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People fall into companies’ loyalty program mechanics because it makes them look good

People fall into companies’ loyalty program mechanics because it makes them look good People fall into companies’ loyalty program mechanics because it makes them look good
Source: Josh Marvin via Flickr
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I was short by 222 miles.

A few years ago I was booking a round-trip flight from the East Coast to California. It was late December, and the end of the year is always slow, so it seemed like a perfect time to visit friends.

The previous year I had flown enough on United Airlines to achieve Premier status. Calling the perks I was receiving “Premier” seemed like a marketing person’s idea of a sick joke, but it was slightly better treatment than you usually get in economy class. This year had been even busier. I had almost achieved the next status level: Premier Executive.

The perks for being a Premier Executive were only slightly better than those for Premier. I’d get to check a third bag for free, have access to special airline lounges if I flew internationally, and board the plane seconds earlier than I would have before. Nothing too exciting.

But I was so close! So I did what people do who are so focused on achieving something that they lose their common sense. I flew a circuitous route, stopping in Boston for two hours on a Philadelphia to San Francisco trip, just to make sure I had enough miles to make it over the threshold.

Experts estimate that as many as 10 trillion frequent flier miles are sitting in accounts, unused. Enough to travel to the moon and back 19.4 million times. So if they’re not actually using them, why are people so passionate about racking up miles?
Because it’s a fun game.

One way that game mechanics–the elements of a game, application, or program, including rules and feedback loops, that make them fun and compelling–motivate is internally. Discrete markers motivate us to work harder, especially when we get close to achieving them. Take the buy-ten-get-one-free coffee punch cards that are sometimes offered at local cafés. By increasing motivation, the cards actually spur people to buy coffee more frequently as they get closer to their tenth cup and claiming their reward.

But game mechanics also motivate us on an interpersonal level by encouraging social comparison.

A few years ago, students at Harvard University were asked to make a seemingly straightforward choice: Which would they prefer, a job where they made $50,000 a year (option A) or one where they made $100,000 a year (option B)?

Seems like a no-brainer, right? But there was one catch. In option A, the students would get paid twice as much as others, who would only get $25,000. In option B, they would get paid half as much as others, who would get $200,000.

What did the majority of people choose?

Option A. They preferred to do better than others, even if it meant getting less for themselves. They chose the option that was worse in absolute terms but better in relative terms.

Game mechanics help generate social currency because doing well makes us look good. People love boasting about the things they’ve accomplished: their golf handicaps, how many people follow them on Twitter, or their kids’ SAT scores. A friend of mine is a Delta Airlines Platinum Medallion member. Every time he flies he finds a way to brag about it on Facebook.

And this is how game mechanics boosts word of mouth. People are talking because they want to show off their achievements, but along the way they talk about the brands (Delta or Twitter) or domains (golf or the SAT) where they achieved.

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