#493: A Loyalty "Minded" Month Kicks Off with a Little Self Determination

This episode is our first one in the “Wiser Loyalty” podcast series, hosted by Bill Hanifin and Aaron Dauphinee.

Listen to our industry experts discuss a construct from their Certified Loyalty Marketing Profressional™ (CLMP™) curriculum and explain the meaning of “self-determination theory” and why it’s an important concept for loyalty marketers to understand.

They also discuss the increasing importance of understanding the psychology of consumer buying behavior, including some real examples of brands that are already adopting these underlying drivers, in order to drive their program’s performance.

Show Notes:

1) Bill Hanifin⁠

2)Aaron Dauphinee

3) The Wise Marketer

Audio Transcript

Paula: Hello, and welcome to Let’s Talk Loyalty, an industry podcast for loyalty marketing professionals. I’m Paula Thomas, the Founder and CEO of Let’s Talk Loyalty, and also now Loyalty TV. 

If you work in loyalty marketing, you can watch our latest video interviews every Thursday on www.loyalty.tv. And of course, you can also listen to Let’s Talk Loyalty every Tuesday, every Wednesday, and every Thursday to learn the latest ideas from loyalty experts around the world.

Today’s episode is co-hosted by Bill Hanifin and Aaron Dauphinee, CEO and CMO of The Wise Marketer Group prospectively. Wise Marketer Group is a media education and advisory services company providing resources for loyalty marketers through the Wise Marketer digital publication and The Loyalty Academy program that offers the certified loyalty marketing professional designation.

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Bill: Hello everyone. I’m Bill Hanifin, the CEO of the Wise Marketer Group, and with me today is our CMO Aaron Dauphinee. Together we’re the hosts of the Wiser Loyalty series. This series introduces constructs from our Loyalty Academy course curriculum that we find interesting, and hopefully we’ll help listeners to wiser on loyalty.

We’re coupling weekly learnings with relevant in-market case examples and we’re gonna share our points of view and those that we’ve learned from or heard about from some of our listeners. So sometimes what you’re gonna see is that our points of view marry up really nicely, and at other times you might enjoy a healthy debate between Aaron and myself. So join us now as we talk more about this month’s area of focus, which is the psychology of loyalty, and then more specifically, we’re gonna talk about the self-determination theory.

Aaron: Bill, I love how you set that up for us. I agree. Sometimes we’ll agree and sometimes we won’t. But why don’t we focus on something that we know we agree on, which is self-determination theory. Can you talk to us a little bit about what that means? 

Bill: Yeah, absolutely. So, you know, what occurred to me, Aaron we’ve known each other for quite a long time. We’ve learned from a lot of the people that I’ve now kind of referring to as the OGs of loyalty. So there are certain people that were there when we first got into the business and We sat at their feet, so to speak, and listened to a lot of things that they had to say. And over the years, it suddenly hit me that we were the recipients of tribal knowledge. You know, we were practitioners based on the tribal knowledge that we had received from others. 

And you know, maybe it’s the millennials around us, but I thought we should question this. Why is it true? Is the tribal knowledge and the things that we’ve learned really the right thing? Is there any way that we can support some of this? So we looked into psychology of loyalty, and as you know, we did a lot of research over the last two or three years and, you know, to fast forward it, I would say, you know, what we kind of landed on, if we said well, the best example I can come up with is the, reminds me the story from the movie, The Matrix. Do you remember that one? 

Aaron: Oh, of course. Absolutely.

Bill: You remember the movie but you may not remember the story. So.

Aaron: I remember the story and the movie, I think, ’cause I think this is the one we believe him, but I like, I’d like to hear about it. Keep going.

Bill: Okay. All right. So you remember the famous scene where Morpheus and Neo were sitting in the room? He’s Neo’s finally been sort of, apprehended and then freed. And Morpheus has him and he puts this really life-changing choice in front of him. And he says, Neo, you can take the red pill or you can take blue pill, the choice is yours.

Aaron: Right.

Bill: And the red pill was gonna change everything for him. The red pill was gonna open up his eyes and probably expose him to new ideas, new information he had never even imagined. It could have been even a little bit scary. 

The blue pill was a lot more comforting. It was kind of the safe path, and it was gonna take Neo back to, ah maybe not answering all the questions and getting, you know, great revelation in his life. It was gonna take him back to the beginning so he can go back to his normal life.

To me, this whole journey of psychology of loyalty is very much a red pill type of moment. Cause our industry right now, it seems to continue to like the blue pill. We like to work with data and technology and we think that if we just have those two things and we dial ’em in, we’re gonna get great results all the time. And I think what we’re seeing, and I, you know, you’re gonna talk about some of this is the reasons why people buy and some of the things they do are based on things that we don’t always incorporate into our strategies today.

So I feel like what we need to do to really be successful in the futures, have a little courage, take the red pill. This whole idea, the psychology of buying behavior into the equation. 

Aaron: Oh, I love that. And that’s a great setup for this month’s sessions on psychology of loyalty because today we’ll talk about one construct, but over the next three weeks that follow we’ll fill in the gaps with some other constructs that tie into this ideas of what our foundations as for human behavior.

And so for those who may have did the precast and saw and heard about us coming for The Wiser Loyalty Series, you would’ve heard us talk about one element, which is self-determination theory. That theory has three intrinsic needs. And we spoke a little bit about self, or pardon me, social relatedness, my apologies.

And social relatedness is as an intrinsic need, is really about the way in which we value our relationships, is how I’d phrase it. You know, it’s about what communities matter to us most and those that we’ve choose to participate with. That’s kind of the social data construct. And we’ll tie this off with an example in just a second. 

But the other two are that we didn’t get into and have time for, the first one is autonomy. So really this is about an individual’s sense of control and seeking to control some of those outcomes and growth opportunities. I, the idea around this is really about, I am my own best influencer, in fact. 

And then the third one in terms of the three intrinsic needs is really about competence. And this is really about our competitiveness and the fact that we take on challenges and that we like them. It’s a way in which that we strive for achievement and oftentimes get to mastery. And which is part of this series of educating is trying to get people to be even those who are new to loyalty will learn lots. But those who know loyalty for many years, hopefully we will have some buffing and polishing applied to it too. 

So, so those are the three elements that come in the theory of self-determination. Perhaps we can tie this off as an example for people to bring it to life. Bill, do you, I know you’ve done a lot with deep engagement. Do you have any specific examples that could tie this together for folks?

Bill: Yeah, absolutely. So I think we’re gonna hear later in these theories Aaron, that each of the key elements of self-determination theory tied to trends that are pretty popular today in loyalty. 

So absolutely, the one you’re mentioning, competency ties to gamification. We’re calling it deep engagement because it takes on an aura of a little bit more, and in fact, we just wrote extensively about that in strategy brief that was just released on deep engagement.

But here’s the thing. Everyone likes to play. It’s universal. I just rented an Airbnb over the weekend and there’s a ping pong table out on the patio. So it’s irresistible, right? It doesn’t mean I’m good at ping pong. It just means like, we all have this inner desire. We wanna go play a game, we wanna create moments that matter. We like to win once in a while if we can. That’s good too. So, gamification, no wonder it’s not just a thing that somebody invented, but it taps into a very human need. Like desire and need that we have of wanting to play a game and to be a little bit competitive. And while we don’t always wanna win it, it’s gotta be kind of fun and have a good time. Right? 

Aaron: Oh, absolutely. 

Bill: Yeah. So there are a couple of brands that do this really well. I mean, I know you’ve got an example, I’ve got an example, but we talk about Starbucks, we talk about Chipotle. You see it with Sephora. You actually, you see it in a lot more places than you might realize. And maybe Starbucks is real obvious example because they take you on a journey. So to speak, right? 

Aaron: Yep. I think that’s a great comment. In terms of you, you don’t necessarily realize the amount that engagement or deep engagement and gamification constructs are coming into play. And so, I mean, that’s the good thing is when you don’t realize it, but there are elements that obviously you want to have come into play.

So, but you named some great brands to tie this together and I know this is probably a little longer than the short that we typically would like, but it’s our first one. It’s our setup. And so for the remaining three that come that follow the remainder of this month, they’ll be a little more tighter with new ideas and constructs that come in that talk about the foundations of human behavior and the psychology part of me behind the customer mindset.

Bill: So if you think about Starbucks as an example, they do take you on these journeys. I question often times that the type of journey that’s presented to me because I have to reveal something about myself. Now, I’m a brute coffee person. I’m not a complex coffee drink person. So when the journeys are presented to me as enjoy a bunch of different complex coffee drinks this week, and then you get, you know, multiples of stars or something, it’s really not compelling to me.

So it’s, there’s a game there, but maybe the rules of the game or the playing field they set for me sometimes can be a little bit off putting. So even though I have this desire like, gosh, I wish I could do this ’cause I’d love to get triple stars or something, right. It’s just, there’s just a little obstacle for me to get engaged.

Aaron: Well, I mean that’s some type of friction to make sure that you’re motivated and not just doing it on impulse or just on auto set as well too. And that’s just a good thing. 

Bill: Right? That’s right. There are great examples. It just shows when there’s a challenge put out there, when there’s an invitation to play, let’s say. And our good friend Steve Boska, who worked with us on our strategy brief, the deep engagement strategy brief, he has a great take where he said, you need to create some tension in a game. You need to make the consequences significant. So it has to matter. And then there has to be some sense of time urgency placed on it.

So that’s I think, the components of game mechanics that apply really well to our business. So if you think about that Starbucks example, they, you know, they, they probably didn’t pass all three tests, but you can see where maybe for some people it, it really did quite well. You know, how significant is it?

Well it depends on how involved you are in on your star journey, your collection of stars and so on. It is time limited because you have to take the action within four or five days, you know, that particular week and those sort of things. But so you can see how the games it’s not, it’s so much more than leaderboards and badges, the whole idea of gamification. If that’s all it was, it really wouldn’t tap into the basic human need this driver of competency. Right. 

Aaron: I agree. For sure. And I mean, at Starbucks, as you know, I think you’ve been playing to me, in terms of one of the programs that I actually quite like and get the value out. So I’m glad that we used this as a first example to tear up the season or tear up the series. Very good.

Bill: And my apologies to Starbucks, because as much a knock on them, is it just in middle of the type of coffee I enjoy and so it changes my engagement within journey. That’s all. Obviously, their journeys are designed for Aaron Dauphiné, not Bill Hanifin. 

Aaron: Hopefully they’ll find more of me than you out there for everyone. That’s good. 

Bill: That’s great.

Paula: This show is sponsored by Wise Marketer Group, publisher of the Wise Marketer, the premier digital customer loyalty marketing resource for industry relevant news, insights, and research. 

Wise Marketer Group also offers loyalty education and training globally through its Loyalty Academy, which has certified nearly 900 marketers and executives in 49 countries as certified loyalty marketing professionals.

For global coverage of customer engagement and loyalty, check out thewisemarketer.com and become a wiser marketer or subscriber. Learn more about global loyalty education for individuals or corporate training programs at loyaltyacademy.org. 

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