small business customer loyalty

How the Science of Goal Gradient Drives Customer Loyalty

The goal of any rewards program is to increase customer visits and spend while simultaneously strengthening brand loyalty. At Belly, we spend a lot of time helping our Merchants create rewards programs their customers actually want to join. We think about things like:

  • What mix of monetary and experiential rewards drive the most repeat visits for your business?
  • What is the best way to keep customers engaged in your loyalty program?
  • How can we help Merchants drive more frequent customer visits?

Researchers before us were curious too. A study that originated out of Columbia in 1934 and was resurrected in 2006 proved that moving customers toward a reward quickly will keep them engaged and loyal to your business.

Marketers have been using learnings from these studies to drive loyalty program success ever since. Here are the highlights that apply to your customer loyalty program:

Goal Proximity

Back in the 30’s, researchers discovered that rats running a maze to reach food ran faster as they got closer. This finding led to a hypothesis stating that the tendency to approach a goal increases with proximity to the goal. In layman’s terms, the closer we are to a goal, the more effort we exert to get there.

Coffee + Loyalty

In 2006, the same principle was tested on humans. People given a punch card for a free cup of coffee after the punch card was full drank more coffee as they got closer to a fully stamped card. Take a look at parts of the study as they relate to loyalty programs:

  1. The illusion of progress toward the goal accelerated purchases. For example, customers who received a 12-stamp coffee card with 2 pre-existing “bonus” stamps complete the 10 required purchases to get a free cup of coffee faster than customers who receive a “regular” 10-stamp card that was blank. This works because customers viewed the 2 stamps as progress, making it seem like they were closer to their free cup of coffee.
  2. People enjoy being part of a rewards program. Susan Weinschenk, Ph.D explained that when compared to customers who were not part of the program, the customers with the reward cards smiled more, chatted longer with café employees, said “thank you” more often and left a tip more often, too.

You can read the results of the complete study here.

Increase customer visits with a “First Visit Boost”

Whether you’re a current Belly Merchant, opt for the old paper punch card, or don’t have a customer loyalty program yet, there are a couple takeaways you can apply.

Reward More Up Front

Offer “First Visit Boost” (Triple Belly Points) during a new customer’s first visit. For example, if you want it to take 5 visits before a customer can redeem a free slice of your amazing pizza, give 15 points on their first Belly check-in (instead of the usual 5 points/visit) and then make the reward a 35 point reward instead of a 25 point reward.

Promote First Visit Boost to Your Customers

If you’re a Belly Merchant, we’ll do this automatically for you through a triggered Member email. If you’re not a Belly customer, point out to your customers that they earned triple stamps today – and let them know how many visits they are away from a reward!

Apply these tips to boost customer visit frequency today!

If you’re a Belly Merchant and you’d like help with your rewards strategy, contact your Merchant Success Manager.

If you’re not using Belly yet but are in the market for a customer loyalty solution, you can schedule a demo here.