In order to encourage loyalty, customers who buy at the online store yesmywine.com receive a stamp in the form of a “country medal” each time they buy a bottle of wine. Customers who collect 12 medals in a year receive a reward, for instance a free bottle of wine.
This sounds quite normal, right? But there’s a catch. To receive the gift the customer must collect the 12 medals in a specific order. For instance, they have to buy a French wine in January, a Spanish wine in February and a Chilean in March etc.
You may think that this approach sounds too strict and that less customers want to participate as a result, which means less of a turnover. But actually it turns out that the wine company has stumbled upon a seemingly illogical connection between initiating and completing goals. A connection that’s not only able to help the marketing division sell more wine. Leaders may also use this insight to set up goals for himself or his team.
It’s no surprise that most people prefer flexible goals. In the end, we’re quite bad at predicting the future, and the elbowroom a flexible goal offers means that we can change the goal a little along the way. But this logic doesn’t apply when it comes to completing a goal. Here, studies show that we are better at completing a goal when it follows a structured and rigid plan. Like the previously mentioned loyalty plan.
Marketing professor at Stanford, Szu-chi Huang, and her colleagues have conducted a line of experiments to identify the difference between the two types of goals: The rigid and the flexible.
In one of the experiments the researchers hand out different types of loyalty cards to the customers of a store that sells fresh yoghurt of the type: Buy six yoghurt at full price and receive two for free. One type of card requires the customers to buy six different kinds in a random order, while the other half of the cards require that customers buy the six flavours in a specific order. This means banana, apple, strawberry, orange, mango and grape.
Customers who were offered the flexible card signed up for the loyalty program with much higher frequency. Approximately two and a half times higher. But the opposite is the case when it comes to completing the assignment. Consequently, the customers who received the loyalty card with the rigid sequence completed the assignment with a 75 % higher probability.
Thus, the flexible frequency got more people to subscribe to the loyalty program. But the rigid sequence meant a far greater completion percentage. But why?
The reason that flexible goals lead to lower goal completion is, according to the Chinese researchers, that the flexible goal means that we have to make far more decisions along the way. Because those decisions distract us from goal-completion while we think about which action we need to fulfill the goal. This shift between different mindsets (completing the goal and choosing our next action) can be an exhausting process, especially when there are many possibilities to choose from.
This is where the advantage of a rigid sequence shows. All of the choices are eliminated and all we have to do is continue to the next step of the plan. This exploits if-then planning (which we have written about here), among others, which makes the whole process more fluent, less exhausting and faster.
As seen in the examples above, flexible goals are best when it comes to getting people to sign up for a loyalty arrangement. But if you want your customers to buy all 12 bottles of wine then the rigid method is better.
But how do we know when to make rigid or flexible goals? Here’s a few things to consider.
As Huang and colleagues describe in their study, it’s possible to make a hybrid solution. For instance, a fitness center could begin by setting up a flexible goal for their training program to encourage people to sign up. Later on, they can make the process more rigid to help people complete the program.