"Another
aspect to consider adding to your points system is an artificial advancement.
For example, say your pizza restaurant wants to start offering free pies to
loyal customers – after crunching the numbers, you find that after four small
pizzas purchased at the full price, it makes fiscal sense to give away the
fifth one for free. Each pizza equals one point, and a free pie is earned for
every four points. You could start new members of your reward program off with
a points card with a zero balance on it… OR, you could offer them a card that
requires five points for a free pizza, but you’re going to be awesomely
generous and put their first point on there for free, on the house. In each
example, the customer will have to buy four small pizzas in order to earn a
free one, but numerous studies have proven that customers in the second group
are much more likely to actually earn that free"
It’s a psychological aspect of feeling closer toward completion – they are already 20% of the way to their goal when they start, versus 0% when starting out at 0/4. Plus, when the second group earns their first free pizza, they’ll have to buy five again, not four, to earn a second free pie, meaning more revenue for your business.
Whitehead, Jerry. Customer Loyalty.blog.fivestars, 2013
Adverts play on this when coming to discounts, free delivery etc. It allows the customers to remain loyal to that specific brand, this tactic sucks you into a repetitive relationship with the brand. The phycological act creates a need to purchase the product in order to satisfy your reward system.
In personal doings, I have become quite loyal towards Cafe Nero as their reward system is that when you purchase 9 hot drinks you can claim a free coffee any size or type.
My feeling toward coming close to filling up the loyalty is rather exhilarating. Avoiding the fact I have spent £20 just to get that free coffee. Being oblivious to its enticing strategies causes an overwhelming loss in expenditure