As you may have heard, Zara has decided to charge UK customers almost £2 for returning online purchases by mail. This decision has sparked several discussions as to how this policy can potentially influence consumers to be more mindful of their shopping habits and how it can reduce the negative environmental impact of online orders deliveries and returns.
Online return fees are likely to reduce the number of orders done online and, above all, the number of impulse purchases that consumers will most likely then return. Yet consumers are not drastically happy with this decision from Zara.
It almost feels like a punishment, isn’t it?
Throughout time, punishments and rewards have been widely used in the everyday life to enhance or discourage certain behaviours. For instance, when we’re young we might have got rewarded (e.g., get a treat) if we kept our room clean. Incentives have always been used but the first exploration of the effects of rewards and punishments on human behaviour was carried out by Edward Thorndike, at the beginning of the 20th century. He developed the so-called law of effect, the principle for which a positive effect (reward) increases the chance that a certain behaviour will be repeated in the future while a negative one (punishment) decreases that chance. In simple words, we learn to do or not to do something if we are rewarded or punished for it.
Throughout time and above all nowadays, the law of effect is commonly used to promote sustainability but also to enhance certain consumer behaviours (e.g., increase repeat purchases or develop a stronger community). The best example of a positive effect is rewards programs. If you engage in a brand community, leave a positive product review, or refer the brand to a friend, you will be rewarded with discounts or free products. Following this, what happens is that you become more likely to engage to get the rewards. Brands want that kind of process as, in time, it can lead customers to adopt these behaviours permanently.
In the context of consumer behaviour, punishments are rarely chosen as they would generally lead to an adverse reaction that would drive away the customer. Negative reinforcements are used instead. To explain them easily, negative reinforcements refer to the removal of something negative. For example, you decide to buy something from a salesperson as he constantly contacts you and almost annoys you, just to be left alone. Marketers do not use negative reinforcements that much but they do have some positive consequences in the workplace, they can lead to long-term behaviour changes and they can also provide immediate results. Rewards or positive reinforcements, however, are preferred as they generally have a higher impact.
We couldn’t agree more with the idea that rewards should always be preferred over punishments and negative reinforcements. They create better experiences, specifically through evoking almost exclusively positive emotions. Numerous studies have shown that positive emotions contribute to higher product valuations, willingness to purchase and brand memorability, just to name a few. Rewards will also help you to create stronger and long-lasting relationships with their customers. Customers want to enjoy their experiences, they do not want to feel punished and most importantly, they don’t want their freedom removed. If they feel this way, they might even never come back.
Rewards programs are not enough nowadays, above all not after a worldwide pandemic. The psychology that drives consumer behaviour has shifted. Customers want to have control, they want to feel listened to and heard, they want you to recognise their values and needs and they need to see that you do everything in your power to give them what they want. Rewards in this context will work but knowing what motivates your customers to engage in your brands will allow you to give them a sensation of more personalised rewards.
These rewards by no means have to be part of a bigger programme. What feels like a reward to the brain is often different to what we in retail industry refer to as rewards (points, discounts, gifts). An illusion of personalised experience or content, a recognition through your social post being liked by the brand or an invitation to a co-creation workshop with the brand will actually be more powerful rewards in terms of your relationship with the customer and even to support behaviour change.
Do you have tough business decisions to make? Want to make sure to not punish your customers in the process? Would you like to take advantage of rewards psychology to better your customer experience? Talk to us about applying behavioural strategies as part of your answer.
