Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Why offer promotional bonuses? New study shows how (fake) progress can motivate customers

31.01.2006


An important new study explores the impact of artificial bonuses on customer loyalty. For example, putting a few extra "bonus" stamps on a frequent-buyer card – instead of just requiring more purchases in the first place – leads to an artificial feeling of advancement towards a goal…and repeat business. In a forthcoming paper in the Journal of Consumer Research, this phenomenon is termed the "endowed progress effect."



"The endowed progress effect we document is shown to affect the attractiveness of a program to consumers, their perceived likelihood of joining a program, and their expectations of purchasing enough to earn the reward," explain Joseph C. Nunes (University of Southern California) and Xavier Drèze (University of Pennsylvania).

In other words, people are more likely to join and stay loyal to a program if they feel like they are consistently making progress. Nunes and Drèze show this in several scenarios, and also examine the motivational source of these reactions, finding that the dollar value of the bonus is not nearly as important as what fraction of the promotion is completed by the bonus. The critical distinction between whether a program works or not has more to do with consumers perceiving that they are moving along closer toward the goal rather than estimating their losses if they discontinue.


The researchers also point out that the effect is dependent on critical factors such as the reason for the endowment, or bonus. "When there is no reason offered," they explain, "the effect only occurs if the endowment is issued in an alternative currency such as points. However, when progress is recorded in the number of purchases made, the firm must offer a reason for the endowment, even a specious one."

Suzanne Wu | EurekAlert!
Further information:
http://www.uchicago.edu

More articles from Studies and Analyses:

nachricht A sudden drop in outdoor temperature increases the risk of respiratory infections
11.01.2017 | University of Gothenburg

nachricht Urbanization to convert 300,000 km2 of prime croplands
27.12.2016 | Mercator Research Institute on Global Commons and Climate Change (MCC) gGmbH

All articles from Studies and Analyses >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Interfacial Superconductivity: Magnetic and superconducting order revealed simultaneously

Researchers from the University of Hamburg in Germany, in collaboration with colleagues from the University of Aarhus in Denmark, have synthesized a new superconducting material by growing a few layers of an antiferromagnetic transition-metal chalcogenide on a bismuth-based topological insulator, both being non-superconducting materials.

While superconductivity and magnetism are generally believed to be mutually exclusive, surprisingly, in this new material, superconducting correlations...

Im Focus: Studying fundamental particles in materials

Laser-driving of semimetals allows creating novel quasiparticle states within condensed matter systems and switching between different states on ultrafast time scales

Studying properties of fundamental particles in condensed matter systems is a promising approach to quantum field theory. Quasiparticles offer the opportunity...

Im Focus: Designing Architecture with Solar Building Envelopes

Among the general public, solar thermal energy is currently associated with dark blue, rectangular collectors on building roofs. Technologies are needed for aesthetically high quality architecture which offer the architect more room for manoeuvre when it comes to low- and plus-energy buildings. With the “ArKol” project, researchers at Fraunhofer ISE together with partners are currently developing two façade collectors for solar thermal energy generation, which permit a high degree of design flexibility: a strip collector for opaque façade sections and a solar thermal blind for transparent sections. The current state of the two developments will be presented at the BAU 2017 trade fair.

As part of the “ArKol – development of architecturally highly integrated façade collectors with heat pipes” project, Fraunhofer ISE together with its partners...

Im Focus: How to inflate a hardened concrete shell with a weight of 80 t

At TU Wien, an alternative for resource intensive formwork for the construction of concrete domes was developed. It is now used in a test dome for the Austrian Federal Railways Infrastructure (ÖBB Infrastruktur).

Concrete shells are efficient structures, but not very resource efficient. The formwork for the construction of concrete domes alone requires a high amount of...

Im Focus: Bacterial Pac Man molecule snaps at sugar

Many pathogens use certain sugar compounds from their host to help conceal themselves against the immune system. Scientists at the University of Bonn have now, in cooperation with researchers at the University of York in the United Kingdom, analyzed the dynamics of a bacterial molecule that is involved in this process. They demonstrate that the protein grabs onto the sugar molecule with a Pac Man-like chewing motion and holds it until it can be used. Their results could help design therapeutics that could make the protein poorer at grabbing and holding and hence compromise the pathogen in the host. The study has now been published in “Biophysical Journal”.

The cells of the mouth, nose and intestinal mucosa produce large quantities of a chemical called sialic acid. Many bacteria possess a special transport system...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

12V, 48V, high-voltage – trends in E/E automotive architecture

10.01.2017 | Event News

2nd Conference on Non-Textual Information on 10 and 11 May 2017 in Hannover

09.01.2017 | Event News

Nothing will happen without batteries making it happen!

05.01.2017 | Event News

 
Latest News

Water - as the underlying driver of the Earth’s carbon cycle

17.01.2017 | Earth Sciences

Interfacial Superconductivity: Magnetic and superconducting order revealed simultaneously

17.01.2017 | Materials Sciences

Smart homes will “LISTEN” to your voice

17.01.2017 | Architecture and Construction

VideoLinks
B2B-VideoLinks
More VideoLinks >>>