THE SCIENCE BEHIND GIFTING

Imagine that you are a customer who has just received a reward from a loyalty scheme. How do you feel? Excited? Grateful? Or maybe… indifferent? Or even… insulted? The truth is, your loyalty scheme may not be as rewarding as you think. In fact, it may be hurting your customer experience more than helping it. Why? Because the psychology of rewards is not as simple as you might assume.

That’s what Dr Simon Moore, CEO and Chartered Psychologist at Mission Agency, IB, revealed to the SPARK team in his fascinating talk on occasion-based rewards.

“Let me explain using Christmas as an occasion to explore why this might be.

For those that celebrate Christmas, it is often associated with a time of family interaction, eating and gift giving. Quite a period of stress for many in terms of one or all of those things to plan and experience.

Gift choosing in particular, can be pretty stressful for many people. Selecting the right gift at this time of year can have a significant psychological impact on both the giver and receiver.

Consumer psychological research has demonstrated that gift receivers perceived levels of joy and happiness is not always very high during occasion based exchanges. This is probably because the psychology of expectation is heightened during occasion based gifting – higher levels/quality of gift is perceived to signal care and personal understanding. In other words, because we know that others have been socially signalled to purchase something for us, we non consciously expect greater effort in their gift decisions. Expectation, psychologically then results in greater anticipation of a surprise, reward or satisfaction. We anticipate more.

Research has also demonstrated that recipients anticipate that their happiness levels to be quite high when receiving non occasion-based gifts, varying very little with the judged quality of the gift. In other words, surprise often creates greater levels of delight and heightened positive emotions.

This has significant implications for brand loyalty, subscription and reward schemes/cards/points. If consumers expect a ‘gift or reward’ from your loyalty system then you need to go above and beyond to psychologically impress them. Whereas, receiving a reward unexpectedly, can trigger higher positive emotional reactions (that are linked to your brand).

Some brands have been using this non occasion, non linked reason to create positive brand moments, by gifting their consumers unexpectedly.

Psychologically, surprise gifting of smaller rewards outplays larger gifts of expected rewards.”

With this psychological knowledge, SPARK and IB have a powerful alliance to help clients achieve remarkable results with their reward, subscription and loyalty schemes. By understanding the emotions and motivations behind gifting, we can craft personalized and memorable experiences that will delight your customers and keep them coming back for more.