Rewards are provided after an unpredictable number of actions
Description
Rewarding an action after an unpredictable number of events/actions will maximize satisfaction.
This is the mechanism behind slot machines
It's so strong that is the cause of many superstitions
Research:
To be the most successful, loyalty programs should be a combination of fixed interval-schedule, a guaranteed reward each time an action is completed, like reward points as well as Variable-Ratio Schedule. This can be done by offering random exclusive bonuses or promotions or gamification, like giving users a chance to play a virtual slot machine for points. Incorporating the variable-ratio schedule can increase ongoing loyalty program usage by 33%.
Application
Loyalty Programs
Implementing a variable ratio schedule in loyalty programs by offering rewards at unpredictable intervals after a certain number of purchases or actions. For example, a customer might receive a discount or a free product after a random number of purchases, encouraging continuous engagement with the brand without the customer knowing exactly when the next reward will be earned. This unpredictability stimulates more frequent purchases as customers chase the next reward.
Social Media Contests
Running social media contests where winners are chosen at irregular intervals can increase engagement and participation. For instance, a brand might randomly select a post from the past week to win a prize, without specifying how many posts will win or exactly when the winners will be announced. This encourages followers to post more frequently in hopes of winning, boosting the brand's visibility and engagement rates.
Email Marketing
Utilizing a variable ratio schedule in email marketing campaigns by sending special offers, discounts, or exclusive content at unpredictable times. Rather than receiving these benefits after every newsletter or on a predictable schedule, customers receive rewards sporadically. This unpredictability keeps subscribers more engaged and attentive to the brand's emails, anticipating the next surprise offer, thereby increasing the likelihood of opening emails and taking action.
