Can Behavioral Science help companies design better loyalty programs?
I have been thinking about loyalty and rewards programs and how they have been designed. (I also spent a few years in the space)
The definition of loyalty according to the dictionary is "a strong feeling of support or allegiance" - think of a sports fan for example - sounds like intrinsic motivation
If we go further and look at the definition of a loyalty program "a strategy in which a company provides its customers with rewards and discounts for being loyal" - sound like extrinsic motivation (mostly)
When I speak to people that want to improve loyalty, I feel most want to design for intrinsic motivation, yet it would seem like most programs (not all of course) are designed to be extrinsic in nature. (and some have to be of course)
If you want to move beyond external rewards, you have to design your program to get people moving from extrinsic to intrinsic.
With that in mind, I am going to build a Loyalty Design - (Behavior Edition) framework - to help teams incorporate behavior, psychology into their programs (or design parts of their program this way)
The thinking behind the framework will combine a few things, and these would be some of the books I would use to design it.
1. COM-B and The Behavior Change Wheel book by Susan Michie and Robert West 2. Glued to Games and Self Determination Theory by Deci 3.
Octalysis by Yu-kai Chou
How would the steps go? (i'll share more in the next days and show progress on the Miro.
Some elements will be used from the Behavior Design Strategy Framework Elina Halonen and I built and would include:
Define and Derive 1.Understand the Outcome from a Business Perspective 2.Define Success Metrics 3.Define the Actor 4.Define the Target Behavior (and sub behaviors) 5.Understand and Map the influences of the behaviors (and the system if needed) 6.Establish the Loyalty goal 7.Validate (can we do this?)
Design 1. Use Self Determination theory for: -Autonomy -Competence -Relatedness
2. Use Octalysis core drivers of (mapped to SDT): -Meaning -Accomplishment -Empowerment -Relatedness
3. Take the isights ideate and prototype design features
4. Test and Iterate
5. Implement
The above will be a framework to design for intrinsic motivation in a Loyalty program. Of course you can still have some elements of extrinsic motivation (external rewards), and I am also conscious that not all tasks, work, products programs will be a fit for intrinsic motivation, and thus some external rewards will be needed.
I would love to hear not just from the BeSci community on this but also from the loyalty people I know Paula Thomas Nik Laming, CLMP Mark Ross-Smith Simon Taylor Nauman Moghal Amy Baynes Milda Ratkelyte Juliana Veterano Christopher Staab to make sure not to miss anything from your knowledge perspective.
#loyaltyprograms #loyalty #behavioralscience #behavioraldesign #productinnovation #digitaltransformation #marketing #servicedesign