IN THE SPOTLIGHT
Neuroscience (Yes, Neuroscience) Can Amplify Your Holiday Promotions and Create Year-Round Profitability
Strategy appeals to shoppers on a deeper level
You don’t have to be a brainiac to know how integral consumer rewards are to driving holiday revenue.
But it can be tricky selecting ones that cut through the noise to impart the value of the reward while also creating a lasting effect that drives incremental value throughout the year. There are plenty of different types of rewards and reward-based promotions to choose from—all of which can drive better purchase intent and sales lift than discounts and discount-based promotions. But did you know science has uncovered which can best magnify the success of your holiday marketing promotions?
It works to your advantage to offer rewards that engage shoppers and encourage specific purchases this holiday season—but new research shows not just any rewards will do. Biometric research from the Incentive Research Foundation (IRF) found that at an unconscious level, people are overwhelmingly drawn to gift card rewards over other options like cash or merchandise.
For the IRF study, scientists asked participants which kind of rewards they preferred. Then, they gave participants different types of rewards while tracking their unintended physiological responses when receiving them. (These responses include things like eye movements and heart rate.) The study found that subjects consciously cited cash as the most appealing reward, but subconsciously showed a much more favorable response to gift cards. Participants’ pupils dilated and heart rates increased at higher rates when given gift card rewards. Whether they realized it or not, test subjects found gift cards most exciting and stimulating. These unintended responses are part of the “halo effect.”
According to the IRF, the halo effect is a source of subconscious opinions that generate an instant “gut feeling,” also called a halo, which guides our preferences. This halo can drive consumer buying behavior and even brand affinity. For instance, advertisers often leverage this behavior by using cute animals in commercials or negotiating celebrity endorsements; both can create positive reactions consumers often don’t even realize are happening.
So what does this perceived greater value from gift cards mean for retail marketers?
The Formula for Capitalizing on the Halo Effect
Subconscious preferences can heavily influence what shoppers purchase, and offering clever reward options can help drive holiday sales. The IRF’s research2 proved that consumers’ affinity for gift cards makes them a powerful choice.
Makes sense, right? Consumers appreciate the versatility and flexibility of gift cards since they can be received and redeemed across a variety of channels. Whether consumers are buying in-store, online, via mobile or otherwise, you can deliver the cards where people are active to quickly reinforce shopping behavior. You can further maximize the interaction by offering digital and physical cards to suit shoppers’ individual preferences.
It’s not just receiving a gift card that can produce the halo effect—it’s also your brand’s logo on the reward card. Consumers place a lot of trust in brands. In fact, research from Blackhawk Network found that 91 percent of respondents trust their favorite brand somewhat or very much, and trust in brands is higher than other entities that consumers interact with (such as social networks). So when consumers receive a gift card from a brand they love, it’s a double win and the warm fuzzy “halo” feeling is amplified.
Gift card rewards can be used as rebates, incentives for signing up for loyalty programs, motivation for making certain purchases and more—and are an indispensable part of your holiday marketing toolkit.
Reaping the Benefits
In addition to helping boost the bottom line at the holidays, gift card rewards can also help foster better engagement throughout the year. Gift card activation creates a series of touchpoints, and thanks to the extended halo effect, consumers that use their gift card rewards will associate your brand with a positive, enjoyable experience that allowed them to treat themselves. Talk about halo effect! By encouraging shoppers to engage with your brand during and after the holidays, you can foster year-round brand loyalty, retain existing customers, attract new ones and grow your bottom line.
Marketers are always on the lookout for ways to give consumers what they say they want—including new types of rewards. But as the IRF’s research shows, consumers may be unintentionally leading marketers astray by self-reporting that they prefer cash rewards when the truth is gift card rewards more successfully satisfy their cravings. By knowing what consumers want, even when they themselves may not, you can adjust your holiday promotional strategy to appeal to shoppers on a deeper level.
Original article from DealerScope here.
Theresa McEndree is the Vice President of Marketing at Hawk Incentives, a Blackhawk Network Business delivering incentive programs that build relationships with easy-to-use platforms, global rewards and comprehensive service and support.