Raise your hand if you have a wallet bursting with so-called “customer loyalty” cards. You likely have one for each supermarket, your favourite coffee chain, and maybe for the bookstore. With some brands upgrading to an app, you probably also have a smartphone screen full of their colourful icons. But how often do those loyalty schemes actually influence you to make a purchase? More importantly, do they keep you loyal to the brand?
The problem with most loyalty programmes is that they’re better categorised as rewards programmes. These are built around the concept of extrinsic incentives or, more simply, the external reasons or rewards that motivate the buyer. For example, a shopper would collect points for making a purchase and then receive a discount the next time they shop.
Businesses and marketers alike employ extrinsic incentives because they’re easy to quantify. But they’re expensive (someone has to pay for that free coffee, after all). Conversely, intrinsic incentives are cheaper to maintain, but harder to grasp – because they boost individual satisfaction and feelings such as a sense of belonging, or creative expression, for the customer.
Developing intrinsic incentives or motivation requires more effort, but it’s worth it. Appealing to these internal forces can help businesses connect with people on a far deeper level, and earn their trust and loyalty for years to come.
This all sounds great, but you could well ask how it’s actually possible to achieve.
At a most basic level, it’s about creating that feeling you get when you walk into your local pub and they know your name, or when you visit your favourite coffee shop and they remember your order. These actions tap into our feelings of belonging, which is an intrinsic motivation.
The difficulty then, is how to harness this when most of our shopping has shifted online, and to deploy it on a larger scale.
One example is digital platforms like iMessage, Snapchat and even work-oriented apps like Slack and Gmail allowing for creativity and self expression by integrating secondary social media app Bitmoji, which allows people to create cartoon avatars. The avatars can then become comics, GIFs, expressions and reactions that can be used when communicating on these platforms.
Traditionally websites have been about one-way communication only, although this is now changing with chatbots becoming more widespread, but examples of interactive web based platforms (beyond e-commerce of course) that allow for more interaction are only now starting to emerge. We also need to find ways to do this that hook in both extrinsic and intrinsic motivators, hopefully in a way that is largely positive.
Companies can also tap into your darker emotions, using intrinsic incentives in a negative way. For example, some users are deleting their Facebook profiles in favour of cooler or newer social networks. To encourage them to stay, every so often Facebook “gifts” users those “celebrate your nine-year friendship anniversary with John Smith” posts, compiling all those together moments. Yes, this might tap into some positive emotions and memories, but it also triggers the fear of missing out: if you leave Facebook now, all those photos, messages and status updates connecting you will be gone forever. So you keep your Facebook account for another day.
One thing that the pandemic and the massive shift to online shopping has shown us is that consumers don’t really care where their stuff comes from. It’s just about where it’s cheapest, and who will deliver soonest. The exception is when we have the opportunity to support a small business, which plays into our emotions of empathy and community, an intrinsic incentive.
In order to survive the pandemic and beyond it, having customers come back for more is incredibly important. For a company that wants to start creating true customer loyalty, increasing intrinsic incentives almost universally creates stronger relationship bonds when it comes to loyalty and advocacy.
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Thank you for this amazing article
I guess this is the new normal.
I remember trying to sell websites to guys who would claim to never need one before Covid.
They are all gone now.
All brick and mortar business needs to think seriously about getting online.
As it’s always been survival of the fittest. Thats why I wrote about it.
I think more people need to read it.