Surprise and Delight is a promotional tactic that has proven successful in many applications, but which also generates significant debate when suggested as a core strategy to engage, maintain, and grown value from a customer group.
The announcement by Caribou Coffee of its Caribou Perks loyalty program put the question firmly in our sites at LoyaltyTruth. Caribou is direct in its messaging about how customers will benefit from its new program. Paraphrased, the message is “register, use your card, be surprised when you receive a reward from time to time”. In the FAQ section on the program website, Caribou lets members know that “Perks will vary….from a size upgrade to something free from the bakery, even an occasional free drink”. Answering the question “When do I earn Perks?”, Caribou responds “It’s a surprise, What we can tell you is that the more you enjoy, the more we’ll reward you in unexpected ways”.
According to a report in Loyalty360, the program launched January 2, 2014 and already reports enrollment of 100,000 or more persons. Caribou clearly wanted to step out of the traditional loyalty program structure box, one that many say is filling up with quicksand as customers grow weary of the same old collect and redeem model. It’s encouraging to see a national coffee brand stakes its customer strategy on this type of incentive model. Previous to launch of Caribou Perks, Panera Bread’s My Panera program was the only customer loyalty program in market based on a similar approach.
When effectively used, Surprise and Delight uses an algorithm that triggers some type of reward to the member of a customer loyalty program or member club. Whether bonus points, discounts, or coupons for a “freebie” are used, the game is to make the customer experience live up to the promotional name. Customers regularly interacting with a brand should be “surprised” to receive a reward and be “delighted” about the good news.
The reward should marshal and release the “happiness gene” that has been said to be found actively working in women. But all good things must come to and end and the aftermath of a surprise and delight reward can be a let-down in the member’s psyche. At the least, the member is left musing on how great it was to receive a surprise reward and wondering when it might happen again.
The theory behind Surprise and Delight is an area of behavioral psychology that was made popular by the work of B.F. Skinner dating back to the 1950’s. You can read a succinct summary of the impact of variable rewards here and will see the connection between the three types of rewards that motivate behavior change, Tribe, Hunt, and Self with the game mechanics being put into play in consumer marketing strategies today. In a related article worth reading, you’ll find evidence of our human disposition towards novelty as well as some useful descriptions of variable rewards.
The work of Skinner and others has been well digested by game designers over the years and brilliant minds like Steve Sims, VP Solutions & Design Badgeville, have extended these concepts to successfully impact behavior in business. This interview with Steve in Forbes.com shares a top-level view of why game theory and elements of behavioral psychology should be considered in building the next generation of loyalty programs. In the article, Steve notes that humans are motivated by “Four S’s”; the need to feel successful, socially valued, smart and structured. For all our bravado, we humans are apparently sensitive beings after all, with some essential emotional needs that we constantly seek to satisfy. By applying strategies that tap into our intrinsic needs and desires, marketers can unlock new paths to reaching their objectives.
Coming full circle, Caribou Coffee has taken a good first step in launching Caribou Perks that might transform a reliable tactic into a successful loyalty marketing strategy. Browse though their Facebook page and you’ll see that they have had some bumpy launch issues, with complaints about registration as well as minor discord over the Surprise and Delight offer itself. It is likely these issues will be sorted out quickly, allowing Caribou to turn attention to polishing a program evolution that will give its Surprise and Delight strategy lasting impact.