It’s not only about the roast: how your coffee shop nudges you into buying more specialty latte
By: Krisztián Komándi
Tags: Product Design, Loyalty, Behavioral Economics, Psychology, UX

I t’s not only about the roast: how your coffee shop nudges you into buying more specialty latte

Coffee is good and only an almost full stamp card is better. Is there a trick hiding behind your favourite coffee spot’s loyalty scheme?

The above picture was taken a couple weeks ago on a rarely sunny day amidst the rainy Budapest spring. I had always known that I had many coffee stamp cards but lining them up like this took even me aback.

You could tell, I love good coffee. What you could not tell, I have a few coffee shops I am just more loyal to above any others, where I had already finished off quite a few stamp cards.

Do you think any of the cards work better?

While I do love to associate this particular attraction to some well-considered factors such as the specific roast they use, the “intense floral and plum notes in the after taste on the back-left corner of your taste buds”, the atmosphere or the quality of service, I am also very well aware that there are other subtle factors influencing the frequency of visiting a coffee shop and becoming a regular — and not only in case of coffee shops.

Loyalty programs are a common tool in marketeers’ and businesses’ hands to drive more frequent purchases and build up a relationship, but the design of the loyalty program — in this case, of the coffee stamp — can have a significant impact on its success.

If you observe the stamp cards above, you might recognise that in case of most coffee shops, after drinking 9 coffees, you get the 10th for free. What a bargain! (You spend 18 euros to get a free latte!)

Now, you might also recognise that some of the cards are pre-stamped: it either represents the last, free latte in the row (such as the green card in the top right corner — cheers, Espresso Embassy!) or it is the very first one in the line, in which case your first purchase will actually give you the second stamp on the card (the brown circles right below the espresso cup -hi, Kelet Café!).

Some cards are just displaying 10 spots for the stamps, and you get the 10th stamp for the free coffee.

Then there are a couple ones where the 10th free coffee is actually not indicated on the card, leaving only 9 places to indicate your daily dose of caffeine.

Here comes the magic!

Science tells us that considering only the coffee shops where you need to collect 9 stamps to get 1 for free, you are more likely to do so when the card comes pre-stamped compared to when your card is empty.

Why?

The Endowed-progress effect

The Endowed-progress effect is the idea that by providing an artificial sense of progress toward a goal, a person will be more likely to complete that goal.

That is, you are more motivated to finish a task, if you feel that the given task requires less effort due to some advancement — even if this advancement is completely fake. This effect, also called head-start, makes us believe that less effort is needed to a task and thus it is easier to achieve.

In a famous study, researchers Joseph C. Nunes and Xavier Dreze coined this phrase by observing the following phenomenon in case of loyalty cards for car wash.

For the study, the researchers handed out two types of stamp cards: one that required 8 purchases and stamps for a free wash, and one that required 10 purchases and stamps, but two of the spots were already stamped. Despite the same effort required from both groups to get a free car wash (8 visits), after 9 months 34% of the people in the 10-stamp group redeemed their card versus 19% of the people in the 8-stamp group. Moreover, for those who had had a head-start it took 3-days-less between the visits to go to the car wash, and this time between visits decreased further with each additional car wash purchased.

You haven’t finished this article yet but you are almost there!

When considering why the endowed-progress effect might work so well, we have to consider two related phenomena, all together explaining how we perceive progress during a task and what prompts us to complete it.

1. The Zeigarnik-effect

The little red dots next to the app icons on your iPhone screen.

The last few minutes of any Avengers movie.

Your recall of the material while preparing for any exam vs right after the exam.

Being interrupted while working yourself through the levels of a stupid online or mobile game.

In 1927, Russian psychologist Bluma Zeigarnik found that waiters had a better recall of the orders while being prepared, but once the bill was paid they had difficulty remembering the details.

That is, an uncompleted or interrupted task stick with us much more, repeatedly popping up in our head and causing a task tension. Up until we don’t complete our goal, we will be bothered because of the feeling of an incompleteness — sometimes even to the point that it hinders our ability to focus on something else.

This insight is actually used quite widely in UX: remember the last progress bar you have seen in a registration process, during an online course or while purchasing online? Congratulations, you have met an attempt to activate the Zeigarnik-effect!

Consequently, there are range of options for businesses to help customers follow through with their intentions:

By implying that they have already started a process, you can get people to subscribe to a service or enable a demo feature they might be interested in.

In the physical world, helpdesks, bank branches or any locations with longer waiting periods pull customers into the process as soon as possible.

Give people an actual headstart toward the goal: let them do the first necessary step for free or make it a lot easier (remember the newsletter subscription pages that seemingly ask only for an email address only to make you input your name, etc on the next page as well?).

2. The goal gradient effect

Have you ever glanced on the countdown while running on a treadmill, just to increase your tempo for the last 10 seconds or 1 mile?

Have you ever read the last few pages of a book or paragraphs of an article quicker?

Have you ever felt during a long night spent with studying for the next day exam that the only thing that keeps you motivated is the vanishing distance between you and the end of the material?

This is because, indeed,

the closer we are to a goal, the harder we work to complete the task at hand — that’s called the goal gradient effect.

This means that even the perception of getting closer to the end of a process might prompt us to put extra effort into it. This concept, originally established by psychologist Clark Hull in the 1930s who observed rats running in maze at the end for their reward, highlights how our perception of progress, again, impacts our actual performance.

Don’t worry, it works with humans as well: for example, when participant had to hold a handgrip during a research for 130 seconds, those shown a countdown clock squeezed harder than those who didn’t know how much time left.

In practice, goal gradient effect boils down to a very common sentence that you might have heard from your conductor in the gym, from your manager during a busy week or you might have seen it during several online processes:

“You are almost ready!”

It’s an almost magical feeling, knowing, that it is just a few steps between you and completing your goal. Even when hiking, it’s better to have smaller, visible peaks on your route, than one, continuous ascending — it gives you more frequent goals to reach and more frequent rewards for your work.

To put this trick into effect, there are two fairly widespread practices:

You can visualise the goal as vividly as possible, because the easier it is to imagine, the closer we feel it, and, consequently, the more effort we put into it. Whenever you create goals or design processes, it is important to make clear for your target group what that goal is and where they are in reaching them. Phrasing is important as well: highlighting what is left instead of what is behind activates goal gradient effect — especially if it’s close to the end. For example, people are more likely to give to a charity if they are told that they are two-third of the way toward the goal vs less than one-third along the way (although bandwagon effect might be in play here, as well — but let’s leave that for a later occasion).

Another option is to break down bigger goals into smaller ones, thereby actually bringing the reward of completion closer. In case of hard-to-reach goals, such as savings, it might be demotivating and frustrating if we are working toward a yearly goal — instead, aim to save a given amount every month. When working on losing weight, a bigger goal spread over a longer time period might make you less motivated than smaller, biweekly targets. In a project, sub-goals keep employees motivated, and a to-do list with broken down actions creates an perception of progress. Often online account setups or on-boarding processes are broken down to very small tasks, thus suggesting that you progress ahead and bringing the finish line closer visually.

There are plenty of ways to get your target group start working toward and achieve a goal — whatever you are up to, how they perceive their progress will always bear an importance.