Science tells us that when we’re rewarded, the pleasure pathways in the brain are stimulated and we experience a hit of dopamine that sends us running for the next reward – and the next hit.
Behavioural science, on the other hand, explains our response to the way that rewards are distributed, and the work of American behavioural psychologist, Burrhus Frederic Skinner is of the most interest to reward strategists in this regard.
Simply put, Skinner noted how rats responded when food rewards were distributed according to several different schedules, from continuous reinforcement through to a variable interval schedule. His findings? That the subjects responded best to the variable interval schedule.
What does this mean for employers, channel partners and brand managers? That the brain (be it rat or human) is hard-wired to enjoy random acts of rewarding more than a continuous one. In other words, by introducing a random schedule of rewards to your rewards strategy, you’re on track for success.
Before we look at how to integrate random acts of rewarding into your rewards strategy, let’s pause for a moment to remind ourselves why a good rewards strategy is so important.
In the workplace, an effective rewards strategy can play a pivotal role in attracting the best candidates to a company – and keeping them there. It’s also an outstanding motivational tool with which to encourage performance excellence from employees. In the marketplace, rewards help to build customer loyalty, attract new customers and get consumers talking about your brand.
Getting back to Skinner though, how do his findings translate into an effective rewards strategy? Well firstly, it tells us that using a continuous schedule of reinforcement is an excellent way to encourage repeat behaviour.
Here’s a simple example. I love the loyalty card I have for my favourite coffee spot – the one around the corner from home with the world’s friendliest barista who makes the best cup of coffee in the area (in my opinion, of course). Why do I love it? Because I know that every 11th coffee I order is on the house and besides delivering that sense of delight we feel every time we get something for nothing, I’m convinced it makes my latte taste even better, too!
According to Skinner’s tests, however, I’m eventually going to tire of this rewards schedule. In all likelihood (because I’m a human, not a rat), I will eventually also start complaining about the fact that I have to “spend R280 to get one free coffee!” or be enticed by a new reward at the coffee shop down the road. And that’s why it’s vital to switch things up and use a variable ratio or variable interval schedule to keep your employees or customers guessing once the habit has been entrenched.
It works on the same principle as gambling – the idea that because the next one might be the one, I had better keep pressing the button on that slot machine or placing my bets at the Black Jack table. And that’s exactly how South Africa’s gross gambling revenue amounted to an astonishing R27 billion in 2016!
Just remember: don’t keep customers waiting too long in between rewards – they may start to think the rewards well has dried up. In other words, keep the random acts of rewarding random, but be consistent in the way you do so.
Another idea is to integrate randomness into the reward itself much like messaging app, WeChat did when it launched its mobile wallet in South Africa in late 2015. At the time of the launch, everyone who used the new digital wallet in conjunction with SnapScan, had the chance to get up to 50% percent back (paid into their wallet) with each purchase they made.
Suddenly, buying my coffee became more fun than ever as I no longer had to buy 10 coffees in order to get my 11th free. Now, I could walk away with a latte that cost just R13 instead of the usual R26 I always pay. Why did I love it so much? Because of the thrill of the surprise. How much would today’s coffee cost? R20? R17? R13? That and the fact that with the Double or Nothing functionality, I had the opportunity to increase my savings once again – and again, entirely randomly.
The big takeout: Kick start your rewards strategy by rewarding employees and consumers consistently in order to create a habit. Then, once their loyalty is established, introduce random acts of rewarding to keep them guessing, and they’ll keep coming back for more.
About Candice Ghignone
Candice Ghignone feels incredibly lucky to make a living from playing with words. She has written for numerous well-known brands and plenty of smaller ones, too.