motivating riders & advocates and building loyalty · 2011-10-21 · motivating riders & advocates...

Motivating Riders & Advocates

and Building Loyalty

CHOICE FIT REWARDSCHOICE FIT REWARDS

MARCH 2, 2011

Marketing &

Communications Workshop

Agenda

Loyalty, Engagement, and Changing Behaviors

What is Behavioral Economics?

Choice

Relativity

Anchoring

Decoys

Fit Fit

Connectivity

Expectations

Rewards Strategies

Indulgence guilt

Goals

Future Case Study

2 2011 BI BI is a tradename of Schoeneckers Inc. Proprietary & Confidential




Marketing &


Loyalty

Occurs only after you have satisfactorily moved potential consumers through a labyrinth of mindsets and choices:

1. Awareness

2. Consideration

3. Intent to purchase3. Intent to purchase

4. Trial

5. Validation

6. Repeat purchase

7. Loyal Customer

8. Advocate, Influencer, Brand Champion


Engagement

Engagement requires buy-in; it is a choice, not an expectation.


Changing Behaviors

Whether your goals are to increase ridership, create more loyal customers, or to engage your employees; there are four pillars that must be solidly in place:

1. Communicate

2. Educate


2. Educate

3. Motivate

4. Measure




Marketing &


Behavioral Economics

Economics and Psychology

Not what we think: its what we do

Understand our illusions and biases Understand our illusions and biases


Behavioral Economics

Homo Economicus Global thinking

Well-defined preferences

Decisions maximize allalternatives

Rational

Pursues monetary wealth: Ca$h is King

Homo Sapiens Local thinking

Preferences are relative

Decisions are cued

Irrational

Social & emotional concerns

Subject to hedonism, guilt, fairness, social comparison


ChoiceChoice


Marketing &


Everything is Relative


Choice

Motivation has many sources

We are irrational

Behavior Change

Want to vs. Have to

Want to wins out

Human Beings live with illusions

Decision making is relative


Choice

Anchoring

Write down two words:

Keyboard

Chocolate

Write down the last two Write down the last two digits of your Social Security

number next to each


Items Your SSN Your Price

Keyboard

Choice

Like this1

XXKeyboard

Chocolate

XX

XX


Choice

Anchoring

How much would you be willing to pay for this

cordless keyboard?


Choice

Anchoring

How much would you be willing to pay for this box of

Godiva chocolates?


Choice

Anchoring

$40.00

$50.00

$60.00

Keyboard Chocolates

Range of last 2 digits of SSN

00-1920-39

40-39

60-79

80-99

$0.00

$10.00

$20.00

$30.00


Choice

Anchoring

Key Application: The first number influences the

second number


Choice

How are you showing value?

Anchor prices against something

Was $XX, now $XX


Choice

Choices Can Be Cued


Choice

Choice

77%

23%

( = 78)

0%

Choice

Quality

Decoys

Expensive, high margin option

Cheap, low margin option

Price25 2011 BI BI is a tradename of Schoeneckers Inc. Proprietary & Confidential

Choice

Quality Extreme option

Decoys

Price

Expensive, high margin option

Cheap, low margin option


Choice

Asymmetrical Pricing is Key!

Decoys


Choice

Application

Restaurants: $50.00 Kobe burgers on menu make $20.00 burger look like a good deal.

Airlines: First Class pricing makes Business Class look like a bargain.

Quality

Extreme

option

Expensive, high

margin option

Cheaper, low

margin option

Price


FitFit


Marketing &


Fit

Fit Makes it Happen

Idiosyncratic Fit

We are more likely to act when we believe the deal is uniquely good for us.


DescriptionAny Gas &

Grocery Store

Family Friendly Software 5,000 points

Fit

Credit Card Study




Grocery Store


Fit

Credit Card Study





Grocery Store

Your Gas &

Grocery Store

Family Friendly 5,000 points 5,000 points

Fit

Credit Card Study

Family Friendly

Software5,000 points 5,000 points

Family Friendly

Software10,000 points 10,000 points


Fit

Me

an

Jo

inin

g L

ike

lih

oo

d(0

-10

)7

6

5

5.4

(n=44)

Credit Card Loyalty Study

Program RequirementsLow (5,000 points)

Me

an

Jo

inin

g L

ike

lih

oo

d

5

4

3

2

2.2

(n=33)

3.1

(n=37)

3.8

(n=50)

High (10,000 points)


Fit

If commuters felt like the offer was uniquely positioned for them to take advantage

of, theyd be more likely to act on it.


llllllll

Fit

Expectations

Which will reduces pain better?

10 pill $2.50 pill

50% cure rate 98% cure rate


Fit

Key Application: People are more likely to engage if

they feel they have a unique advantage.


Reward StrategiesReward Strategies


Marketing &


Rewards

The idea of earning points for rewards for simply doing what I usually do is very appealing.

Application


Rewards

Indulgence Guilt

Protestant Work Ethic

Luxury

Something I want but wont pay for myself

Goals

Our internal navigation system

Self selected


Rewards

Goals


Rewards

Illusionary Goal Progress

10-stamp card 12-stamp card w/ 2 bonus stamps

1 .9 .8 .7 .6 .5 .4 .3 .2 .1 1 .92 .83 .75 .67 .58 .50 .42 .33 .25 .17 .08dt = dt =

Average completion time: 15.6 days 12.7 days


Rewards

Key Application: allow people to feel progress

toward their goal

Goals

Key Application: offer them a reward for doing

something they would do

anyway

0

20

40

80

100 120

140

180

200

220

TRU BOOSTTRU BOOST


Rewards

Get Grow Keep

EngageEngageReRe--

DefectDefectNo No

JoinJoin EngageEngage EngageEngage EngageEngage


EngageEngageReRe--

engage engage DefectDefect

No No

JoinJoinJoinJoin

Strategic &

Competitive

Insights

Measurement

& Metrics

EngageEngage EngageEngage EngageEngage

Retention

Source: The Behavioral Economics of Choice and Incentives, Ran Kivetz, PhD Columbia University

48

50

52

Rewards

Loyalty Works

52%52%

40

42

44

46

% Who Join

20102011

45%45%


Academic References

Dan Ariely, PhD Relativity

Dan Ariely, PhD & George Lowenstein, PhD Expectations

Dan Kahneman PhD & Amos Tversky PhD Anchoring

Ran Kivetz, PhD Decoys, (Idiosyncratic) Fit, Goal progress

Ran Kivetz, PhD & Itamar Simonson, PhD Indulgence guilt


Recommended Reading

Money, as it turns out, is very

often the most expensive way to

motivate people.motivate people. ~ Dan Ariely, PhD


Additional Reading

Our actual decision making does not keep

up with how well we

think we make

decisions.

The problem with

rational thinking is

that its wrong.

A monetary reward is

biologically speaking

like a tiny line of

cocaine.


Future Case Study:___Future Case Study:___


Marketing &


Future Case Study

Building a Coalition of the WillingBuilding a Coalition of the WillingA success story in the making.A success story in the making.


Future Case Study

The The essenceessence of of

coalition marketingcoalition marketing::


coalition marketingcoalition marketing::

Future Case Study

The whole is greater than The whole is greater than

the sum of its partsthe sum of its parts..


the sum of its partsthe sum of its parts..

Future Case Study

S&H S&H Green Stamps:Green Stamps:18961896


18961896

Future Case Study

AIRMilesAIRMiles::10 Million Active Accounts10 Million Active Accounts

+66% of Canadian Households active+66% of Canadian Households active


+66% of Canadian Households active+66% of Canadian Households active

Future Case Study

BoxTops4Education:BoxTops4Education:34 Billion Tops Redeemed34 Billion Tops Redeemed

$340 Million Raised for Local Schools $340 Million Raised for Local Schools


$340 Million Raised for Local Schools $340 Million Raised for Local Schools

Future Case Study

treetree


Future Case Study

This This is a treeis a tree..


Future Case Study

sustainabilitysustainability


Future Case Study

This is sustainability.This is sustainability.


Future Case Study


Future Case Study

Where Where are green consumers?are green consumers?


Future Case Study

Look right. Look left.Look right. Look left.


Future Case Study

WhatWhat connectsconnects greengreen consumers?consumers?


Future Case Study

AA commoncommon desire,desire, manifestedmanifested

differentlydifferently inin eacheach personperson..


differentlydifferently inin eacheach personperson..

Future Case Study

So what do they want?So what do they want?


Where do I start?Where do I start?

Future Case Study

Help me make

my own

decisions.

Help me make

my own

decisions.

Make it

easy.

Make it

easy.

Include me in the

dialogue.

Include me in the

dialogue.Help me work

within

Help me work

within


I want to

design my

own

incentives.

I want to

design my

own

incentives.

Help me validate

your claims.

Help me validate

your claims.

Let me decide

whats important

to me.

Let me decide

whats important

to me.

Help me try new

products.

Help me try new

products.And dont

market to me.

And dont

market to me.

my budget.my budget.

Future Case Study

Challenge:Challenge:My sustainability is not My sustainability is not

your sustainability.your sustainability.


your sustainability.your sustainability.

Future Case Study

EmpowerEmpower consumersconsumers toto definedefinesustainabilitysustainability onon theirtheir termsterms andand thenthenhelphelp themthem movemove forwardforward fromfrom therethere..


helphelp themthem movemove forwardforward fromfrom therethere..

Find Their EcoBonus

Future Case Study


Future Case Study

Choice Choice = Relevance= Relevance


Future Case Study

To build a coalition, consumers mustalso participate and feel they are apart of the coalition itself.


part of the coalition itself.

Future Case Study

Key Takeaways


Future Case Study

1. Safety in numbers


Future Case Study

2. Its about choice


Future Case Study

3. Synergy creates momentum


Future Case Study

4. Tap into emotions


Future Case Study

5. Every story is differentGive

a voice to them all.


a voice to them all.

Future Case Study

The journey begins.

Earth Day 2011


Earth Day 2011

Find Your EcoBonus in Ridership

Thank you,any questions?

Thank you,any questions?


Marketing &


motivating riders & advocates and building loyalty · 2011-10-21 · motivating riders & advocates...

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