05-Jun-2011 18:46

Gain an Advantage with a ‘Head Start'...

Gain an advantage over your competitors with a ‘head start’…

Ok, you have a quality product, a fair and competitive service and some decent clients… How can you remain ahead of the chasing pack?

We all recognise that the hard work does not stop simply because we have persuaded our customers to do business with us.

In an environment where there are so many distractions, it can be a challenge to keep our clients loyal and to continue to do business with us.

To help overcome these issues, many employ a variety of different incentives and schemes and motivation as an impetus to keep staff focused and customers loyal.

But when it comes to such loyalty and incentive schemes a question arises - which features of a scheme are most effective at persuading people to remain loyal and committed to you and your company?

Persuasion researchers think they may know the answer - schemes that provide a ‘head start’.

In a series of loyalty experiments cards were handed out to hundreds of customers at a local car wash.

The car owners were told that every time they visited the car wash they would get their card stamped, and when they had filled the card with ‘stamps’ they would receive their next car wash free.

However, unbeknown to the clients there were two types of card.

Half of the loyalty cards required customers to collect just 8 stamps to claim their free car wash.

The other half of the cards required customers to collect 10 stamps.

However, while customers in the second group were told they had to collect 10 stamps they were immediately given 2 "free stamps" as a bonus and to set them on their way…

In essence, the required purchases and the rewards were exactly the same in both groups.
What wasn't the same was the number of customers in each group who stayed loyal, completed the card and claimed their free car wash.

According to the surveyed results, in the first group only 19% of customers made enough purchases to claim their free car wash. However, in the second group, which had been given a head start, the purchase rate rose to 34%.

The effect of giving customers a ‘head start’ without actually reducing the required purchases almost doubled the effectiveness of the promotion.

The head start also increased the speed of purchases.

Customers who were asked to collect 10 stamps and who were given a head start completed the loyalty cards far quicker than those required to collect just eight.

Social scientists call this the ‘endowed progress effect' and suggest that there are two underlying reasons why more people in the second group completed the task compared to the other and in a quicker time.

Firstly, the scientists claim that results prove that people are generally more willing to commit to tasks that are already underway, but incomplete, rather than to begin a fresh task.

And secondly, the closer people get towards completing a specific goal, the more effort they tend to exert to complete the task.

So, when persuading other people to say ‘yes' to your requests, your products and services...

...remember, providing people with a little ‘head start’ could do wonders for your company bottom line...

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Contributed by Norman Feiner on 06-Jun-2011 18:58
..or Steve, she was a stooge, a set-up, a bluff just to prove how great the store staff were and how well they treat their 'loyal' customers

...or am I just a cynical old goat (don't answer that!)

Contributed by Steve Hall on 06-Jun-2011 14:44
I saw this in action a few weeks ago. The card one had to save on had the first few "stamps" pre-printed on the collector sheet. The customer/collector ahead of me in the queue by mistake stuck her stamps ON TOP of the pre-printed stamps whereas she should have added them to the first blank spaces on the card. OMG. WW3 was called and I was expecting Armagedon, The Spanish Inquisition, Hell to freeze over and a Man City away win any moment. She was so upset about losing something with a notional value of perhaps 50 euro cents! Credit to the shop guy, he kept her happy and gave her some additional stamps to use in the correct spaces. Fair to assume that this shop has a friend for life and a very loyal customer. Respect!
Contributed by Norman Feiner on 06-Jun-2011 00:16
Absolutely George, a fine & effective incentive.

To use an expression, 'it does what is says on the tin' :)


Contributed by George on 05-Jun-2011 22:27
It could be the respondents in the group given the stamps thought they had some value (like loyalty points) and hence were more likely to finish the task to get the prize.
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