Thursday, June 18, 2009

Leading - What Leaders Can Learn From Loyalty Cards

By Andrew Lewis

Can you shop anywhere today and not use a loyalty card? Kroger, Giant Eagle, CVS, Best Buy, Staples and many others use these cards to encourage consumers to shop in their stores.

So what can we learn from loyalty cards?

Many of these cards use a theory known in the marketing world as “endowed progress.” A retailer may require 8 purchases to achieve a point value that equates to a reward of some type. Rather than establishing the
program using an 8 purchase model, the stores will require 10 purchases and give the consumer credit for 2 purchases at enrollment.


This immediate progress results in a sense of having embarked on the larger goal and provides a feeling of accomplishment that increases commitment and the likelihood of task completion. In fact, it even decreases the average completion time.

In short, when shoppers can see they have successfully made progress, they are more likely to see it through and feel better about their effort along the way.


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