Increasing customer motivation through loyalty programmes

customer

You can help to create customer loyalty by offering discounts and incentives. There are lots of programmes out there. Nectar and other programmes are worth considering. Or you can do it yourself. You can start by offering discount vouchers or a card you stamp each time a customer places an order .

The key is to make it easy for the customer. Have a simple process such as a card they can keep in a purse or wallet, with clear instructions on how to claim. Don’t forget to make it clear what benefit they will get for their loyalty.

And there is one more thing…..

There are many academic studies and research about loyalty programmes. I came across this example which shows how one element of a loyalty programme can make a huge difference:

“The Endowed Progress Effect” by Joseph Nunes and Xavier Dreze  looked at customer effort.

The researchers gave 300 loyalty cards to customers at a local car wash. All the customers had their card stamped for each car wash. Everyone got a free car wash for every complete card.

Customers didn’t know, but there were 2 types of card.

The first group received a loyalty card that had eight spaces to stamp before they got a free carwash.

The second group received a loyalty card that had ten spaces, with 2 already stamped.

Each group needed 8 stamps to get a free car wash, so you would expect similar results from each. Only 17% of customers in the first group made enough visits to complete their card. 34% of the second group (the ones given a head start) came back enough times to finish their loyalty cards.

Nunes and Dreze say that customers were more motivated to complete the second card because it was part completed. Other studies show that, the closer people get to completing a goal, the more effort they make.

Both cards in this car wash programme required the same amount of effort by customers. But the mental block of getting started didn’t exist in the second card, so more customers were able to complete it.

 

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