Reward Psychology Part 2: keeping customers using variable rewards

When I think about variable rewards, I think about slot machines. Bright flashing lights, spinning technicolour wheels and palm-sized buttons with confusing names. 

If players were guaranteed a payout every third play, they’d get bored pretty quickly. Not knowing when a payout might happen is suspenseful. It keeps you playing. Hearing the mechanical sound of pound coins being ejected at high speed and people craning their necks to see how much you’ve won is quite the motivator. 

The wonderfully named Burrhus Frederic Skinner’s foundational work on the psychology of rewards showed that rewards given on variable schedules are more effective once a behaviour is established. When people are uncertain when a reward might return, they stick with the behaviour for longer. Which brings us back to UK retail.

Ask a neuroscientist about what’s going on when a shopper anticipates a good deal, and they’ll talk about how anticipation triggers the release of dopamine. When you expect something good to happen, your brain gets ahead of itself and starts giving you a little taste of the happiness that might be coming. This is your brain’s way of keeping you motivated and excited. 

Reward apps are gamifying engagement

Having a physical loyalty card in your wallet is ancient history. Nowadays, loyalty apps use techniques inspired by gaming and social media to drive user engagement. Users find a labyrinth of interaction the second they open the apps. They’re engaging, colourful and dynamic. You can spend a significant amount of time browsing every time you open them up.  

Time-limited, conditional rewards:

• Morrisons use conditional rewards that are dependent on buying certain products. Open the app and you might find you qualify for bonus reward points as a result of buying from a nominated category. Just select the category you’re interested in, accept the “booster”, and buy the items.
• From a retailer perspective, these personalised offers are all about incremental spending. If you put just one more item in your basket, they’ve done their job.
  
• These rewards are scarce — they change frequently, are limited in number, and are limited by time. By introducing variability and chance, they develop intrigue and give you a reason to pick up your phone and open up the app again.

Instant prize draws:

• Sainsbury’s Summertime Spins promotion encouraged customers to spin a virtual roulette wheel to win points and prizes. Over four weeks this summer you got one free spin per week of the competition. The prizes were pretty good too — who wouldn’t want a free e-bike or free nectar points?
  
• Users had to log into the app weekly to find out what that week’s prizes were and play. Again, uncertainty is by design here. Not knowing if a reward might come strengthens the desired behaviour to open the app. 

Celebrating milestones:

• Morrisons use confetti animations to celebrate user milestones. In this instance, the customer has accrued 5000 points — which triggers a £5 voucher. The shopper has immediate feedback: confirmation they’re on the right track as they collect reward points.
• Doing this via a digital confetti explosion which floods the screen is pure gamification. It’s about fun and makes the shopping experience more interactive. 

In summary: variable rewards leave you wanting more

• Unpredictability is compelling.
• A sustainable loyalty programme is about creating the right blend of reward types, scarcity and consistency.
• Variable rewards leave the customer wanting more: they entice people to return, log-in and shop again.

If you missed Part 1 in this two-part series about reward psychology, check it out to find out how to use consistent rewards to win new customers. Get in touch with Trinity McQueen to find out how we can help you keep customers engaged with reward psychology.