Arithmetic is Useful in the Real World

I was momentarily excited to learn about a program called “Audience Rewards” – a loyalty program for Broadway shows.  Earn points for buying Broadway tickets, then redeem them for free seats or other items.  Sounds great, right?  Let’s look at the numbers.

Members earn two points per dollar spent on regular tickets (i.e., neither discounted nor premium).  Most orchestra seats cost about $112.  That’s 224 points per ticket – more on some nights of the week, or for some pricier shows.

To get a free seat, priced anywhere from $65 to $125, members must redeem a whopping 17,000 points!  That includes not only center orchestra seats at $112, but also the cheapest available rear mezzanine seat for Avenue Q on a Tuesday night, at $66.50.  Let’s review.  I’d have to spend $8,500 on at least 66 tickets just to earn a single free seat – a return of as little as 0.78% (or at most 1.4% on a $125 seat).

My credit card offers about 1.8% cash back, so that may seem about right, but I earn points with my credit card on every purchase every day.  I can earn points quickly, and cash in small amounts if I want – 4,500 points is a typical $50 gift card.  A better model for Audience Rewards to follow would be airlines’ frequent flyer programs.  Let’s take a look.

Airtran’s A+ Rewards program gives a free one-way trip after buying eight one-way tickets.  Bolt Bus offers exactly the same terms for bus rides.  That’s a return of one eighth or 12.5% – over 15 times better than what Audience Rewards has to offer!  On Delta, six round-trip flights to Denver (about 4,200 miles, depending on the route) earn a free round-trip ticket.  Now we’re up to a 16.6% return.

And we can do better than that.  My math there assumes that all airline tickets are priced equally.  In reality, an A+ Rewards member could easily buy eight $59 tickets and redeem a free $230 seat – a return of a whopping 48.7%.

Audience Rewards, you’ve really missed the mark.  I’d have to buy a $112 ticket to a Broadway show every week for 1.5 years to earn a single measly free seat!  And we all know I couldn’t cash in points for a just a free ticket anyway – I’d save up my $9,550 investment in tickets to get a free Spring Awakening poster. I could buy one now for $20, but it just wouldn’t be as rewarding.