behavioral science
Customer Engagement

Four Loyalty Lessons from Behavioral Science

Photo by Nathan Dumlao

What we learned from Nudgestock 2018

We recently attended Ogilvy’s spectacular festival of behavioral science, which further discovered the complexities behind human nature and put industry experts in the spotlight. The event put on an incredible show with an array of different speakers from an assortment of different industries and disciplines straight from economics to forensic science to the fast growing internet dating industry.

By Charlie Hills

Here are four key lessons to take as loyalty marketers.

Lesson 1: “Don’t look for rules – look for patterns. Context is key.”
Rory Sutherland
, Vice-chairman at Ogilvy

Data is influential in everyday marketing but can’t be applied in isolation. Contextual relevance is key to understanding the situations, pressures and feelings of your audience. He explained with an anecdote:

“Once I landed at Gatwick and the pilot said, ‘I’ve got bad news and good news. The bad news is we’re not going to get an air bridge because there’s a plane blocking our gate. The good news is that the bus will take you all the way to passport control, so you won’t have far to walk with your bags.”

What loyalty programs can learn: Great member engagement is heavily reliant on the smart application of creativity, data and contextual relevance. Use all three, not just one in developing your loyalty strategies.

For example, Virgin Red, used audience data to identify a need for take-away partner from members. That data told showed that Papa John’s was the perfect partner. Creativity and smart application of contextual relevance meant that they developed a series of compelling rewards and offers for members. Offering a free pizza on England match days during the World Cup was the killer combo of data, creativity and contextual relevance in action.

Lesson 2: “Understand what the evidence means”
Ruth Morgan, Professor of Crime & Forensics

“We are experts at detecting traces, whether that’s gunshot residue or DNA. But to address this problem of misinterpreted evidence, we need to know what the evidence means.”

This segment focused on the importance of evidence and how it is critical to understand where it is coming from and what it actually means, not what we think it means. Often loyalty marketers lack the ability to decipher what the data they have truly means.

What loyalty programs can learn: Invest the time and resource to understand what the data actually means.

Data holds the key to a deep and meaningful engagement with your consumer, which can be ascertained via insight and research. For example, 18 to 24s are far less likely to be members of programs than older age groups. In order to understand the meaning behind that data. However, after digging deeper into data, 18-24s are in fact very interested in and engaged by loyalty programs – but they do not want to carry loyalty cards. So they don’t sign up. They want apps. By offering apps programs can significantly increase sign-up of 18-24s. Demonstrating this “meaning behind the data” offers great actionable insight for loyalty marketers acting as opportunity for future growth.

Lesson 3: “Everyone affects everyone”
Nicholas Christakis – Sol Goldman family professor

If you have Tom, Dick and Harry in a room, whether Dick is friends with Harry, it depends not just on Dick’s genes or on Harry’s genes, but on Tom’s genes.”

The professor emphasized that everyone’s habits affect everybody around them. When focussing on social connections, behavioral research studies suggest that the social effects of people using a product near your social circle can heavily determine your own behavior. Numerous social studies also highlight that brands, which target social groups to share a message, can deliver a far higher ROI than those, which simply just push widespread messages. These studies show that tapping into similarity and clustering can significantly amplify messaging effectiveness.

What are the causes of similarity and clustering?

  • Homophily – the tendency of individuals to associate and bond with similar others
  • Induction – where habits can spread from person to person
  • Context – Sharing exposure to a norm in the same environment

Via changing the rules of a social network or community with a number of ‘nudges’ and through connection, contagion and position, loyalty marketers  can influence behaviour, change norms and spread messages.

What loyalty programs can learn: By building communities which interact, share and even gift points or rewards to each other, marketers can improve program effectiveness.

Lesson 4: ““People are very eliminatory when it comes to dating profiles. Shorter profiles are better.”
Mark BrooksFounder and president of the internet dating excellence association (IDEA)

People are very eliminatory when it comes to dating profiles. Shorter profiles are better.”

Mark highlighted that simplicity, personalisation and tapping into the sub conscious are essential for success in the dating industry; these same principles should be a core focus for loyalty marketers.

He explained less is more. Shorter dating profiles do much better due to the “halo effect” – which suggests that if the initial opinion of the individual is positive then it is more likely you will see them in a similar light in the future. He also attributed the success of the dating industry to tailored experiences, which always keep the user top of mind and keep them at the heart of the experience. And finally to the industry’s ability to tap into the sub-conscious – using the example of Tinder’s extremely compulsive interface and its revolutionary swipe function – as perfect ways to engage the system one part of the human brain.

What loyalty programs can learn: Simplicity, personalization and tapping into the sub conscious should be 3 areas of focus for program.

Loyalty programmes have a lot to learn from behavioural science and our day at Nudgestock merely scratched the surface of the opportunity. We are looking forward to finding out more.

4 lessons for loyalty marketers:

  1. Good member engagement is heavily reliant on the smart application of creativity, data and contextual relevance. Use all three, not just one in developing your loyalty strategies.
  2. Invest the time and resource to understand what the data actually means.
  3. By building communities which interact, share and even gift points or rewards to each other, marketers can improve programme effectiveness.
  4. Simplicity, personalization and tapping into the sub conscious should be 3 areas of focus for programs.

To find out more about Nudgestock 2018 check out https://ogilvy.co.uk/news/nuggets-knowledge-nudgestock-2018.

Charlie Hills is MD & Head of Strategy at Mando-Connect.

Four Loyalty Lessons from Behavioral Science
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