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It’s All In the Presentation: Using Psychology to Build an Effective Rewards Program

To most of us, terms like “cognitive conditioning” and “salience” can be, well, a little off-putting.  If you feel this way, don’t fear — today, we’ll be breaking down some of these psychology concepts so that they’re understandable and (wait for it…) useful.

Specifically, we’ll look at how these concepts can be used to design an effective rewards program.  These types of programs are beneficial because they create value for both your brand and your customers; while your customers gain the ability to work toward rewards, your brand benefits from engagement and loyalty.  

However, as we’ll see, not all rewards programs are created equal.  In fact, even subtle changes to a program’s presentation can impact its effectiveness and the shopper response that it elicits.

But what specific changes should you be making?  Psychology can certainly help here, but we first have to consider the specific ways in which your rewards program must engage customers in order to create value.  Shoppers must 1) be aware of the program, 2) invest mental energy into considering the program, and 3) associate your brand closely with the program.

Let’s take a closer look at what each of these steps entails.

Step 1: Increase customer awareness of your program.

It seems straightforward: your rewards program can’t generate value if customers aren’t aware of it.  However, lack of program awareness is a surprisingly common problem.  The big question is: How can you address this without being heavy-handed and compromising user experience?  As it turns out, one solution is to leverage the principles of “visual salience”.

But wait — what in the world is “visual salience”?  In psychology, to say that a stimulus is “salient” means that that it stands out prominently.  Something that makes an image or link more salient effectively boosts its ability to attract both awareness and attention.  This means that you can easily increase awareness of your rewards program by making visually salient references to the program.  

The first step is to ensure that your program is actually being seen.  For example, we recommend placing links to the program in frequently-viewed locations on your site (some good ones include your site’s navigation bar, tabs along the bottom or side of the browser window, or even your homepage’s hero banner).  It’s also worth noting that engagement drops significantly as shoppers have to scroll farther down a page; for this reason, email capture windows should either be pop-ups or placed high up on the page.  

However, ensuring that your program is seen is not enough to ensure that it is salient.  For this reason, it can be important to adjust things like color, size, and shape/font in order to create a contrast between the object of interest and its background.  The attention-grabbing effect that this has is known as the “pop-out effect”, and the key here is to differentiate between the object and its surroundings.  In fact, we’ve seen merchants dedicate large displays to their rewards programs, yet still fail to boost awareness.  Why?  Because there was little visual contrast between these displays and nearby visuals, so they were usually overlooked.

Best Choice Products’ page is a nice, simple example of how to effectively establish visual salience.  For one, their “BCP Rewards” link is placed in the navigation bar, safely above the fold, where engagement is greatest.  The link’s vibrant red color also stands in stark contrast to its surroundings, and its placement is farther to the right than most of the other links.  Therefore, the BCP Rewards link succeeds in building program awareness without being clunky or diverting much attention away from the rest of the page.  (This last point is worth emphasizing: you can promote program awareness without making program links or email captures the primary focus of every page.)

But what happens once you’ve succeeded in grabbing a customer’s attention?  This shopper must still come to understand and consider your rewards program, which requires mental effort.  This means that your brand must…

Step 2: Encourage customers to invest energy into understanding your program.

Psychologists commonly agree that we have limited cognitive resources, and that we automatically seek to conserve these resources.  Therefore, people tend to treat mental energy almost like cash that should be spent stingily.  Because we are such frugal thinkers, people have a low tolerance for miscellaneous tasks that require mental effort; we tend to disregard unclear concepts if they aren’t central to our lives.

This explains why friction in user experience can so easily create problems with customer engagement.  Even if customers are aware of your program, they may disregard it if the system is unclear, complicated, or otherwise appears to require more than minimal energy to understand.

Therefore, it’s important to thoughtfully organize your program presentation.  There are a couple ways to approach this.  For example, FAQs are a great way to provide customers with detailed but easily-digestible information, and Kopari Beauty is a great example of this.  They address a comprehensive (but relevant) set of questions, and the collapsable layout ensures that customers don’t feel overwhelmed.

Image via Kopari Beauty

Image via Kopari Beauty

We also recommend designing your program such that converting from dollars to reward points (and vice versa) is simple.  A transparent ratio of $1 spent:1 point earned (and an equally simple points redeemed:dollars earned ratio) accomplishes this.  If you want to take things a step further, consider following Edens Garden’s lead — provide customers with a points conversion chart.

Imagine via Edens Garden

Imagine via Edens Garden

You can also consider providing only basic information until customers have created an account.  This decreases the amount of mental effort you’re asking customers to invest before signing up, making shoppers more likely to actually engage.  For example, Lavanila only displays program basics to those who haven’t signed up, and requests that they “Create an account to see even more rewards”.  After sign-up, a full dashboard — which includes FAQs and full program details — becomes enabled.

Image via Lavanila

Image via Lavanila

Step 3: Create a lasting association between your rewards program and your brand.

Even after capturing awareness and engagement, your program must be closely associated with your brand before it can create brand loyalty.  This is because your rewards program can only increase your brand’s appeal relative to competitors if the value of your rewards program is psychologically associated with your brand.  Once this occurs, switching costs become reinforced and your customers’ brand loyalty increases.

But what’s the best way to build such an association?  Well, according to psychological theories of conditioning, an association between two objects is formed when the objects are repeatedly presented together.  Therefore, it may be beneficial to increase the frequency and strength of pairings between your brand and your rewards program.  

This can be accomplished in various ways.  First, consider integrating your brand name into the name of your rewards program; this way, every time a shopper encounters your program, its connection to your brand is reinforced.  Vanity Planet’s choice to name their rewards program “VP Rewards” is a simple example of this.

This program-brand association can be further strengthened by placing components of your rewards program throughout your website, from landing page to checkout.  This ensures that your customers’ brand experience is repeatedly associated with perks exclusive to your brand.  For example, The Elephant Pants has designed their product pages such that each displays the number of reward points an item is worth.

Putting It All Into Action

Now it’s your turn!  Implementing these sorts of subtle adjustments can make a big difference — but you don’t need to take our word for it.  When making program adjustments, it’s a good idea to quantify your own shoppers’ responses by running A/B tests or using a customer rating/feedback system.  Additionally, looking for increases in redemption rate (total points redeemed / total points earned) is a good way to gauge shifts in program engagement.

But the big takeaway is this: when it comes to getting the most out of your rewards program, it really is all in the presentation.

brand loyaltycustomer awarenesscustomer engagementcustomer loyaltyloyalty programpsychologyrewards programsalience

Talia Patapoutian • June 15, 2017


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