Stop Trying To Create Loyalty, Start Creating Habits

Loyal customers are the holy grail of brands, but loyalty isn’t something you can manufacture with offers and coupons. Indeed, many consumers are enrolled in more than 20 loyalty programs but are only active in half of them.

Loyalty programs are often ineffective because they’re built primarily on gut instinct, research and customer data. True innovation, however, is also propelled by science. Material’s 3-part Habit framework incorporates behavioral context, cues, and reinforcers to understand why and how people make certain decisions, and how in turn, those habits lead to loyalty.

Collette Eccleston, Senior VP of Material’s Behavioral Science Team, and Ben Gaddis, Senior Partner at Material, explain how to avoid wasting time coaxing consumers into behaviors that don’t reflect their motivations and goals, and how Material’s framework enables brands to anticipate the habits that lead to loyalty.

Why are habits at the core of loyalty?

Collette: In our research, we ask people to describe details around a particular situation so we can see what the co-occurrences are and what’s likely to be the trigger for a particular action. If someone is consistently snacking at night, for example, there is very likely something that’s triggering that behavior. We know, for example, that emotions can be big triggers but they are hard for people to detect on their own.

Ben: At Material, we have a great capability with our Habits Framework, which shows us that if you want a path to loyalty you need to create habits and reach the point where consumers see themselves in the brand.

Why is it so important to understand cues when building loyalty?

Collette: Our framework focuses on cues or triggers that lead to behaviors that get executed in a particular way. These behaviors might be specific to a particular time, and lead to an emotional or financial benefit that is reinforced, and over time the behavior becomes automatic.

For example, when I lived in NY, I used to subscribe to MealPal. I would receive notifications of lunch options for the day in the morning. I’d check my calendar, see what meetings I had, how far I had time to walk, and choosing my lunch became incorporated into my general planning of my day. Before MealPal, there would be days that I would get really busy and would forget to order and thus eat lunch. But with MealPal, I got in the habit of thinking about my lunch as part of planning out my day.

However, if a brand tries to start something entirely from scratch instead of becoming part of a wheel that’s already in motion — which is when the habit will become stronger — then the loyalty program won’t be successful.

Ben: Most loyalty programs don’t have a process to really understand cues. For example, we know people order pizza around NFL games and that they want the pizza to arrive before the game starts so it’s not disruptive. It’s a question of making it as easy as possible for that to happen. When we worked with a major pizza chain, we asked their consumers to click on the logo of their favorite football team, and we pulled in the NFL schedule to know what time they’d be watching a game. We knew that customers needed to order three hours in advance to receive their pizza before game time, so we sent out an email or push notification three hours before the game. We automated that entire experience and the conversion rates have been astronomical.

What role do reinforcers play in the loyalty process?

Collette: You need to consider the positive or negative reinforcement that consumers get from the habit. With MealPal, for example, I didn’t end up wasting an hour to find lunch and then not have time to eat it. Some of those things are not super obvious because the absence of something is harder for people to notice, so brands need to highlight how their process is seamless. Then if we look one step further, we can think about how deeper motivations might cue or trigger the consumer.

Ben: Maybe the ultimate goal for a pizza brand would be for the pizza to show up without the football fan even needing to order it, following the model of subscription boxes and stuff like Dollar Shave Club. A loyalty program is much more likely to be successful because it is built with an understanding of what people actually do, and how the brand can fit into their lives.

How does this all ultimately benefit brands?

Collette: If a consumer is just starting to use a loyalty program or only uses it occasionally, that doesn’t really strengthen their connection to a brand. Ultimately that loyalty program should be leading consumers to have a sense of oneness with the brand, a sense of overlap with the brand over time. If there is a psychological connection, that the person automatically thinks of the brand when they think of or engage in the category, then less work will be required of the brand to keep the customer loyal.

Ben: The more a brand fits in with consumers’ lives and provides value, the more the consumer sees the brand as a part of their identity. In our experience working with brands, that’s the combination that leads to true loyalty.

Takeaways

• Anticipate consumer needs to cue behaviors that become automatic.
• Focus on understanding the consumer’s life and values instead of attempting to instill a new behavior that doesn’t fit with their motivations and goals.
• Remember that it’s a win for brands when consumers avoid a lengthy thought process, their behavior becomes ingrained, and a product or service is seamlessly integrated into their lives.