Maintaining consumer motivation in digital loyalty programs

Abstract

Loyalty programs are mainly implemented to build up the relationship between the company and the customer, i.e. to increase the customer loyalty. This has both social and financial benefits for the customer (e.g. feeling of community, discounts, etc.) as well as for the company (e.g. better relationship with customers, increase share-of-wallet, etc.). BrandLoyalty is the global leader in loyalty programmes for food retailers and their partner IceMobile, the company this master thesis is carried out for, is a mobile service provider for food retailers worldwide. The problem they are dealing with is that customers start late with redeeming or do not redeem at all during the collecting period. Prior research studies of Icemobile and theory show that this is dependant of the motivation of the user. Therefore the goal of this master thesis is to explore how consumers’ motivation in digital loyalty programs can be maintained. This report describes and evaluates the extensive user research and literature studies that are conducted and the range of possible design solutions that were generated based on the results of these studies. First an in depth literature study was conducted to create an understanding of how consumer behaviour in a loyalty program influences the motivation of the user. A conceptual framework was created that included factors that directly and indirectly influence motivation. The four main factors, which influence motivation directly, are commitment, progress, emotions and moods. To examine if the behaviour described in literature is similar to actual behaviour, an extensive user research study was conducted. Other goals of the research were to find out if it is possible to form groups and what emotions these groups experience. This study existed of a self-setup loyalty program via Whatsapp with 30 participants that lasted for 3 weeks and which was setup in such a way that it was as similar as possible to a normal program. Results: direct and indirect influences of the conceptual framework were recognised in the actual behaviour. Also, 6 groups of collectors could be identified based on the level of commitment, progress and emotions. Reversal theory (Apter, 2006) was used to examine what behaviour should be adjusted and how this could be done. This showed that users could be helped to be more playful (i.e. enjoyment in the moment) than serious (i.e. Focus on achievement and future goals). Besides this, reversal theory explaind that the user should experience positive emotions that are not too intense. This leaded to the following design goal: “To help the users, who mainly focus on the achievement/reachability in the loyalty program and experience negative emotions in it, to be more excited and less anxious about collecting stamps by creating enjoyment in the moment. Solutions should be directly applicable on the existing application of IceMobile.” The design goal was the starting point for the concept generation. After exploring all possible solutions, according to idea generation techniques, three concept directions were selected that fitted the design goal best and that were feasible in implementing it in the app of IceMobile. In several iterations these were developed into concepts. The three concepts that were developed are: Swipeshare: Implementing the possibility to share stamps in the application Surpris: guiding the user through the process by revealing special stamps on moments they can use it, but in a way that it feels random to them (trigger desired behaviour). Memo: Making the process of collecting more fun by offering games, that will get harder every time, throughout the process of collecting. By doing quick concept evaluation tests, it was concluded that the concept Surpris had the most potential and would therefore be developed into a final concept. Several iterations followed wherein the content of the concept was developed in detail and the concept was applied on actual transaction data, of loyalty programs that were already finished, until it worked like intended. The final concept is a feature in the application that gives special activities to the user the collecting period. There are four types of activities, namely questions, compliments, games and wheel of fortunes. These activities are given on moments users can use it best, but in a way that receiving the activity still feels like a surprise to them. If the user will receive an activity depends on the amount of collecting moments, sometimes he will receive an activity and sometimes he will not. The feature is communicated by Stampie, a character in the form of a stamp, and he will only be available in the app when an activity is offered to the user, otherwise he disappears. The goal of this feature is to mentally help the user through the collecting process and so motivate him to keep collecting. Besides, activities are offered to the user on specific moments and therefore try to trigger the desired collecting behaviour, e.g. buying BSO’s, immediate redeem, etc. To gain insights about how the concept works in an actual loyalty program, an evaluation study was conducted. This study was as similar as possible to the first Whatsapp loyalty program, but was conducted with 10 participants. From this study three recommendations can be given: Do another evaluation test in the actual app or a test whereby the user experience of the app is as equal as possible. Most important is to test if Stampie will be seen as a bigger help when he is animated (i.e. when he will stand in your screen and wave to attract attention) than when he is a static character. The purpose behind the games can be improved because this was not totally clear yet. Stampie could also communicate about other topics than BSO’s and rewards, like how to convert, the duration of the program, etc. This because people mentioned they liked it that Stampie reminded them about things like the duration of the program. These recommendations show that the final concept should still be further developed before it is actually implemented.