Loyalty

Status

We constantly look for ways to improve how others see us

150  students completed a simple task and were split into two groups and given either positive or negative feedback on their performance. They were then shown either a one-off print or a mass-produced one and asked how much they’d pay for it.

Those given negative feedback were willing to pay almost 4x more on average for the unique print than those with positive feedback, showing how we use consumption to heal our sense of status.

There are multiple ways to elevate brand status:

‍Form strategic alliances with successful others with whom you share compatible goals (Thorndike, 1920), e.g. Go-Pro and Red Bull.

Develop your core purpose to raise your products’ perceived value (Chernev & Blair, 2015), e.g. Patagonia who “use business to inspire and implement solutions to the environmental crisis.” 

Create and control new ways of promoting industry excellence. Dribbble, a platform for design teams to show off their work provides paid-for "Pro Business" status badges to distinguish the best from the rest.

Invest in a tiered loyalty scheme to elevate consumers’ status & brand attachment (Nunes & Dréze, 2006), e.g. British Airways Executive Club.

Reciprocity

We’re hardwired to return kindness received

407 pedestrians in Brittany, France were approached by a young woman and asked to complete a survey. Before the request, half were offered candy and the other half were not.

The results found that people - especially women - were far more likely to reciprocate and answer the survey after receiving a gift than when not.

Act first.‍

Find ways to initiate reciprocity with consumers.  Merely asking those satisfied to go tell their friends will work (Söderlund et al., 2015).

Make it a ‘common habit’.

When we’re told that a behavior is a social norm shared by others, we’re more likely to reciprocate. Households in USA and India consume significantly less electricity when told that their neighbors are consuming less (Sudarshan, 2014). In the long-term, any consistent, successful behaviors will be adopted as the default for others.

Do it in person.

Reciprocation appears to be more powerful when requests from strangers are made face to face rather than online. This is due to the persuasive impact of immediacy that physicality affords, the higher levels of digital suspicion and the sheer number of emails people receive (Meier, 2016).

Endowed Progress Effect

We reach our goals faster when we have help getting started

300 customers at a car wash were split into two groups and given one of two different loyalty cards for a free wash upon completion: either one with space for 8 stamps or one for 10 (with 2 spaces pre-stamped).

Despite both cards requiring the same amount of effort, completion of the non-pre-stamped 8 card over a 9-month period was only 19% whereas the pre-stamped 10-card was 34%.

Get them started. Endow progress with a fraction of points, stars or a brand-specific measure. Make sure you endow enough to motivate use, aiming for between 10-25% of the total effort required for the first reward.  As well as helping with initial effort, make the reward itself substantial and meaningful to assist habit-forming.

Never endow at the end. The closer we are to a goal, the more we value our own internal efforts to complete it. Doing so on their behalf will devalue existing effort, perceived reward value and reduce loyalty strength.

Make it seamless. In Christmas 2013, 1 in 8 Americans got a Starbucks Gift Card. On redemption they were automatically endowed with progress in the form of loyalty stars, creating 1.5m new loyalty members as a result. How can you seamlessly channel gift customers through to your loyalty scheme?

Rewards

We change our behavior when given gifts that reinforce actions and goals

58 households in Philadelphia, Pennsylvania had their fruit and veg shopping monitored for 8 weeks. Half were offered a 50% discount reward on all fruit and veg purchased and half were not.

Results showed that the reward increased healthy food purchasing behavior from 6.4 to 16.7 servings of fruit and veg  on average per week per household.

Rewards come in two types: Extrinsic and Intrinsic. 

‍Extrinsic rewards are economic: pay, discounts, working conditions, gold stars, healthcare, promotions etc. 

Intrinsic rewards are emotional, coming from a sense of achievement through skill and hard work, unplanned verbal praise from authority figures, and peer recognition.

Too much extrinsic will lessen internal motivation as it’s seen as controlling, especially if they’re later removed (Murayama et al., 2010). Ensure that they’re significant enough to motivate against task boredom (Hidi, 2015) and are in line with the market needs of employees / customers.

Focus on rewarding intrinsically - seen as a superior reward (Deci et al., 1999) - with greater levels of trust, choice and freedom to make one’s own decisions. You’ll be rewarded with a more motivated, loyal following as a result.

Limited Access

We place greater value in things when there are barriers placed around them

310 US Amazon Prime customers were split into 2 groups, either on a free trial or on a paid membership. They were then queried about attitudes towards and value perceptions of Prime and its benefits.

Those on the paid subscription reported greater loyalty, perceived value and exhibited a higher monthly spend than those who were on the free trial.

This is driven by two core effects:

1) Sunk Cost Bias where we seek to justify past, non-recoverable costs (of membership access) with our current actions (more spending), even when it’s not in our best interests. 

2) A desire to remain consistent with our past commitments - “I’m a Prime customer now.” 

Create a members club. Putting a price on entry heightens our analysis of the benefits of joining in a way that we wouldn’t if it were free. Limiting access to certain products or benefits can signal higher perceived quality (Zeithaml, 1998) and an increased willingness to buy.

Amazon entice with convenience (‘free’ one-day shipping), priority (30-min Early Access Lightning Deals) and exclusive choice (a vast music, video and book library). What benefits would your own customers pay for? What feelings can gaining access promote?

Tiny Habits

We're more likely to reach goals when broken down into smaller ones

96 women were given fitness trackers and asked to either walk 10,000 steps per day or walk a bit more each day than the average of their own last 9 days. This equated to a lower number of steps than the 10,000 group but had the benefit of adapting to each person’s own step count.

Results showed that over 4 months, those with a smaller, adaptive goal walked far more than the 10,000 group.

Start very small.

‍We’re time and attention-poor, wanting results now. As one step up from Endowed Progress, what is the smallest, valuable task you can design for that affords a fast, positive Feedback Loop?

To increase long-term success, Tiny Habits creator BJ Fogg suggests using an existing behavior to trigger a new one by 'chaining' new tiny behaviors onto existing habits. 

Keep the bigger goal front of mind.

‍People who’d completed a small exercise task were less likely to eat healthy food after, due to a short-term feeling of success (Fishbach et al., 2006). However, prompting a reminder of the larger Goal Prime of becoming fit removed this problem.

Time the reminder after tiny task success.

Make it adaptive.

‍A system that flexes with our fluctuating capacity (i.e. time or energy) will always work best. Understand users’ habitual patterns & weak points and design empathic experiences around these. 

Goal Gradient Effect

Our efforts increase the closer we are to task completion

172 people were told of a fundraiser called Sheila who needed to sell 100 candy bars for her sports team and told she had to sell either 1 or 21 more bars to meet her quota. They were then asked how likely they were to buy a candy from her.

Those in the almost-complete task state were far more likely to help than when there were many left.

Visualize to motivate.

‍Showing quantifiable task progress  with a visual and numerical indicator will increase completion speed (Cheema & Bagchi, 2011).  

How can you heighten desire to close in on the reward?

Note that effort levels will fall after the current reward has been attained, so reframe progress around the next goal.

Be ahead of the curve. 

‍Endow Progress and put more weight on task completion at the start than when close to the goal. 

Place easier tasks at start and middle, saving harder or bigger ones for just before reward.

Reframe task size.

‍Motivation to complete a task is directly proportionate to its size. So, for viewers new to Breaking Bad, instead of Netflix initially highlighting all 5 seasons, reframe the task as a single season with a sense of completion.

Once season 1 is watched, reframe season 2 as a natural extension of 1 but distinct from 3-5.

Reciprocity Decay

Our desire to give back wanes rapidly with time

18,515 patients who had been admitted to a university hospital were subsequently mailed a request to donate to the hospital charity.

The researchers found that requests delayed by about 30 days after each patient’s visit reduced the donation rate by 30%, falling ever further as the delay increased.

Timing is everything.

‍There is a ‘goldilocks’ window of time within which kind acts will most likely be reciprocated:

• Not too quick: diners asked to review their experience when paying the bill should instead be prompted the next day and not at the table.
• And not too slow: try recalling a meal you had 3 months ago…

A small delay? Ask for less.

‍If you've waited too long for a reciprocal favor in return, make it easier. Provide a subtle reference to your past act of kindness, but instead of asking for a donation, ask for a share, perhaps combining with a Reward.

A large delay? Start afresh.

‍Life goes on and we quickly forget others' kindness, so for extreme delays, expect no response. Instead, create a Fresh Start with an easy re-entry to reciprocity: a new seasonal menu tasting invite for a restaurant, for instance. After the event, follow up with your request. It will likely be granted, such is our internal desire to rebalance things.

Entourage Effect

Our status is elevated when we share our VIP treatment

54 American football fans were offered the chance to watch their team from a luxury suite for the game and, if present, could bring along a friend (i.e. an entourage) for the experience. 17 had a friend to bring, but 37 didn’t. After, all fans were asked about their feelings of status.

Results showed those sharing the experience with friends rated their status much higher than those who were alone.

Permit guests to enhance status.

‍If you wish to make a VIP feel truly special,  grant them the ability to share some, if not all, of their benefits with their friends. Doing so will create a powerful sense of social prestige for the VIP that far exceeds the joy felt from the scarcity of their benefits.

See the VIP as a group, not a person. 

‍What group-specific social benefits can you provide in your programme?  

Also make sure that the VIP understands that they are the gatekeeper to such benefits and the entourage is clearly subordinate with Access contingent on the VIP’s presence.

Communicate the rules up front.

‍When granting special group benefits to a VIP, there may be times when this special social contract is broken. Therefore, it's key to respectfully state your rules with justification beforehand (Habel et al., 2017). This will highlight the two-way, trust-based nature of the relationship and remind the VIP (and group) how to behave to keep their elevated Status. 

Pairings

Loyalty

+

+

Trigger the craving for completion by releasing something to collect

We’re prone to turning ordinary objects into extensive, never-ending collections with no practical use other than our own self-satisfaction. But unlike an unlimited collection of random things, collecting limited sets activates a strong sense of incompleteness and a craving for completion.

Those low-key uncomfortable fragmentary sensations we have whilst our collection is yet to have that satisfying feeling of wholeness haunts us until its conclusion. The missing items are not simply names tacked on a sheet but prey that must be hunted down, triggering a primitive gathering impulse.

Niantic and Nintendo artfully used the full potential of this pairing with their famous game Pokémon Go. Amid all the chaos of modern city life, we are now used to watching people glued to their cell phones, walking in an alternate universe, oblivious to what’s happening around them, just to catch one more Pokémon and advance one more step to complete the collection.  

Rarity chart for Pokémon Go

‍

A hard-won collection of Pocket Monsters


The game’s slogan says it impeccably: “Gotta Catch 'Em All”. It’s a perfect slogan that elicits the powerful combination of the Zeigarnik Effect with the Collection Bias: we want to complete our collection since its incompleteness weighs on our minds until done. 

They offered additional, skilful challenges to collect sets of Pokémon during certain events, which awarded different rewards and medals. We can use this pairing for the sake of completeness, but there can also be a Reward and the associated Status with more challenging sets. Some Pokémon are even restricted by region so you’d literally have to travel to Japan to unlock certain monsters.

By releasing a set of widgets to collect, there’s an impulse to do it, even with nearly useless rewards such as a digital badge, because the psychological mechanism of passionate possessiveness is different from regular consumption. It has other, higher level motivations as it involves hunting, searching and gathering in a continuing quest for a sense of closure.

Loyalty

+

+

Give what is otherwise hard to come by

When rewarding behaviour, consider gifts that are rare or cannot be attained by any other means. For example, consider manufacturing a product that can only be attained by those on the highest tiers of your loyalty programme. Or, an invitation to special event that only happens once a year.

Where can you provide a scarce reward to make people feel valued? Remember, scarce needn't mean expensive, just restricted in public supply.

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Loyalty

Status

We constantly look for ways to improve how others see us

150  students completed a simple task and were split into two groups and given either positive or negative feedback on their performance. They were then shown either a one-off print or a mass-produced one and asked how much they’d pay for it.

Those given negative feedback were willing to pay almost 4x more on average for the unique print than those with positive feedback, showing how we use consumption to heal our sense of status.

There are multiple ways to elevate brand status:

‍Form strategic alliances with successful others with whom you share compatible goals (Thorndike, 1920), e.g. Go-Pro and Red Bull.

Develop your core purpose to raise your products’ perceived value (Chernev & Blair, 2015), e.g. Patagonia who “use business to inspire and implement solutions to the environmental crisis.” 

Create and control new ways of promoting industry excellence. Dribbble, a platform for design teams to show off their work provides paid-for "Pro Business" status badges to distinguish the best from the rest.

Invest in a tiered loyalty scheme to elevate consumers’ status & brand attachment (Nunes & Dréze, 2006), e.g. British Airways Executive Club.

Reciprocity

We’re hardwired to return kindness received

407 pedestrians in Brittany, France were approached by a young woman and asked to complete a survey. Before the request, half were offered candy and the other half were not.

The results found that people - especially women - were far more likely to reciprocate and answer the survey after receiving a gift than when not.

Act first.‍

Find ways to initiate reciprocity with consumers.  Merely asking those satisfied to go tell their friends will work (Söderlund et al., 2015).

Make it a ‘common habit’.

When we’re told that a behavior is a social norm shared by others, we’re more likely to reciprocate. Households in USA and India consume significantly less electricity when told that their neighbors are consuming less (Sudarshan, 2014). In the long-term, any consistent, successful behaviors will be adopted as the default for others.

Do it in person.

Reciprocation appears to be more powerful when requests from strangers are made face to face rather than online. This is due to the persuasive impact of immediacy that physicality affords, the higher levels of digital suspicion and the sheer number of emails people receive (Meier, 2016).

Endowed Progress Effect

We reach our goals faster when we have help getting started

300 customers at a car wash were split into two groups and given one of two different loyalty cards for a free wash upon completion: either one with space for 8 stamps or one for 10 (with 2 spaces pre-stamped).

Despite both cards requiring the same amount of effort, completion of the non-pre-stamped 8 card over a 9-month period was only 19% whereas the pre-stamped 10-card was 34%.

Get them started. Endow progress with a fraction of points, stars or a brand-specific measure. Make sure you endow enough to motivate use, aiming for between 10-25% of the total effort required for the first reward.  As well as helping with initial effort, make the reward itself substantial and meaningful to assist habit-forming.

Never endow at the end. The closer we are to a goal, the more we value our own internal efforts to complete it. Doing so on their behalf will devalue existing effort, perceived reward value and reduce loyalty strength.

Make it seamless. In Christmas 2013, 1 in 8 Americans got a Starbucks Gift Card. On redemption they were automatically endowed with progress in the form of loyalty stars, creating 1.5m new loyalty members as a result. How can you seamlessly channel gift customers through to your loyalty scheme?

Rewards

We change our behavior when given gifts that reinforce actions and goals

58 households in Philadelphia, Pennsylvania had their fruit and veg shopping monitored for 8 weeks. Half were offered a 50% discount reward on all fruit and veg purchased and half were not.

Results showed that the reward increased healthy food purchasing behavior from 6.4 to 16.7 servings of fruit and veg  on average per week per household.

Rewards come in two types: Extrinsic and Intrinsic. 

‍Extrinsic rewards are economic: pay, discounts, working conditions, gold stars, healthcare, promotions etc. 

Intrinsic rewards are emotional, coming from a sense of achievement through skill and hard work, unplanned verbal praise from authority figures, and peer recognition.

Too much extrinsic will lessen internal motivation as it’s seen as controlling, especially if they’re later removed (Murayama et al., 2010). Ensure that they’re significant enough to motivate against task boredom (Hidi, 2015) and are in line with the market needs of employees / customers.

Focus on rewarding intrinsically - seen as a superior reward (Deci et al., 1999) - with greater levels of trust, choice and freedom to make one’s own decisions. You’ll be rewarded with a more motivated, loyal following as a result.

Limited Access

We place greater value in things when there are barriers placed around them

310 US Amazon Prime customers were split into 2 groups, either on a free trial or on a paid membership. They were then queried about attitudes towards and value perceptions of Prime and its benefits.

Those on the paid subscription reported greater loyalty, perceived value and exhibited a higher monthly spend than those who were on the free trial.

This is driven by two core effects:

1) Sunk Cost Bias where we seek to justify past, non-recoverable costs (of membership access) with our current actions (more spending), even when it’s not in our best interests. 

2) A desire to remain consistent with our past commitments - “I’m a Prime customer now.” 

Create a members club. Putting a price on entry heightens our analysis of the benefits of joining in a way that we wouldn’t if it were free. Limiting access to certain products or benefits can signal higher perceived quality (Zeithaml, 1998) and an increased willingness to buy.

Amazon entice with convenience (‘free’ one-day shipping), priority (30-min Early Access Lightning Deals) and exclusive choice (a vast music, video and book library). What benefits would your own customers pay for? What feelings can gaining access promote?

Tiny Habits

We're more likely to reach goals when broken down into smaller ones

96 women were given fitness trackers and asked to either walk 10,000 steps per day or walk a bit more each day than the average of their own last 9 days. This equated to a lower number of steps than the 10,000 group but had the benefit of adapting to each person’s own step count.

Results showed that over 4 months, those with a smaller, adaptive goal walked far more than the 10,000 group.

Start very small.

‍We’re time and attention-poor, wanting results now. As one step up from Endowed Progress, what is the smallest, valuable task you can design for that affords a fast, positive Feedback Loop?

To increase long-term success, Tiny Habits creator BJ Fogg suggests using an existing behavior to trigger a new one by 'chaining' new tiny behaviors onto existing habits. 

Keep the bigger goal front of mind.

‍People who’d completed a small exercise task were less likely to eat healthy food after, due to a short-term feeling of success (Fishbach et al., 2006). However, prompting a reminder of the larger Goal Prime of becoming fit removed this problem.

Time the reminder after tiny task success.

Make it adaptive.

‍A system that flexes with our fluctuating capacity (i.e. time or energy) will always work best. Understand users’ habitual patterns & weak points and design empathic experiences around these. 

Goal Gradient Effect

Our efforts increase the closer we are to task completion

172 people were told of a fundraiser called Sheila who needed to sell 100 candy bars for her sports team and told she had to sell either 1 or 21 more bars to meet her quota. They were then asked how likely they were to buy a candy from her.

Those in the almost-complete task state were far more likely to help than when there were many left.

Visualize to motivate.

‍Showing quantifiable task progress  with a visual and numerical indicator will increase completion speed (Cheema & Bagchi, 2011).  

How can you heighten desire to close in on the reward?

Note that effort levels will fall after the current reward has been attained, so reframe progress around the next goal.

Be ahead of the curve. 

‍Endow Progress and put more weight on task completion at the start than when close to the goal. 

Place easier tasks at start and middle, saving harder or bigger ones for just before reward.

Reframe task size.

‍Motivation to complete a task is directly proportionate to its size. So, for viewers new to Breaking Bad, instead of Netflix initially highlighting all 5 seasons, reframe the task as a single season with a sense of completion.

Once season 1 is watched, reframe season 2 as a natural extension of 1 but distinct from 3-5.

Reciprocity Decay

Our desire to give back wanes rapidly with time

18,515 patients who had been admitted to a university hospital were subsequently mailed a request to donate to the hospital charity.

The researchers found that requests delayed by about 30 days after each patient’s visit reduced the donation rate by 30%, falling ever further as the delay increased.

Timing is everything.

‍There is a ‘goldilocks’ window of time within which kind acts will most likely be reciprocated:

• Not too quick: diners asked to review their experience when paying the bill should instead be prompted the next day and not at the table.
• And not too slow: try recalling a meal you had 3 months ago…

A small delay? Ask for less.

‍If you've waited too long for a reciprocal favor in return, make it easier. Provide a subtle reference to your past act of kindness, but instead of asking for a donation, ask for a share, perhaps combining with a Reward.

A large delay? Start afresh.

‍Life goes on and we quickly forget others' kindness, so for extreme delays, expect no response. Instead, create a Fresh Start with an easy re-entry to reciprocity: a new seasonal menu tasting invite for a restaurant, for instance. After the event, follow up with your request. It will likely be granted, such is our internal desire to rebalance things.

Entourage Effect

Our status is elevated when we share our VIP treatment

54 American football fans were offered the chance to watch their team from a luxury suite for the game and, if present, could bring along a friend (i.e. an entourage) for the experience. 17 had a friend to bring, but 37 didn’t. After, all fans were asked about their feelings of status.

Results showed those sharing the experience with friends rated their status much higher than those who were alone.

Permit guests to enhance status.

‍If you wish to make a VIP feel truly special,  grant them the ability to share some, if not all, of their benefits with their friends. Doing so will create a powerful sense of social prestige for the VIP that far exceeds the joy felt from the scarcity of their benefits.

See the VIP as a group, not a person. 

‍What group-specific social benefits can you provide in your programme?  

Also make sure that the VIP understands that they are the gatekeeper to such benefits and the entourage is clearly subordinate with Access contingent on the VIP’s presence.

Communicate the rules up front.

‍When granting special group benefits to a VIP, there may be times when this special social contract is broken. Therefore, it's key to respectfully state your rules with justification beforehand (Habel et al., 2017). This will highlight the two-way, trust-based nature of the relationship and remind the VIP (and group) how to behave to keep their elevated Status.