#496: Get "the Skinny" on Skinner and Operant Conditioning

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Bill: Hello everyone. I’m Bill Hanifin, the CEO of the Wise Marketer Group, and I’m here today with CMO Aaron Dauphinee, and together we’re the host of the Wiser Loyalty series. Now this series introduces constructs from my Loyalty Academy curriculum that we find interesting and we think will help all of you to become wiser marketers and wiser on the loyalty topic. Now what we’re gonna do is couple our weekly learnings with relevant in-market case examples, share our own points of view. And we’re gonna have some fun because sometimes you’ll see that Aaron and I are very well aligned and other times you’re gonna see us have a nice, healthy debate.

So join us now as we talk more about this month’s area of focus, which is the psychology of loyalty. And today the topic is gonna be particularly desired behavior theory.

Aaron: And let me be the first to dive in on this week. So, reinforcing, desired behavior changes, the reason that loyalty exists, right? And we wanna induce some type of behavior that then elicits sorry, induce some type of action that elicits a behavioral change. And so when we think about where this originated from. Really, it was B.F, Skinner’s construct that came around operant conditioning in the 1970s. And he did it from the 1970s onwards.

And most often people recognize B.F Skinner’s work as what he did with rats and pigeons in the 1950s, which is predates this but really that’s the foundation and the reasons why currency-based loyalty programs works today. And to take it outta the loyalty context, but just to put it into, some base understanding for folks, as humans we learn quickly the relationship between behaviors and consequences. I think most of us can indicate as a child at some point, we were perhaps doing something, that was daring or risky that our parents just told us not to be doing.

And then, lo and behold something goes wrong and we hurt ourselves. Or we hurt others, and irrespective there’s a negative consequence that comes from this. And so our likelihood to repeat that, action again, starts to diminish maybe for some it’s entirely. So we never do that action again because of that consequence.

But for others who are a little bit more devilish or impish, perhaps it’s only for a state period of time. But you get the point of around the relationship between certain behaviors and actions that then have some repercussions as a result. And that’s on the negative side. If we flip that and then we think about it from a positive perspective it’s also true.

So our actions are, followed by desirable outcomes that we like, we’re more likely to repeat those and over and over again. If I think about in our industry I travel a lot and with, if I travel with a particular airline or their airline’s partner programs that they have in place I start to gain status.

And you know what the best part about that for me is that it saves me time, and saving time by, I get an early boarding line, I get priority tags for my check luggage. I get seats closer to the front of the plane closer to the doors – pardon me. And, it basically, it only took me one or so years to get the status at a certain level. And then I just always want to keep it because of these desired outcomes, this time savings, which is so valuable to me. And there’s other benefits as well too, but the point being like, I’m hooked. I’m in and that positive type of reinforcement and treatment.

Has me doing things that I wouldn’t normally do. Such as at the end of the year, I take a look at my balance and I see what’s the threshold I need and how many more points I need, and I get on a mileage run and I get on a and I go places that I, sometimes I wanna go, but I don’t necessarily wanna go to them in December, but they get me enough points to get there or I have a credit card promotion that is able to get me to the threshold. And so I spend a bit more in November, December to make sure I get over the line. It’s induced behavioral change that the programs are putting in place to get that positive outcome back in play for me.

So that’s a bit of, hopefully putting into context for you a little bit about offering conditioning. Bill, why don’t we talk about a couple other examples.

Bill: You know what, this to me, Aaron, this gets right to the core. I can’t believe we’re talking about research that was done in the 1950s.

That involved pigeons and rats. Yeah. And yet it speaks to one of the biggest questions that’s going around the loyalty industry today. And that is our currency programs dead. And that’s a favorite topic of bloggers and people who are trying to get provocative and create some nice traffic on their website, you know, they read the article, currency programs are dead or they should be dead, or something like that. But, if you think about it there’s a reason to go back. You know how we talked about the OGs and the things that we learned earlier? Somebody back in the day said, having a points currency is a good idea with the loyalty program.

Now we know why, because people, perform behaviors, then they get a reward, and that reward came in the form of a currency of some sort, miles, points, etc. And then they learn like that’s a good thing. I can get really fun gifts, with that. So the, yes, the industry’s been built around that. And there’s a reason why it works because people respond to this. They like to see a scoring system. They like to be able to measure how they’re doing and they like to be able to see that I execute a certain behavior, I get this reward, and I get a real benefit from the reward, so, it does work. So really the question for me is, will the currency programs go away? Should they go away? And I think if you stay true to the idea, like that, we have to think about people, our customers as humans, and then we think about how do humans really, how are they motivated and what are the things that really drive them towards certain behaviors. So we can try to, as a brand and enjoy it and get some benefits from, I think you’ve said that maybe currency of some sort is always gonna be around some form of measurement is always gonna be around. Does that mean that every program is gonna be a points program? Absolutely not, right? It might be that currency is much more in the background, but I think there’s gonna be some sort, some form of measurement that’s still gonna be in place.

Aaron: I like that you’re using the term benefit Bill. I think that’s critical. The example that I gave was about status and time savings, right? That’s something that’s measurable that I can, have, that’s induced to me by the benefits that come from a certain status that a and a threshold that I’ve achieved with my points accumulation.

So the currency is involved in that, but the real payoff isn’t for, an actual flight itself through a travel redemption in the example to play or to do a lower points or mileage redemption that comes in the form of electronics or passes to sports and entertainment events or whatever it is.

But the point being like there’s those two things come hand in glove. And so I think your point around, there’s always gonna be a need for some element of currency, that’s a human inducement in natural behavior to say, I need to put the arithmetic around it. But then there’s also the experiential too.

Now that’s come into play. It’s so important. And so the two are ebbing and flowing. And I think for me, it resonated a couple years ago when I was working with Bond Brand Loyalty on the Loyalty report. And we talked about Amazon being a top program in particularly in the US but in other countries as well too.

And when you think about Amazon five or ten years ago or when it started, no one would’ve thought that Amazon Prime was actually a quote-unquote loyalty program per se, because there was no currencies associated with it, right? It was right. All these beha sorry these benefits that were much more experiential or passive if you will.

There was the hard benefit of getting into the game and actually having your stuff sent to you. But that was a function of a business model, right? That was more, more so that wasn’t about the inducement of paying dollars to, to, get higher points or go faster.

It was just about saving and eventual savings and the, and what I found, or what we saw in the Loyalty Report, -pardon me. Is that after a while when Amazon started to couple their credit card, which had a points mechanism associated with it, they started to rise up. And so that duplicative effect or that stepping stone coming together of the mainstay Prime program, plus the credit card started to rise up and those became some of their best late hold customers.

And so I do believe what you said in terms of there’s always a role for currency. It just doesn’t need to be the same for every single program that’s out there.

Bill: Absolutely. And the only thing, I’ll just cap it off with this, when I think the reason that I’m so excited about the idea of bringing behavioral theory into loyalty in the centerpiece of us creating strategy is, we’ve had these debates, who can be most convincing?

Can I convince you against currency programs or you do the same for me? But it’s really about, maybe we should both pause when we’re having these debates in the boardroom. We’re in our strategy team, so we should say, wait a minute let’s think about how people are motivated, oh, they might benefit from some sort of, if not currency, then some sort of a system where they can associate their behaviors with a reward.

That’s what should be driving our decisions. It, and that would be a much more to me wise way to approach the whole question of should we have currency or should we not? It’s based on what humans want. It’s not based on what we think is the next best thing to do.

Aaron: And putting the customer first is always gonna be a strong winning strategy.

Bill: Bingo. That’s what we’re all about, isn’t it?

Aaron: Yeah, a hundred percent.

Bill: Thank you, Aaron.

Aaron: Thanks, bill.

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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