Give people more status when they achieve certain (company-serving) goals. This trains them to keep coming back for more.
- Airline loyalty programs give frequent flyers perks after they’ve traveled a certain number of miles with the company. The promise of those perks trains the traveler to book with their “loyalty” airline. The habit becomes ingrained so that travelers end up going with the familiar airline even if the price is marginally higher.
Loyalty programs need to seem enticing right from the beginning, so it’s important to “prime” an account. Joseph Nunes and Xavier Dreze ran experiments which determined that coffee or car wash loyalty cards were more likely to be redeemed if they were given to customers with 10 purchases required of which two were already clipped than if they were just a straight 8 cups required.
Mileage plans and awards-based credit cards work the same way by giving a signing bonus, for instance by adding a large number of awards upon opening a credit card account. Bagchi and Li found that it’s also better to give people large numbers of points, even if the goal is equally distant. Offering ten points per dollar, with 1000 points needed works better than offering one point per dollar, with 100 points needed because as they get closer, people see a bigger progression towards their goal.
How to use this pattern
- Focus users’ attention on how many points they’ve gained, not how many they need for a reward.
- Help people on the way to achieving by priming their account to start with.
- Ensure that people can relate to the longer-term end goal they get with the awards system. Remind them constantly of the benefits that accrue with awards.
- Set and control the exchange rate so that people find it sufficiently valuable to stay with the program despite cheaper alternatives.
- If you offer several different types of achievement, tracking the popular achievements may give you an indication of which types of status are important to your audience, allowing you to make future offerings more attractive.