Most people would have clicked the above button by now.
If you clicked the above button before reading this, you have probably felt the neurological temptation to see what you won. If not, we hope you can understand that most individuals would feel a need to press the button in the hopes of getting some kind of reward (be it a sensation of winning or a hope for a material prize).
Reward Based Marketing
What is it: Reward Based Marketing is a tactic that utilizes dopamine production and exploits feelings of pleasure in order to generate attention or profits.
Where it works best: It tends to work best for attracting attention to your site by tricking potential customers into clicking an ad through the use of games. For example you might have a button with the text above it “click 20 times in 10 seconds to win.”
It also works well for generating purchases. For example stores have scratch-and-save sales where you essentially have a chance at a 10%, 20%, or 100% discount (or something similar). While 99% of people may only get the 10% discount, many individuals will purchase more in hopes that they will get the 100% one.
This tactic is also useful in maintaining customers via “rewards-point” programs. Every time a customer makes a purchase you give them rewards points which can be redeemed for prizes or future discounts.
How you can use it: If you have a product or service that is difficult to advertise, you can use a game-based advertisement in order to attract potential customers. For example, you might have a banner with a ‘pong’ type game that says “first to 3 points wins.” Many individuals viewing the banner on a site will feel compelled to play the small mini-game in order to receive the psychological reward from winning. At this point they get sent to your website with a congratulations message and information on your product.
Another method of utilizing this form of marketing is to have luck-based discount events or contests in order to generate profits. For example you might hold a contest to win a new 3d plasma TV, where every $100 spent gives a customer a ballot in the lottery draw. This would entice individuals to spend more in hopes that they win the TV. A real life application of this tactic is McDonalds’ monopoly games. When you purchase certain foods you get monopoly properties (small pieces of paper), and if you collect sets of them you can turn them in for prizes. This collection-based method is extremely successful at enticing people to purchase more since they experience part of a win (having 2 out of 3 properties) compelling them to attempt to experience the full win (getting the third property which they often don’t realize is rare).
A third way to use this marketing technique is to offer reward points with every purchase, and randomly give customers bonus points. These points will psychologically pressure customers to continue to purchase your products since they feel like if they don’t, their accumulated points will go to waste. Further, the bonus points generate a feeling of pleasure which customers will want to experience again (see the neuroscience section).
The result: If you mange to successfully utilize reward based marketing you will be able to attract new customers, generate more profits, and retain your customers while creating customer loyalty. A Light in the Rain ltd. can help you maximize the effect of this technique and lead your business to success.
The Neuroscience:
The reason this marketing tactic works is a result of evolutionary stresses. Reward systems allow for a species to ensure they commit to necessary functions such as eating, drinking, reproduction, competition, etc. Thus, humans in general want to receive rewards and avoid punishments. Winning as opposed to losing is a type of reward that often comes with benefits. The psychological benefit is largely due to the release of dopamine (a neurotransmitter) which then activates receptors (a type of protein), which interact with parts of the brain creating the emotion of pleasure. The material benefit is often the acquisition of something of value (e.g. reward money) and further contributes to the psychological benefit.
This reward system is far from simple however. Wolfram Schultz [See Wolfram Schultz], a neuroscientist at Cambridge University has done various studies in this field and has shown that we learn to predict awards. He used an experiment with monkeys to demonstrate this, by shining a light at them, waiting a few seconds, and then squirting a few drops of apple juice into their mouth (monkeys apparently love apple juice). At first, dopamine neurons did not become excited until the reward (apple juice) was given, but overtime as the monkeys learned that the light precedes the award, the neurons began to become excited at the shining of the light rather than the reception of the reward. Conversely, if a light was shined and no reward received, the monkeys dopamine neurons would stop firing and their expectation of receiving a reward when a light is shined would decrease (and with it the chance of neurons firing prior to the reward). However, when monkeys were given a reward randomly and did not expect it, their dopamine neurons fired three to four times more than an expected reward. Casinos use this knowledge to create gambling games that entice individuals to continue. You can use this knowledge to attract new customers, increase customer purchases, and retain your customers (as explained in this blog post).
This is a very simplistic explanation and only just touches the surface of reward based marketing. A Light in the Rain ltd. can use this technique to help you build a brand, ensure people remember your business, convince people that they will be happiest purchasing from you, and increase your success in many other ways.
Sources Cited / Further Research:
Wolfram Schultz – http://www.neuroscience.cam.ac.uk/directory/profile.php?Schultz (most articles are not free)
Copyright A Light in the Rain Ltd. 2011