Shock and Awesome: Why surprise rewards work
By Caitlin Whitehurst, Staff Writer and Social Media Manager, COLLOQUY
Through a special arrangement, what follows is a summary of an article from COLLOQUY, provider of loyalty marketing publishing, education and research since 1990.
In 2000, Neil Gussman was making frequent business trips to Asia. He was flying with Cathay Pacific and was enjoying business class tickets courtesy of his employer.
"One day I got a blue slip in the mail that entitled me to a class upgrade on any trip on any partner airline," recalls Mr. Gussman. He cashed in the surprise reward for an upgrade to first class — his first time in first — during an 18-hour trip to Hong Kong. "It was lie-flat bed wonderful!" he said.
Surprise rewards work as long as two conditions are met, said Dr. Josh Klapow, chief behavioral scientist for ChipRewards, an incentive an engagement company. They work if they are novel to the individual and they are reinforcing and rewarding.
The following are three examples of how major brands bring unexpected pleasures to their loyalty members:
- In January 2010, Expedia surprised a control group of its Elite Plus members with a $100 coupon. Only 10 percent of those receiving the coupon used it, but the entire group increased its transaction with Expedia by nearly 10 percent.
- Guests enrolling in the new Caribou Coffee’s Perks program earn a free medium drink for registering. Members who opt-in to receive email or text messages are notified each time they earn rewards, which Caribou says will always be a surprise. Rewards may include a beverage size upgrade, an item from the bakery case or a favorite Caribou drink.
"We feel the ‘surprise and delight’ model aligns well with the personality of the Caribou brand, which focuses on making our coffeehouses feel comfortable and cozy, and doesn’t take ourselves too seriously," Michele Vig, Caribou’s vice president of marketing, said in an email. "Additionally, we’ve found that not every guest wants the same reward, so offering a free latte when a guest reaches a certain amount of points isn’t going to be attractive and rewarding by everyone."
- Under its Priceless Surprises program launched earlier this year, MasterCard customers who tweet under #PricelessSurprises have the chance to be treated to an escalating tier of awards such as speakers, headphones, music downloads, free Uber transportation and a day with Justin Timberlake. Surprises are based on the customer’s day-to-day card use and social media interaction.
"With a ‘surprise’ it truly becomes about the individual and his or her experience and that’s where we want to play as a brand," said Lilian Tomovich, SVP of consumer marketing at MasterCard. "It’s not about one size fits all or reaching the masses, but rather how we touch our cardholders individually in a way that is meaningful to them."
Should unexpected rewards be a much larger part of retailers’ loyalty rewards efforts? What type of “surprise-and-delight” tactics would work at retail?