Loyalty 3.0: Whoever Figures Out Motivation Wins

After reading this chapter and thinking about my life, I’ve realized that winning is something I like to do. In the case of my life, sports and competition has always been the foundational place where I find myself desiring to win. In the case of customer loyalty, motivation apparently is the winner.

But why is it the winner?

In my personal life, motivation seemed to only last so long. It seemed like I would get motivated to do something — most likely at two in the morning, I would brainstorm really big ideas, and get super pumped about it — and then nothing would result from it. It took a little bit more than motivation for me to ever accomplish something. It seems like to be motivated is the initial step, and then hard-work and dedication, and even sometimes an accountability partner, are the only true things to get you going in the right direction.

But that is not the case in customer loyalty. Or maybe it is.

In Loyalty 3.0 Paharia talks a lot about the importance of motivation. She goes so far to say that motivation is the key to winning. But, winning what?

Well, winning over your customer, of course!

Normally, I would not give away the secret to the game. I would not tell you our team’s best plays and our biggest weaknesses. But Paharia has already told the secrets of winning your customer loyalty and keeping them motivated in their loyalty. So, I’ll let you in on the secret.

In the beginning of the chapter, Paharia (2013) defines motivation as, “internal and external factors that stimulate desire and energy in people to be continually interested in and committed to a job, role or subject and to exert persistent effort in attaining a goal”(p.23).

This is a lot of smart words that basically mean ‘things that keep people interested’.

To start untying her definition of motivation, we will first look at internal and external factors. In her explanation of these factors, she renames them. She talks about intrinsic and extrinsic motivators. (Which is basically the same thing as internal and external).

First, intrinsic motivators are internal motivators. Paharia (2013) defines this as, “initiating an activity for its own sake because it is interesting and satisfying”(p. 25). You would do something because you are actually personally interested by it. You would find personal interest in it because you enjoy it, are curious about it, or are passionate about it.

Second, she describes extrinsic motivators as external motivators. They are, “external forces [that are] influencing, motivating, or requiring you to do something”(Paharia, 2013, p.25). The reason that you would be completing the task if you were motivated extrinsically is because your boss offered you a pay raise, a bonus, vacation time, or a prize.

Neither of these are bad motivators. They are just different.

Paharia dives in deep when talking about intrinsic motivators. She lists five main motivators that tend to be the root of intrinsic motivations. She listed autonomy, mastery, purpose, process, and social connection (Paharia, 2013, p.31–35). She tends to write most about social connection. Social connection is so important for people and there are ways that businesses can facilitate this for their customers.

When thinking of social connection, businesses often create loyalty programs. According to Kim & Ahn (2017) “loyalty programs are a marketing tactic aimed at building and maintaining brand loyalty through a planned reward scheme based on customers’ purchase history”(para. 1). These are useful when employed correctly, but often times companies miss the mark on what makes a loyalty program successful.

Oftentimes businesses use loyalty programs to facilitate social connection between their customers and themselves, but if it is adding nothing less than a deal to the table, the business is not going to retain a loyal customer, just a customer who is loyal to a sale.

One major point that Paharia coins about bringing social connection to your customers, to intrinsically motivate them, is that you have to bring value to your customer. Questions like, ‘what does this bring to my customer?’ and ‘what are they missing out on?’ are important to answer.

So, what makes your customer want to be in your friend group? I mean, your loyalty program.

Kim, K, Ahn, SJ. Rewards that undermine customer loyalty? A motivational approach to loyalty programs. Psychol Mark. 2017; 34: 842– 852. https://doi.org/10.1002/mar.21026

Paharia, R. (2013). Loyalty 3.0 How Big Data and Gamification are Revolutionizing Customer and Employee Engagement. McGraw Hill Education