Lotlaty, Engagement, and Changing Behaviors

Transcription

Motivating Riders & Advocates
and Building Loyalty
CHOICE ‒ FIT ‒ REWARDS
Marketing &
Communications Workshop
MARCH 2, 2011
Agenda
• Loyalty, Engagement, and Changing Behaviors
• What is Behavioral Economics?
• Choice
– Relativity
– Anchoring
– Decoys
• Fit
– Connectivity
– Expectations
• Rewards Strategies
– Indulgence guilt
– Goals
• Future Case Study
© 2011 BI BI is a tradename of Schoeneckers Inc. Proprietary & Confidential
2
Loyalty, Engagement, and
Changing Behaviors
Marketing &
Loyalty
Occurs only after you have satisfactorily moved
potential consumers through a labyrinth of
mindsets and choices:
1.
2.
3.
4.
5.
6.
7.
8.
Awareness
Consideration
Intent to purchase
Trial
Validation
Repeat purchase
Loyal Customer
Advocate, Influencer,
Brand Champion
4
Engagement
Engagement requires buy-in; it is a choice,
not an expectation.
5
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
3.
Motivate
4.
Measure
6
What is Behavioral
Economics?
Marketing &
Behavioral Economics
• Economics and Psychology
• Not what we think: it’s what we do
• Understand our illusions and biases
8
Behavioral Economics
Homo Economicus
Homo Sapiens
•
•
•
•
•
•
•
•
•
•
•
Global thinking
Well-defined preferences
Decisions maximize all
alternatives
Rational
Pursues monetary wealth:
Ca$h is King
Local thinking
Preferences are relative
Decisions are cued
Irrational
Social & emotional concerns
Subject to hedonism, guilt,
fairness, social comparison
9
Choice
Marketing &
11
12
Everything is Relative
13
Choice
Behavior Change
• Motivation has many sources
• We are irrational
• Want to vs. Have to
– Want to wins out
• Human Beings live with illusions
– Decision making is relative
14
Choice
Anchoring
• Write down two words:
– Keyboard
– Chocolate
• Write down the last two
digits of your Social Security
number next to each
15
Choice
Like this1
Items
Your SSN
Keyboard
XX
Chocolate
XX
Your Price
16
Choice
Anchoring
How much would you be willing to pay for this
cordless keyboard?
17
Choice
Anchoring
How much would you be willing to pay for this box of
Godiva chocolates?
18
Choice
Anchoring
Keyboard
Chocolates
$60.00
$50.00
$40.00
$30.00
$20.00
$10.00
$0.00
00-19
20-39
40-39
60-79
80-99
Range of last 2 digits of SSN
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Choice
Anchoring
Key Application: The first number influences the
second number
20
Choice
How are you showing value?
• Anchor prices against something
– Was $XX, now $XX
21
Choice
Choices Can Be Cued
22
Choice
Choice
23%
0%
77%
( = 78)
Choice
Decoys
Quality
Expensive, high margin option
Cheap, low margin option
Price
25
Choice
Decoys
Quality
Extreme option
Expensive, high margin option
Cheap, low margin option
Price
26
Choice
Decoys
• Asymmetrical Pricing is Key!
27
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
28
Fit
Marketing &
Fit
Fit Makes it Happen
• Idiosyncratic Fit
• We are more likely to act when we believe the
deal is uniquely good for us.
30
Fit
Credit Card Study
Description
Any Gas &
Grocery Store
Family Friendly Software
5,000 points
31
Fit
Credit Card Study
Description
Any Gas &
Grocery Store
5,000 points
10,000 points
32
Fit
Credit Card Study
Description
Any Gas &
Grocery Store
Your Gas &
Grocery Store
Family Friendly
Software
5,000 points
5,000 points
Family Friendly
Software
10,000 points
10,000 points
33
Fit
Credit Card Loyalty Study
Mean Joining Likelihood (0-10)
7
5.4
(n=44)
6
5
3.8
(n=50)
4
3
3.1
(n=37)
2.2
(n=33)
2
Low (5,000 points)
Program Requirements
High (10,000 points)
34
Fit
• If commuters felt like the offer was uniquely
positioned for them to take advantage
of, they’d be more likely to act on it.
lÉâ‹
35
Fit
Expectations
Which will reduces pain better?
10¢ pill
$2.50 pill
50% cure rate
98% cure rate
36
Fit
Key Application: People are more likely to engage if
they feel they have a unique advantage.
37
Reward Strategies
Marketing &
Rewards
Application
“ The idea of earning
points for rewards for
simply doing what I
usually do is very
appealing.”
39
Rewards
• Indulgence Guilt
– Protestant Work Ethic
• Luxury
– Something I want but won’t pay for myself
• Goals
– Our internal navigation system
– Self selected
40
Rewards
Goals
41
Rewards
Illusionary Goal Progress
10-stamp card
dt = 1
.9
.8
.7
.6
.5
.4
.3
12-stamp card w/ 2 “bonus” stamps
.2
.1
Average completion time: 15.6 days
dt = 1
.92 .83 .75 .67 .58 .50 .42 .33 .25 .17 .08
12.7 days
42
Rewards
Goals
• Key Application: allow
people to feel progress
toward their goal
• Key Application: offer them
a reward for doing
something they would do
anyway
100
120
80
140
40
180
20
200
220
0
TRU BOOST
43
Rewards
Get ‒ Grow ‒ Keep
No
Join
Join
Engage
Engage
Engage
Engage
ReReDefect
engage
Retention
Strategic &
Competitive
Insights
Measurement
& Metrics
Source: “The Behavioral Economics of Choice and Incentives,” Ran Kivetz, PhD Columbia University
44
Rewards
Loyalty Works
52
52%
50
48
46
44
42
40
45%
2010
2011
% Who Join
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
46
Recommended Reading
“Money, as it turns out, is very
often the most expensive way to
motivate people.”
– ~ Dan Ariely, PhD
47
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 it’s wrong. ”
“A monetary reward is
– biologically speaking
– like a tiny line of
cocaine.”
48
Future Case Study:___
Marketing &
Future Case Study
Building a Coalition of the Willing
A success story in the making.
50
Future Case Study
The essence of
coalition marketing:
marketing:
51
Future Case Study
“The whole is greater than
the sum of its parts.”
parts.”
52
Future Case Study
S&H Green Stamps:
1896
53
Future Case Study
AIRMiles::
AIRMiles
10 Million Active Accounts
+66% of Canadian Households active
54
Future Case Study
BoxTops4Education:
34 Billion Tops Redeemed
$340 Million Raised for Local Schools
55
Future Case Study
tree
56
Future Case Study
This is a tree.
tree.
57
Future Case Study
sustainability
58
Future Case Study
This is sustainability.
59
Future Case Study
60
Future Case Study
61
Future Case Study
Where are green consumers?
62
Future Case Study
Look right. Look left.
63
Future Case Study
What connects green consumers?
64
Future Case Study
A common desire, manifested
differently in each person
person..
65
Future Case Study
So what do they want?
66
Future Case Study
Where do I start?
Make it
easy.
Help me make
my own
decisions.
Help me work
within
my budget.
I want to
design my
own
incentives.
And don’t
market to me.
Let me decide
what’s important
to me.
Include me in the
dialogue.
Help me try new
products.
Help me validate
your claims.
67
Future Case Study
Challenge:
My sustainability is not
your sustainability.
68
Future Case Study
Empower
consumers
to
define
sustainability on their terms and then
help them move forward from there
there..
Find Their EcoBonus
69
Future Case Study
70
Future Case Study
71
Future Case Study
72
Future Case Study
73
Future Case Study
Choice = Relevance
74
Future Case Study
To build a coalition, consumers must
also participate and feel they are a
part of the coalition itself.
75
Future Case Study
Key Takeaways
76
Future Case Study
1. Safety in numbers
77
Future Case Study
2. It’s about choice
78
Future Case Study
3. Synergy creates momentum
79
Future Case Study
4. Tap into emotions
80
Future Case Study
5. Every story is different…Give
a voice to them all.
81
Future Case Study
The journey begins.
Earth Day 2011
Find Your EcoBonus in Ridership
82
Thank you,
any questions?
Marketing &

Lotlaty, Engagement, and Changing Behaviors

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