When you do something and get rewarded for it, it always feels better than when you don’t (no surprise!). So what if you could reward your customers when they shop to make them feel great and, in turn, encourage them to spend more at your store? That’s what reward psychology can do for your brand.
There are simple, straightforward ways to spark a good feeling in people when they interact with your business — whether it’s through support, while shopping, or when they receive what they purchased, among other opportunities.
And when done strategically, these tactics can all help increase your bottom line. Specifically, this is a path to more repeat purchases, higher average order values (AOV), and solidifying connections with each of your customers.
What is reward psychology and how can you leverage it?
The basic tenet of reward psychology is that, if you understand how your customer thinks and what they want, you can give them what they want to encourage certain behaviors — i.e., joining, buying, engaging, and sharing.
To leverage this, you first have to know what your customers want and/or you can use positive reinforcement to influence your audience’s mindset and help drive your desired behavior. For instance, you can encourage a habit of purchasing regularly by rewarding that behavior every time they buy with a discount or gift (hello, Donate for Discount campaign from Shop for Good!).
How brands can use reward psychology to drive sales and more
Giving back is not one-size-fits-all: it should be tailored to your audience and your goals, just like your reward system. Luckily, there are different ways to connect with consumers, drive revenue, and impact the world throughout the year to keep things fresh.
Donate for Discount
Instead of just donating a percentage or fixed amount of your sales to charity, you can use reward psychology to incentivize your customers to donate to your favorite charities as you reward them through a discount on their order (a.k.a. positive reinforcement).
So what specific results can you expect when you implement the Donate for Discount campaign from Shop for Good in your store?
- Intimate feminine apparel brand Felina experienced a 14% jump in AOV in one week
- Gourmet dog bakery Bubba Rose saw its AOV increase by 16%
- John Masters Organics enjoyed a 17.5% increase in AOV during a 36-hour campaign
- Socially conscious brand Charged Jewelry has seen a consistent 29% increase in AOV month over month just by implementing this campaign
- Feminine apparel brand Ivory Ella experienced a 61% rise in AOV and engagement over just a few days. Furthermore, within 24 hours, Ivory Ella raised nearly $5,000 for Save the Elephants through customer donations (the goal was around $1,500 based on other campaigns/brands they’ve worked with before). Ivory Ella found that 55% of all orders on that day opted to donate for a discount and 29% chose to round up their order to the nearest dollar for charity (the benchmark was 6-10%). In just 24 hours, the brand got 840 total orders (a 45% increase from the day before) and a 65% increase in conversion rate. As one of the co-founders stated: “For the first time, we were certain our customers cared about our cause. Shop for Good proved that.”
Donate for Discount leverages existing consumer shopping behavior to not only drive donations for charities but also provide value for retailers as well as charities. Shop for Good was created to allow brand partners to meet their customers where they are — shopping at their online stores.
The beauty of Donate for Discount is that not only are you rewarding positive behavior (with a discount in exchange for the donation), but also you’re engaging in reciprocity. You know — what friends and family do for each other! Except that now you’re engaging in an emotional, reciprocal relationship with your customer.
Waiters do it by bringing a mint with your check in hopes of earning a bigger tip. And you can use Donate for Discount to build goodwill with your audience while helping charities and increasing sales. Besides, the Donate for Discount campaign is known to boost AOV by up to a whopping 61%. How could it get any better?
Another way to energize engagement is by using a rewards program where people accumulate points and can use them toward incentives such as a big discount, exclusive experiences, free shipping, or free products when they reach a particular threshold. You might have taken part in a point system when shopping at stores including Sephora, Macy’s, and Dr. Axe.
How can your customers accumulate points? That’s up to you (and part of the fun!) Here are some examples:
- Leaving reviews (Thrive Market gives you a $1 discount per review when you review eligible products)
- Referring friends (Google Fi gives both you and the friend you refer $20)
- Making purchases (Sephora, Macy’s)
- Even providing excellent support can be considered positive reinforcement (Thrive Market and Amazon are both known for taking good care of their customers)
These types of exchanges strengthen the emotional connection between your business and each individual customer and inspire confidence in your brand, thereby building loyalty — which is perhaps the best long-term strategy you can have.
An all-in-one tool to implement a points program is Smile.io, which allows you to build a rewards program with flexibility and strategy while taking a more advanced long-term view of your relationship with your customers and how you want to shape it over time. And, yes, Shop for Good by DailyKarma now integrates with Smile!
Smile.io lets you maximize the effectiveness of positive reinforcement tactics by entering them into a well-crafted rewards framework that takes customers by the hand and walks them through the behaviors you’d like them to take — from referring friends to leaving reviews and making purchases more frequently.
Gifts with every order
A simple way to make your customers feel like VIPs? Give them free stuff with their order! It doesn’t have to be expensive — even something small and inexpensive can have a high perceived value and turn your customers into raving fans.
Here are some examples of what brands are shipping out for free with every order to help you come up with something amazing for your people:
- Makeup and skincare company Glossier ships out free stickers and a travel-sized makeup bag
- Society6 sends you free stickers
- Thrive Market allows you to select a free sample as well as a free item based on your order amount
- Natural skincare brand Blissoma ships you a skincare sample
Small rewards like these go a long way to make customers feel cared about and valued by your business — and automatically make them want to return the favor by continuing to buy from you and sharing news of your generosity with their friends. Free products encourage engagement, help guarantee satisfaction, and heighten your program’s sense of fun.
When a customer sees the free sticker or bottle that you sent them, even long after having made the purchase, it reinforces their good feeling about the purchase decision and makes it increasingly likely they will buy from you again rather than going to a competitor.
As your customers take action and experience the positive reinforcement of rewards through your brand, you are deepening your relationship with these individuals and increasing their loyalty. Not only that, but you’re also promoting in them the habit of shopping at your store to earn a reward, and the associated satisfaction that comes with it helps make this an addictive cycle.
Positive reinforcement is its own reward
By now you can see the immense value in using reward psychology to charm, engage, and bond with your customers. It’s a thoughtful, good-feels-inducing approach to encourage behavior that will pay your brand back in spades and even over the long term. You can even throw give-back campaigns into the mix (ahem, through Shop for Good)!
Opportunities abound to make your business stand out, nourish an emotional connection, and grow your relationship with your audience throughout various touchpoints. And it’s all worth it — not just because it feels good, but also because of the monetary gain that will allow your brand to flourish into the future.
Reward psychology is a give-and-take tool that can lead to increased sales, brand recognition, customer loyalty, referrals — you name it. How will you use it?