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Encouraging customers to join loyalty schemes
We are all familiar with loyalty schemes and collectables - from air miles through to the stamps that you collect to gain a free cup of coffee or £5 off a haircut. But did you know that you can also encourage and increase customer take-up of these schemes by giving them a bonus that will encourage them by getting them started?
Stamp it out!
In one test, loyalty cards were handed out to 300 customers at a local car wash. They had to collect stamps and then exchange a set (which might be eight or ten stamps) to receive a free car wash in return. In a split sample, half of the customers were given a card that required eight stamps. The other half were given a card which required ten stamps, but two of these were already provided.
During the test period, 19% of the first sample saved enough stamps for a free car wash, compared with 34% for the ten-stamp, head-start group. Furthermore, the frequency of car washes was higher for the second group, so they reached their goal more quickly.
The psychologists’ view is that people are more motivated to complete something that has already been started, rather than having to start something from scratch. This principle has obvious applications when designing loyalty promotions, but it also has parallels in day-to-day business life.
Try it out…
So how could it apply, say, when you’re seeking input on a task or project?
- It can really help if you’re able to point out how a colleague has already done some work on the task, or that you’ve already made significant progress.
- You could emphasise its similarities with the previous project - and therefore reinforce the fact that some of the groundwork is already in place.
- If you have a team target to reach, it helps if you can emphasise that you’re already well on your way to achieving it, rather than having to start from the baseline.
So there is a clear message here: people can often be encouraged to engage in a task or programme if they feel that they are already making progress towards its completion.
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