Businesses these days use a variety of different incentives and loyalty schemes in an attempt to keep their existing customers and attract new ones as well. But, with so many similar loyalty schemes in operation, a question arises: “Which features of a loyalty scheme are most effective at persuading customers to remain loyal to your company’s products and services?"
Social scientists think they may know the answer. Give people a head start. Researchers from two American universities conducted a series of ‘loyalty experiments’ that involved handing out loyalty cards to hundreds of customers at a local car wash. Customers were told that each time they visited the car wash they would get their card stamped and when they completed the card they would receive their next car wash free.
Unbeknown to the customers, though, there were two types of card. One of the loyalty cards required customers to collect eight stamps to claim their free car wash. The other half of the cards required customers to collect ten stamps. However, while customers in the second group were told they had to collect ten stamps, they were immediately given two stamps to set them on their way. In essence, the required purchases and the rewards were exactly the same in both groups. What wasn’t the same, though, was the number of customers in
each group who stayed loyal, completed the card and claimed their free car wash.
In the first group, only 19 per cent of customers made enough purchases to claim their free car wash. However, in the second group, which had been given a head start, the purchase rate rose to 34 per cent. The effect of giving customers a head start without actually reducing the required purchases almost doubled the effectiveness of the promotion. The head start also increased the speed of purchases: customers who were asked to collect ten stamps and given a head start completed the loyalty cards more quickly than those required to collect only eight stamps.
Social scientists suggest that there are two fundamental reasons why more customers from within the second group completed the task. Firstly, people are generally more willing to commit to tasks that have already started but that are incomplete than to begin a new task. This can happen even though the absolute goals in both don’t change. Secondly, the closer that an individual gets towards completing a goal, the more effort they tend to exert to get the task completed. This so-called 'endowed progress effect' should have its uses in other business areas as well, such as persuading colleagues to help with new projects, perhaps, or in employee incentive schemes.
It seems that when persuading others to say ‘Yes’ to your requests, a little head start can go a long way.
Steve Martin is co-author of Yes! 50 Secrets from the Science of Persuasion. Visit scienceofyes.com
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