While in a mall recently, I saw this advertisement plastered everywhere. Me being me…I analyzed what I saw from a marketing/branding/behavioral economics perspective. (Just ask my very supportive husband, who is very patient when I stop repeatedly wherever we happen to be – airports, malls, whatever – to take pictures of ads I want to post about and analyze in the future.)
I knew right away what was wrong with this piece, and my thoughts were echoed via my beloved social media community when I asked them to weigh in yesterday. (Thank you to all who contributed to the conversation!)
The “wrong” is pretty obvious.
Tracey Warren (of the amazing InSpark Coworking) put it perfectly and succinctly when she commented, “$10 for spending $250? Not even remotely worth the effort!”
But, this is a classic example of framing.
How can we flip this frame to be more brain friendly?
What if this advertisement said, “Get 4% cash back on every dollar you spend in the mall!”
Would that get your attention?
Would that be worth the effort?
I am sorry to tell you this, but if you do the math…
4% of $250 is (you guessed it) $10.
Behavioral economics is all about how our brains interpret things – how your subconscious brain reacts to things and how that impacts your decisions.
Why does 4% cash back sound better than “get $10 when you spend $250”?
Loss aversion is one thing – your brain immediately latches onto the requirement of spending $250 and doesn’t want to give up that money. You start to think of all the other things you can spend it on or use it for (that’s a car payment! A really nice trip to the spa!) It feels like an added expense…instead of money you were spending anyway.
That anchor is a huge hurdle that has been set in your mind now. It feels like anything less than $250 isn’t going to count. And, it implies $250 spending increments (which feels painful to the brain).
A couple of things they are doing right from a behavioral economics perspective are: clean messaging (not a lot of text overwhelming the brain) and having the $10 be in much bigger font than the $250 (which studies have shown implies to your brain that the $10 is BIGGER and $250 is smaller). Unfortunately, the gap is too much to overcome, and $10 just doesn’t seem like incentive enough to overcome the loss of $250.
A little background
Reading up on the program, it is not structured to pay a percentage increment, but in my opinion it absolutely should (and, it would not likely cost them any more money to implement).
The way it works is actually pretty brilliant. You register a card with the mall, and your purchases are tracked automatically. Whether you go in and drop $250 at Macy’s for a fancy dress, or buy cupcakes weekly until you reach your $250 threshold, it is all tracked. No receipts to input or boxes to check before a purchase. Once you hit the $250 point, it adds $10 in your account with them, which you can redeem on special bonus offers in the mall, or to get cash back on a future purchase in the mall. (This is actually genius because it encourages you to go back to the mall – like Kohl’s Cash.)
I don’t know how many people have signed up for this (it looks like many malls use a similar program), but I think with a few tweaks it could be much more successful. So, if the folks at Spring Rewards want to reach out to me, I would be happy to have a conversation with you about making your really cool program more brain friendly (so everyone can win).
What are your thoughts? I would love to hear them in the comments.