Why do consumers love rewards?

Why do consumers love rewards?
Why do consumers love rewards

Why Do Consumers Love Rewards? A Study in Behavioral Marketing

While it may seem to befuddle some and appear clear as day to others, the reason why we find ourselves incessantly checking our phones or Facebook pages isn’t out of mindlessness—it’s based in the pleasure principle.

The Biology of Rewards

What is the science behind pleasure? The pleasure reward circuit in the brain is an area that can be triggered by stimuli like food, sales and, of course, digital devices, all of which provide us with an impetus for many of our behaviors. This pleasure circuit, called the nucleus accumbens, activates not when reward is received, but in anticipation of the reward. What creates the pleasure seeking behavior is in reality the desire to alleviate the craving for that stimulus. This conditions our brain to form causal relationships between the external stimuli and an internal “trigger” that comes to associate the stimuli with a pleasurable reward—knowledge which proves to be invaluable for modern day marketers (Source: BoingBoing).

When something new is encountered outside the norm of this conditioned pleasure circuit it seizes our attention in a dramatic way. This is the appeal of novelty, a phenomenon studied by the reputed behaviorist B.F Skinner, whose findings revealed that novelty was a powerful motivational tool because the pleasure circuit in the brain responded most powerfully to what he called “intermittent reinforcement”. In other words, the more random the distribution of rewards, the more pleasure the subject would derive, a theory that was reinforced by the fact that the lab rats in his experiment that received the variable rewards became engaged in more compulsive behavior than their counterparts.
Skinner’s work would eventually pave the way for modern marketers looking to distinguish themselves from a sea of equally voracious competitors. It would soon go to prove that companies that were capable of finding real world applications for Skinner’s research found themselves at a distinct advantage—namely in those who managed to attach their services to the users’ lifestyles, making a brand into a way of life rather than just a business. But how exactly is such a feat possible?

Cialdini Principles

A noted professor of psychology and marketing, Robert B. Cialdini helps to answer this illustrious question through his work “Influence: The Psychology of Persuasion” by postulating that all human behavior was ultimately inspired by a logic of reciprocity. The idea of reciprocity here is based in the belief that people feel indebted to those who give them gifts or do something for them, a motivational factor that could be harnessed to make users complete a certain task or behave in a certain way (Source: eBrand Media).

So what are the implications for marketers? Cialdini notes that, “The implication is you have to go first. Give something: give information, give free samples, give a positive experience to people and they will want to give you something in return.” It’s a principle which can be executed with little to no cost in the digital era and will inspire a sensation of being indebted in the user, making them more likely to engage in a particular type of behavior (gratitude). Companies can offer a wide range of micro-incentives like this to easily acquire new users, a feat most commonly seen in buy one get one off promotions. This type of logic can also be applied to a wide range of items like free samples or coupons emailed to users daily or even better digital downloads (white papers, mp3s, games, movies).

By utilizing the power of small, digital rewards—micro-incentives which can include anything from a free e-gift card with a magazine subscription or a coupon emailed in exchange for completing a survey—brands can not only acquire new users for less but are also acting on the principles of novelty and value. The novelty principal ensures that as long as the reward is variable it will delight us, while the value principle reassures users that their time has been well spent, effectively strengthening the associations between the purchase and the pleasure center in the brain.

Harnessing digital rewards rather than physical ones not only offers a slew of benefits ranging from lower cost and higher perceived value to better ROI, but it also introduces the idea of social sharing to the mix. Cialdini postulates that the value of authority—or in this case, the ability to influence others—is paramount to the user’s decision making process. Millennials sharing activity on social media is directly connected to their buying behavior, with up to nearly 70% of millennials being more likely to make a purchase based on their friends’ social media posts (Source: ClickZ). This means that brands that harness digital tools as rewards become far more flexible in terms of audience reach as each subsequent buyer gains the opportunity to be an influencer, sharing their purchase (and influencing others) as they go along in their day to day behavior.

Companies that want to go beyond short term goals like increasing sales in favor of more long term effects—namely, forging lasting bonds between brand and consumers—can harness these psychological principles to ensure that they create memorable, meaningful experiences for consumers. By surprising users with small, thoughtful rewards on a frequent basis, brands can not only continually delight and excite their users, but they can also influence them to become users for life. The process of the conversion hook (trigger, call to action, reward) can then be refined to create internal triggers within users so that they form positive and lasting associations between themselves and the brand, a feat which is remarkable in and of itself.

Michael Amar, Ifeelgoods’ CEO & co-founder