{"id":33026,"date":"2024-12-07T02:00:39","date_gmt":"2024-12-07T07:00:39","guid":{"rendered":"https:\/\/beyondphilosophy.com\/?p=33026"},"modified":"2024-11-07T11:15:32","modified_gmt":"2024-11-07T16:15:32","slug":"when-is-the-right-time-to-implement-a-customer-loyalty-scheme","status":"publish","type":"post","link":"https:\/\/beyondphilosophy.com\/when-is-the-right-time-to-implement-a-customer-loyalty-scheme\/","title":{"rendered":"When Is The Right Time To Implement A Customer Loyalty Scheme?"},"content":{"rendered":"<p dir=\"ltr\">\n<!-- iframe plugin v.6.0 wordpress.org\/plugins\/iframe\/ -->\n<iframe loading=\"lazy\" title=\"Embed Player\" src=\"https:\/\/play.libsyn.com\/embed\/episode\/id\/33831152\/height\/128\/theme\/modern\/size\/standard\/thumbnail\/yes\/custom-color\/ffffff\/time-start\/00:00:00\/hide-playlist\/yes\/download\/yes\/font-color\/000000\" height=\"128\" width=\"100%\" scrolling=\"no\" allowfullscreen webkitallowfullscreen=\"true\" mozallowfullscreen=\"true\" oallowfullscreen=\"true\" msallowfullscreen=\"true\" 0=\"style=&quot;border:\" 1=\"none;&quot;&gt;&lt;\/iframe\" class=\"iframe-class\" frameborder=\"0\"><\/iframe>\n<\/p>\n<p dir=\"ltr\"><span style=\"color: #000000;\">Deborah has a\u00a0<span style=\"text-decoration: underline; color: #3366ff;\"><a style=\"color: #3366ff; text-decoration: underline;\" href=\"https:\/\/beyondphilosophy.com\/pickle\/\">pickle<\/a><\/span>. She is considering implementing a Loyalty Scheme but isn&#8217;t sure when and how to do so. She thought we could help.\u00a0<\/span><\/p>\n<p dir=\"ltr\"><span style=\"color: #000000;\">We can help. The first question, then, is easy. Now. These things work. They don&#8217;t create real loyalty, but they get people to keep buying from you, giving you more chances to earn loyalty.<\/span><\/p>\n<p dir=\"ltr\"><span style=\"color: #000000;\">It&#8217;s the second question, how, that&#8217;s a little trickier.\u00a0<\/span><\/p>\n<p dir=\"ltr\"><span style=\"color: #000000;\">Many companies create these programs to foster loyalty, but often, they work more as reward systems, encouraging repeat transactions rather than building emotional attachment.<\/span><\/p>\n<p dir=\"ltr\"><span style=\"color: #000000;\">For example, although frequent flyer points, like Delta&#8217;s SkyMiles, incentivize repeat bookings, they don&#8217;t necessarily create genuine loyalty. Loyalty, we argue, is a deeply emotional connection rather than just a series of repeat transactions.<\/span><\/p>\n<p dir=\"ltr\"><span style=\"color: #000000;\">We explore the psychological principles behind why customers participate in rewards programs and why they might hoard rewards rather than redeem them. A concept called Medium Maximization explains why people often &#8220;save&#8221; points or miles, viewing them as a bridge to future rewards and experiencing reluctance to part with them. This phenomenon works in favor of companies, as it increases customer engagement without necessarily incurring a cost.\u00a0<\/span><\/p>\n<p dir=\"ltr\"><span style=\"color: #000000;\">Additionally, the Goal Gradient Hypothesis illustrates how people accelerate their efforts toward a reward as they approach it, which is why punch-card systems, for example, are so effective.<\/span><\/p>\n<p dir=\"ltr\"><span style=\"color: #000000;\">While rewards programs have significant benefits, they can also have downsides. Complex or restrictive redemption policies can damage the <a href=\"https:\/\/beyondphilosophy.com\/customer-experience\/\">customer experience<\/a>, as can the use of extrinsic motivations that may unintentionally reduce intrinsic motivations.\u00a0<\/span><\/p>\n<p dir=\"ltr\"><span style=\"color: #000000;\">For instance, when a daycare chain imposed a fine on late pickups, late arrivals increased as parents viewed it as a trade-off rather than a rule. Companies should, therefore, be cautious about unintentionally undermining genuine, behavior-based loyalty with overly complicated or restrictive rewards systems.<\/span><\/p>\n<p dir=\"ltr\"><span style=\"color: #000000;\">In this episode, we discuss <a href=\"https:\/\/beyondphilosophy.com\/customer-experience\/customer-loyalty\/\">customer loyalty<\/a> programs&#8217; true purpose and impact. Ultimately, we recommend keeping loyalty programs simple and transparent. Avoid blackout dates or complicated redemption processes, as these can frustrate customers and reduce the program&#8217;s value. At their core, loyalty schemes are tools to encourage spending rather than create loyalty, so Deborah\u2014and you\u2014should design them with that goal in mind.<\/span><\/p>\n<p dir=\"ltr\"><strong><span style=\"color: #000000;\">Additional Takeaways to Listen for In This Episode:<\/span><\/strong><\/p>\n<ul>\n<li dir=\"ltr\" aria-level=\"1\">\n<p dir=\"ltr\" role=\"presentation\"><span style=\"color: #000000;\">How extrinsic rewards, like points, can decrease intrinsic motivation and affect customer behaviors.<\/span><\/p>\n<\/li>\n<li dir=\"ltr\" aria-level=\"1\">\n<p dir=\"ltr\" role=\"presentation\"><span style=\"color: #000000;\">The importance of aligning a rewards program with customer behavior patterns and preferences.<\/span><\/p>\n<\/li>\n<li dir=\"ltr\" aria-level=\"1\">\n<p dir=\"ltr\" role=\"presentation\"><span style=\"color: #000000;\">How Idiosyncratic Fit influences customers to engage more deeply in programs where they feel they have an advantage.<\/span><\/p>\n<\/li>\n<li dir=\"ltr\" aria-level=\"1\">\n<p dir=\"ltr\" role=\"presentation\"><span style=\"color: #000000;\">Examples of how poorly designed loyalty schemes can backfire and damage customer relationships.<\/span><\/p>\n<\/li>\n<li dir=\"ltr\" aria-level=\"1\">\n<p dir=\"ltr\" role=\"presentation\"><span style=\"color: #000000;\">The pros and cons of different reward types, like points versus cashback, and how this impacts customer satisfaction.<\/span><\/p>\n<\/li>\n<li dir=\"ltr\" aria-level=\"1\">\n<p dir=\"ltr\" role=\"presentation\"><span style=\"color: #000000;\">Understanding competitive rewards programs can help you refine your offering to stand out.<\/span><\/p>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Deborah has a\u00a0pickle. She is considering implementing a Loyalty Scheme but isn&#8217;t sure when and how to do so. She thought we could help.\u00a0 We can help. The first question, then, is easy. Now. These things work. They don&#8217;t create real loyalty, but they get people to keep buying from you, giving you more chances [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":27706,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[640],"tags":[],"class_list":["post-33026","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-podcasts"],"_links":{"self":[{"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/posts\/33026","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/comments?post=33026"}],"version-history":[{"count":2,"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/posts\/33026\/revisions"}],"predecessor-version":[{"id":33028,"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/posts\/33026\/revisions\/33028"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/media\/27706"}],"wp:attachment":[{"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/media?parent=33026"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/categories?post=33026"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/tags?post=33026"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}