#268: Lessons from the Loyalty Science Lab - Short Summary Show

Welcome to Let’s Talk Loyalty, an industry podcast for loyalty marketing professionals. I’m your host, Paula Thomas. And if you work in loyalty marketing, join me every week to learn the latest ideas from loyalty specialists around the world.

 

Hello and welcome to this week’s short episode of Let’s Talk Loyalty. I’m your host today, Paula Thomas. And this week we listened back to our interview with you. Yuping Liu-Thompkins, the Founder and Director of the Loyalty Science Lab, an American loyalty research facility based out of Old Dominion University in Norfolk, Virginia.

 

Yuping’s research is focused on the intersection of academic study and the practical use of loyalty programs, including fascinating topics, such as the psychological effect of loyalty programs and specific loyalty tactics. With so few academic studies focused on our industry. Yuping and her Loyalty Science Lab Team really brings some unique and valuable insights to our community.

 

In this episode, Yuping shared some of their key ideas and learnings. For example, some of the deeper psychological insights, like whether it’s more helpful and effective to use a historical perspective, for example, this way you tell your members how far they’ve come and what they’ve learned to date on your program, or what about using a future-focused approach? And instead, tell them how close they are to earning a reward or to the next milestone. This kind of research helps to understand the mentality of your members. How do you think they’re feeling? Are they just getting started and thinking, “Oh my goodness, this is a waste of time, I’ll never get anything worthwhile.” or maybe they’re actually thinking, “Oh my goodness, this is getting exciting.” The different messages that you send will of course create different emotions and therefore different behaviors. The research shows that as we move towards something and realize we are getting closer to it, we get more excited and more motivated. So the speed at which we take action to achieve the goal actually increases. I love this. And I don’t think it’s something that many loyalty programs really do have a strategy or an understanding of. 

 

Another fascinating lesson was conducting experiments to measure the effect of identical promotions that are presented differently to members. This is similar in my mind to the AB split testing that many digital marketers would typically use. In this research, A car wash loyalty program was tested using a classic stamp card. In the first case, members got a card of eight to fill. So quite simply they have to buy eight car washes and then they get one free at the same time. Some other members were instead given a card that required them to get to 10 washes before they got one free. But in this trial, there was actually already two washes stamped on the card. Clearly, the conditions were similar. In both cases, people needed to buy and complete eight car washes in order to get the free one. But the research shows that buy eight and get one free actually sounds like it’s harder compared to a card that needs 10 stamps, and you’ve already got two for free. Those two free stamps essentially create a false sense of progress at the beginning. But that was so powerful, it resulted in customers visiting their car wash more frequently. And on average, the members with the two stamps given up front came back on average 2.9 days more quickly between every single wash.

 

These are just some of the simple but powerful ideas that Yuping and her team are researching in their Loyalty Science Lab. And it was certainly one of the most fascinating conversations we’ve had on the show. We are planning to have Yuping back on the show very soon to share everything she’s learned in the last year or so. So if you’ve not heard all of her previous insights, make sure to catch up and you can find that episode on letstalkloyalty.com/122. 

 

That’s it for today’s short summary. Tomorrow we are sharing another retail success story. This time from a much-loved brand in the Netherlands called Hema. This department store chain has an incredible heritage of almost a hundred years and its loyalty strategy includes wonderful examples of some of the key principles that drive customer loyalty. Values like simplicity, consistency, and fairness.

 

Then on Thursday, we’re having an interesting conversation about an innovative crypto-based rewards option focused on loyalty programs in the travel and hospitality sector. Flycoin is a new tradeable digital currency, which can be used to reward members with an asset they control, offering a truly web 3.0 approach to driving customer loyalty. And I know it’s a topic that many of you are super curious about. So please do join us again tomorrow. And on Thursday, as we continue to talk all about loyalty.

 

This show is sponsored by The Wise Marketer. The world’s most popular source of loyalty marketing news, insights, and research. The Wise Marketer also offers loyalty marketing training through its Loyalty Academy, which has already certified over 245 executives in 27 countries as certified loyalty marketing professionals. For more information, check out thewisemarketer.com and loyaltyacademy.org

 

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