“Discount bonus or financial chain? In Chile, the lowest sticker price often hides the highest long-term cost.
When I landed in Chile after living in the USA, Canada, and Mexico, I thought I understood how money worked. I was wrong. In North America, if you borrow 10 million, you owe 10 million plus fixed interest. In Chile, there is a third invisible and voracious actor: the UF (Unidad de Fomento).
The UF is not a currency; it is an index that adjusts daily with inflation. This means that in Chile, your debt grows twice: once through the bank’s interest rate and again because the base value of what you owe rises every morning (currently over $39,700 CLP). After experiencing a “financial Via Crucis” firsthand, I’ve decoded the rules of the game every resident in Chile must know.
1. The New Car Trap: Dealerships as Financial Brokers
The most radical shift is understanding that car dealerships in Chile no longer just sell cars; they sell debt.
The Bonus Lure: They offer a $2,000,000 discount if you finance. It’s not a gift. It’s an upfront loan you’ll pay back with a CAE (Total Annual Cost) of up to 45%.
The Kickback Business: Salespeople prefer you to finance because the bank pays them a commission higher than the car’s profit margin. This is why paying cash is often more expensive: the system penalizes you for not wanting to go into debt.
2. The Prepayment Labyrinth: A Right, Not a Favor
If you take the loan to get the bonus and plan to pay it off immediately, expect “operational friction.” Banks hide the “Pay in Full” button and force you into slow, face-to-face paperwork.
What you need to know: By law, prepayment is an unwaivable right. The maximum penalty is only one month’s interest on the principal. Don’t let them set up artificial barriers.
3. The Danger of “Minimum Payments” and Infinite Debt
With retail cards like Líder BCI or Falabella, the minimum payment sometimes doesn’t even cover the interest. This generates interest on interest (compound interest), causing your debt to grow even if you pay every month. It’s a spiral designed to keep you paying forever.
4. The Good News: 2026 Protections
The government has implemented key changes that few are aware of:
New Minimum Payment Rules: Institutions must now ensure the minimum payment covers 100% of the interest plus a portion of the principal.
Insolvency Law (Bankruptcy): If your debt becomes unmanageable (over 90 days late), you can access a free government procedure to renegotiate at near 0% interest rates.
My Strategy: Only use Chilean credit if you can pay the “Full Statement Balance” every month. If you have foreign cards, use them to avoid UF indexation. Knowing these tools is the difference between being a hostage to the system or a savvy user.
Reading many articles about the use of AI in different verticals, one stood out to me: the impact of AI in the Travel Industry. The top 5% to 10% in the industry, akin to the fashion world, enjoy margins far beyond the rest. However, some at this level risk losing their edge by underestimating the power of AI.
There are always those called the #Bizosaurus (Business Dinosaurus, ( “EmpreSaurios” in Spanish) who still believe that technology will eliminate the personal touch in the travel industry. However, this perspective overlooks the critical role AI plays, especially in the high-margin luxury travel sector.
AI is essential because it enables the handling of processes efficiently, accurately, and swiftly—capabilities that human resources alone cannot match, especially with the increasing number of modifications and personalized requests from customers. For the top 5% of travelers, who expect impeccable and bespoke service, AI ensures their needs are met seamlessly.
Furthermore, many goods and services in this category of clients, who are not sensitive to price elasticity, continue to dominate the best margins. These clients expect their suppliers to provide the best and fastest solutions for everything. This means that luxury travelers demand cutting-edge technology and top-tier service, which AI can deliver, ensuring a superior customer experience.
Moreover, the innovations and high-level services developed for the luxury travel market often trickle down to the rest of the industry, transforming these exclusive services into a sort of #prêtàporter for the remaining 95% who are focused on competitive pricing and shrinking margins. This is akin to the fashion industry, where top designers leverage more advanced technology than the entire prêt-à-porter sector to deliver cutting-edge creations.
In summary, AI is not just a tool for cost-saving in the travel industry but a crucial element in delivering the exceptional service that luxury travelers demand, and in turn, setting new standards for the broader market. It enables businesses to meet the high expectations of their most profitable clients, who look for speed, efficiency, and innovation from their service providers.
When an exceptional product, service, or solution fails to gain momentum, the challenge often lies in its marketing strategy. This predicament is notably prevalent across industries like food, travel, and financial services, where the competition is fierce and consumer expectations are high. The secret to overcoming this hurdle is rooted in multibenefit marketing – a comprehensive approach that showcases the various advantages your offering brings to the table.
To dissect the issue, it’s crucial to scrutinize the benefits your product or service provides. This analysis isn’t merely about listing features; it’s about understanding how these features translate into functional, symbolic, and experiential benefits for your customers. For instance, in the food industry, a product might not only offer the functional benefit of nutrition but also the symbolic benefit of sustainability and the experiential benefit of unique flavors. Similarly, travel services can highlight the practicality of hassle-free planning, the prestige of exclusive destinations, and the joy of immersive experiences. Financial services can promise the efficiency of transactions, the status of premium offerings, and the peace of mind that comes with expert advice.
If your offering is struggling to make an impact, it’s time to reevaluate your marketing approach. Are you effectively communicating how your product or service meets various customer needs and desires? By emphasizing the multifaceted benefits, you can appeal to a broader audience and enhance your product’s attractiveness. This strategy not only distinguishes your offering from competitors but also addresses the diverse motivations behind customer choices, increasing your likelihood of success.
In essence, if you find your groundbreaking product, service, or solution languishing in obscurity, consider whether your marketing effectively highlights its multiple benefits. This approach could be the catalyst you need to capture the attention and hearts of potential customers, propelling your offering to the success it truly deserves.
So how you got here?
Many will tell you that if you build an amazing product it will sell by itself, but many companies have found that it requires not just an amazing product but then the effort of the Marketing Team to position that product, specifically, tangible, in several categories. During my time as head of Marketing in several industries from Food, Technology and Financial Services, I always used a rule for those programs and assigning spending to it, even before you can think on what media, where , etc.. you have to make sure you define this 3 benefits :
– Functional Benefits: Practical advantages like time-saving, cost reduction, or problem-solving. For instance, a car’s good mileage or a software’s user-friendly interface.
– Symbolic Benefits: The status or identity the product confers on its owner, making them feel successful, eco-friendly, or part of an exclusive group. Examples are the elegance of an Apple product or Patagonia’s eco-conscious image.
– Experiential Benefits: The feelings or sensations experienced during use, such as joy, comfort, or nostalgia. Disneyland’s immersive entertainment and the comforting aroma of cinnamon rolls are prime examples.
EVEN MORE NOW
In today’s competitive market, successful brands understand that effective marketing transcends mere product promotion. It involves a holistic approach that encompasses multiple types of benefits to resonate deeply with consumers.
This strategy is not confined to any single industry but is applicable across various sectors, including Food, Travel, and Financial Services. I have been involved in those three, so my take of how it will look my definition of targeting.
Food Industry: Take, for example, a gourmet restaurant that sources its ingredients locally. The functional benefits here include the freshness and quality of the food. Symbolically, it communicates a commitment to community support and environmental sustainability, enhancing the diner’s perception of contributing to a greater cause. The experiential benefit comes from the unique dining experience, where the story of each dish adds to the overall enjoyment and satisfaction of the meal. This multifaceted approach not only attracts customers looking for a high-quality meal but also those who value environmental sustainability and community support.
Travel Industry: In the travel sector, a luxury tour operator might offer packages to exotic destinations. The functional benefits include comprehensive travel planning, comfortable accommodations, and personalized itineraries. On a symbolic level, it conveys a sense of exclusivity and achievement, appealing to the traveler’s desire for prestige and social status. The experiential benefits are found in the immersive experiences offered, from private tours of hidden gems to exclusive access events, providing travelers with memories that last a lifetime. This blend of benefits appeals to a wide range of travelers, from those seeking convenience and comfort to those desiring unique and enriching experiences.
Financial Services: A wealth management firm provides another excellent example. Functionally, it offers sound financial advice and investment strategies. Symbolically, being a client of a reputed firm can signify financial success and security. The experiential benefit comes from the personalized service and the sense of confidence and peace of mind that comes from knowing one’s financial future is in good hands. This combination of benefits attracts clients not just for the financial expertise but for the prestige and personalized experience as well.
The most effective marketing strategies are those that offer a blend of functional, symbolic, and experiential benefits. By appealing to a broad spectrum of consumer needs and desires, brands can differentiate themselves in a crowded marketplace. Whether it’s the food we eat, the places we travel, or the way we manage our finances, the value of a product or service is greatly enhanced when it’s marketed through a multi-faceted lens. As businesses continue to evolve, so too will the art of marketing, always with the goal of creating deeper connections with consumers.
