Building loyalty

Creating loyalty is mostly a matter of common sense: Treat customers right and they’ll come back. But behavioral research suggests five key principles that can improve the odds of repeat business:

1. Save the best for last. Research shows that the end of an experience – whether a long-term engagement or a brief sales call – has the most impact. So don’t deliver all the goodies up front. Hold back a few nuggets for the end and customers will experience higher satisfaction.

2. Do the worst first. For the same reasons, get any unpleasantness out of the way early so it doesn’t dominate the customer’s recollection of the entire experience. For example, if there’s a billing dispute, put it first on the agenda.

3. Segment the pleasure, combine the pain. When gambling, most people prefer to win $10 by winning $5 twice. But they’d rather lose $10 all in one blow. Scientists call this an “asymmetrical” reaction to loss and gain. Similarly, break pleasant experiences into lots of stages but group unpleasant experiences into one single stage. A gourmet meal has several courses, but the check only comes once.

4. Build commitment through choice. Blood donors experience less discomfort when they get to choose the arm from which the blood is to be taken. Likewise, customers are more likely to be satisfied when they have some control over the process. For example, present several options rather than a single recommendation, even if you strongly favor just one.

5. Establish rituals and stick to them. Rituals provide meaning and comfort. Common rituals include luncheons, presentations, weekly calls and progress reports.