Monday, November 3, 2014

Show Devoted Customers How to Get Lucky

Customers who believe they’ve gone above and beyond to patronize your store feel luckier when shopping with you. Studies at Ohio State University and Vanderbilt University find that these extra-effort shoppers show a special interest in games of chance, such as sweepstakes and random rewards.
     Other research finds that a shopper’s belief they’ve made an extra effort can arise in a variety of ways:
  • Shopping with you at high frequency 
  • Driving a longer distance to shop with you 
  • Selecting an item with plans to use it in the future rather than now 
  • Choosing an item for use by somebody else 
  • Shopping with children in tow 
     If you’ve many shoppers like these, consider engaging them with game formats. People have always loved to play games used as sales promotions. Scratch-off discounts. Sweepstakes. “Design our new logo” or “Name our new service” or “Tell us in 25 words or less why you shop at our store.”
     In the early days, before it was called gamification, retailers and manufacturers concluded that there needed to be real, tangible prizes for maximum participant involvement, although the value of the prizes often could be quite modest. People got involved for the joy of the contest.
     More recently, marketers realized that no extrinsic reward is needed if the excitement of the game is sufficient, as happens with shoppers who are feeling lucky. This love of the game blossomed with the popularity of desktop computers and then the sorts of mobile and desktop devices shoppers use for ecommerce. The word “gaming” morphed from serving as a euphemism for “gambling” into a shorthand for “playing games on a computerized gadget.”
     With customer loyalty programs, the reward could be promotion to the next level—a concept quite familiar to those who play online games.
     Here are some tips for maintaining multitier loyalty programs, based on experimental research findings and retailer experiences:
  • For movement to the next level, set thresholds which are out of grasp, but within reach. 
  • Provide lots of ways to earn credits for movement to the next level. Referring a friend earns points. “Get extra credit for coming to special event sales, even if you end up purchasing nothing.” The objective is to maintain momentum and a sense of achievability. 
  • Set thresholds on the basis of continuing activity, not lifetime activity with you. Maintain purchasing motivation by requiring ongoing actions in order to receive the elite benefits. 
For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more: 
Drive the Psychological Distance 
Game On with Consumer Competition 
Tier Your Loyalty Programs Apart 
Cultivate Positive Moods for Risk Assessment 
Announce Limits on Item-Based Loyalty Programs

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