to know what your company stands to gain or lose in the process.
So let’s break it down. In this article, we’ll cover the key differences between paid and free employee discount programs so you can weigh the pros and cons before making your decision.
What’s the fundamental difference between paid and free programs?
The product. Free programs aggregate publicly available offers onto one platform so employees can access them from one place. Paid programs offer exclusive employee discounts negotiated directly with vendors that are available only to paid members.
How do free corporate discount providers make money?
Usually in some or all of these ways:
- Selling ads: Advertisers pay the free provider to show ads that target your employees
- Selling data: The free provider will sell employee data to third-party organizations for marketing purposes.
- Fees: The discount on an item might look good, but when you get to the checkout and see “convenience” and other fees attached, it tends to not look so good anymore.
- Affiliate Marketing: This is the most common model; the free provider makes money off of every transaction on its site. Advertisers list offers as “perks” on the platform and give the free provider a cut of whatever the employee buys.
Paid programs don’t show ads or sell data; instead, they charge companies a negotiated monthly fee or a set per-employee-per-month (PEPM) rate so employees can access the private platform.
So, why should I buy a corporate discount platform for my company?
The old adage, you get what you pay for is true. If your goal is to drive the most value to employees, then a paid program will deliver on that promise.
Remember that for paid programs, you and your employees are their customers; for free programs, it’s their advertisers. They have fundamentally different goals to hit, and this seriously affects how they go about marketing and building out their products.
Below are six reasons it’s worth opting for a paid program:
1. The Discount Amount
Paid employee discount programs offer steep discounts that are diverse and exclusive. Since paid programs foster direct relationships with local and national retailers, employees can access special offers of at least 15% off brand names that don’t expire.
Free programs offer discounts that are accessible to the public and small; smaller even, because the product or service provider reduces the discount percentage to make up for the cost of paying the platform for each transaction. Hidden fees at checkout can render the discounts almost nonexistent.
2. Advertising
Paid programs don’t depend on ads for revenue, so employees aren’t hounded with random deals on the platform. The site is designed to be simple and easy to navigate for employees to find and bookmark their favorite deals.
For free programs, ads are their lifeblood. Employees are fed deals that bring the platform and advertisers the most money — not necessarily the best deals for the employee. Free programs are usually cluttered with ads, making them hard to navigate and unwieldy.
3. Privacy
Paid employee discount programs keep your employees’ information under lock and key, since they know that’s a huge priority for companies. There is no customer profiling and no selling employee data for profit.
Free programs can be tricky. Often, written in fine print, there’s a clause allowing the platform to sell employee information to third party organizations. They are allowed, for example, to sell usage and redemption data to the retailers.
4. Customer Support
For paid programs, customer service is crucial to customer retention. Quality programs offer very responsive customer support so employees or benefits administrators can reach out with questions (taking support off your plate).
For free programs, support is essentially nonexistent. This means the burden of learning the product and offering employee support is placed on your HR team.
5. Employee Communications
Paid employee discount programs give you — the customers — full control over any communications they have with your employees. Newsletters are very lightweight and easy to unsubscribe from. Marketing to employees is minimal and is is typically for the purpose of informing employees which perks are newly available.
It’s the opposite for free programs; employees are often bombarded with marketing materials. Emails are nearly impossible to unsubscribe from, and you have little to no power over how often the platform (and their partners) contact employees.
6. Customization
Paid programs usually allow customers to white label their programs to promote their employer brands. Companies control which discounts employees see and can add any pre-negotiated, company-specific discounts to the platform. This ensures employees have a consistent experience throughout their suite of benefits.
For free programs, customization isn’t a priority since they get most of their revenue from advertisers, not the employer or employees.
Make the Right Choice
As with any business strategy, it’s important to ask: what’s the goal of implementing an employee discount program?
Is it to boost retention? Promote employee wellness? Elevate your employer brand? Create metrics around how to track program success and then set about finding a corporate discount program that’ll help you achieve those goals.
The worst thing that could happen is to jump through hoops implementing a program that does more harm to employees than good. So do your research: investing in a quality corporate discount program will increase employee engagement, retention, and boost your company’s brand reputation to have a significant impact on its bottom line. Isn’t that something worth investing in?
