Goal orientation theories tied to behavioral economics are particularly relevant to loyalty and lifecycle marketing program design. Motivation theory is also extremely relevant. Goal orientation is the good news – humans are predisposed to achieve goals. Lack of motivation is the bad news – it is often very challenging to motivate change in humans.

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Part of the problem is the war between our “should self” and our “want self.” Our Should self knows that choosing the apple over the donut is the best decision relative to long term benefits. However, our Want self is a powerful force pushing us to choose the doughnut. The want self is short term focused – it seeks immediate versus delayed gratification (present bias) and is driven by hedonic motivation (pleasure now, pain later). 

 

So, think of the doughnut as customer behaviors that detract from loyalty – for example, basing purchase decisions solely on price.  And think of the apple as customer behaviors that cultivate loyalty and brand preference – for example, basing purchase decisions on quality or overall value proposition. The challenge is to design marketing programs to create an immediate positive effect that overrides the immediate negative effect (comparatively based on customer perception) associated with choosing the apple over the doughnut. This is often achieved with extrinsic motivators that create the WIFM (What’s-In-It-For-Me).

 

See what else a doughnut can teach you about behavioral economics by downloading our podcast.

Mark Pearson

Vice President, Loyalty Marketing at BI WORLDWIDE
Mark is responsible for multi-channel marketing strategy and solution design. He applies expertise in customer lifecycle, loyalty and interactive marketing to develop programs that leverage behavioral economics and gamification to drive engagement and targeted behaviors. Most programs are deployed online via responsive design, often incorporating social media extension and sales channel integration. Mark has more than 25 years of experience, a BA in English from Gustavus and an MBA in Marketing from St. Thomas.

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