Coffee, Loyalty And Motivation?
How many coffee shop loyalty cards do you have? (If you have more than one, you may wish to consult a dictionary for the meaning of the word ‘loyalty.’) Do they all operate the same way? Think about all the old-fashioned loyalty cards you’ve seen. Not the new electronic point-collecting plastic cards with magnetic strips or microchips. Think of the timeless dog-earred cardboard ones with ten squares or cups or whatever and purchases earned a stamp or a holepunch. At some delicious and delirious future time, you get that tenth stamp and the next cup is FREE!!! It’s like Christmas but without the immense tension, family drama and homicidal / suicidal thoughts.
Did those cards affect your behaviour? Did they drive your decision-making? In what ways? Which type of cards were most successful – for the cafe? The whole point of those things, one would presume, was to increase profit in the long run for the cafe. They’re not giving you free coffee because you’re awesome. (This is no way belittles your actual level of awesomeness.)
In 2006, a study was done at a carwash contrasting two different approaches to loyalty cards. Half the cards were normal ‘get eight stamps, get one free’ cards. The other half were the same except that the card needed TEN stamps but the first two stamps had already been given. For that second group of cards, the first purchase was, in effect, the THIRD stamp.For the business, the cost was the same for both types of card – the customer still needed to buy eight carwashes.
And this had what impact?
19% of the first group of cards got redeemed up to the tenth and final stamp thus rewarding the customer their freebie. And how did the second group of cards go? 34%! Almost double. AND they filled their cards quicker AND as they got closer to completing their card, the gaps between carwashes diminished. The closer they got to their ‘goal’, the more active they appeared to be pursuing it.
That’s interesting in and of itself if you’re running a business and considering implementing a loyalty card. That’s not what I’m writing about though. This is just a demonstration of a good old predictable human trait called ‘Endowed Progress.’ People are more likely to progress towards a goal if they perceive that they have already made progress towards it.
How can we help others move towards their work and life goals leveraging the endowed progress effect? Weight loss or a promotion are common goals. Although both would be better expressed using something like the SMART model. (Specific, measurable, attainable, relevant and timebound. “Lose 10kg in 3 months etc”) Somehow we / they need to give themselves credit for the progress they’ve already made before they officially start. The weight loss or getting promoted equivalent of two free stamps.
Conversely, people can experience negative effects with endowed progress. Ever waited for a bus? The bus is late. The bus is later still. Maybe the bus isn’t coming at all? Again, research indicates that the more time we invest in waiting for something, the more irrationally attached we become to continue waiting. (That said, you just know that the moment you walk just far enough away, the bus will come around the corner… psych!!)
Posted on September 22, 2011, in Behaviour, Employee Engagement, Endowed Progress, Feedback, Influence, Motivation and tagged Behaviour, Coffee, endowed progress, Influence, loyalty, motivation. Bookmark the permalink. Leave a comment.