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Shop for Good by DailyKarma How to Drive Sales Using Reward Psychology

How to Drive Sales Using Reward Psychology

When you do something and get rewarded for it, it always feels better than when you don’t (no surprise!). So what if you could reward your customers when they shop to make them feel great and, in turn, encourage them to spend more at your store? That’s what reward psychology can do for your brand.

There are simple, straightforward ways to spark a good feeling in people when they interact with your business — whether it’s through support, while shopping, or when they receive what they purchased, among other opportunities.

And when done strategically, these tactics can all help increase your bottom line. Specifically, this is a path to more repeat purchases, higher average order values (AOV), and solidifying connections with each of your customers.

What is reward psychology and how can you leverage it?

The basic tenet of reward psychology is that, if you understand how your customer thinks and what they want, you can give them what they want to encourage certain behaviors — i.e., joining, buying, engaging, and sharing.

To leverage this, you first have to know what your customers want and/or you can use positive reinforcement to influence your audience’s mindset and help drive your desired behavior. For instance, you can encourage a habit of purchasing regularly by rewarding that behavior every time they buy with a discount or gift (hello, Donate for Discount campaign from Shop for Good!).

How brands can use reward psychology to drive sales and more

Giving back is not one-size-fits-all: it should be tailored to your audience and your goals, just like your reward system. Luckily, there are different ways to connect with consumers, drive revenue, and impact the world throughout the year to keep things fresh.

Donate for Discount

Instead of just donating a percentage or fixed amount of your sales to charity, you can use reward psychology to incentivize your customers to donate to your favorite charities as you reward them through a discount on their order (a.k.a. positive reinforcement).

So what specific results can you expect when you implement the Donate for Discount campaign from Shop for Good in your store?

  • Intimate feminine apparel brand Felina experienced a 14% jump in AOV in one week
  • Gourmet dog bakery Bubba Rose saw its AOV increase by 16%
  • John Masters Organics enjoyed a 17.5% increase in AOV during a 36-hour campaign
  • Socially conscious brand Charged Jewelry has seen a consistent 29% increase in AOV month over month just by implementing this campaign
  • Feminine apparel brand Ivory Ella experienced a 61% rise in AOV and engagement over just a few days. Furthermore, within 24 hours, Ivory Ella raised nearly $5,000 for Save the Elephants through customer donations (the goal was around $1,500 based on other campaigns/brands they’ve worked with before). Ivory Ella found that 55% of all orders on that day opted to donate for a discount and 29% chose to round up their order to the nearest dollar for charity (the benchmark was 6-10%). In just 24 hours, the brand got 840 total orders (a 45% increase from the day before) and a 65% increase in conversion rate. As one of the co-founders stated: “For the first time, we were certain our customers cared about our cause. Shop for Good proved that.”

How to Drive Sales Using Reward Psychology - dailykarma app - points

Donate for Discount leverages existing consumer shopping behavior to not only drive donations for charities but also provide value for retailers as well as charities. Shop for Good was created to allow brand partners to meet their customers where they are — shopping at their online stores.

The beauty of Donate for Discount is that not only are you rewarding positive behavior (with a discount in exchange for the donation), but also you’re engaging in reciprocity. You know — what friends and family do for each other! Except that now you’re engaging in an emotional, reciprocal relationship with your customer.

Waiters do it by bringing a mint with your check in hopes of earning a bigger tip. And you can use Donate for Discount to build goodwill with your audience while helping charities and increasing sales. Besides, the Donate for Discount campaign is known to boost AOV by up to a whopping 61%. How could it get any better?

Points

Another way to energize engagement is by using a rewards program where people accumulate points and can use them toward incentives such as a big discount, exclusive experiences, free shipping, or free products when they reach a particular threshold. You might have taken part in a point system when shopping at stores including Sephora, Macy’s, and Dr. Axe.

How can your customers accumulate points? That’s up to you (and part of the fun!) Here are some examples:

  • Leaving reviews (Thrive Market gives you a $1 discount per review when you review eligible products)
  • Referring friends (Google Fi gives both you and the friend you refer $20)
  • Making purchases (Sephora, Macy’s)
  • Even providing excellent support can be considered positive reinforcement (Thrive Market and Amazon are both known for taking good care of their customers)

These types of exchanges strengthen the emotional connection between your business and each individual customer and inspire confidence in your brand, thereby building loyalty — which is perhaps the best long-term strategy you can have.

An all-in-one tool to implement a points program is Smile.io, which allows you to build a rewards program with flexibility and strategy while taking a more advanced long-term view of your relationship with your customers and how you want to shape it over time. Smile.io lets you maximize the effectiveness of positive reinforcement tactics by entering them into a well-crafted rewards framework that takes customers by the hand and walks them through the behaviors you’d like them to take — from referring friends to leaving reviews and making purchases more frequently.

How to Drive Sales Using Reward Psychology - dailykarma app - gifts

Gifts with every order

A simple way to make your customers feel like VIPs? Give them free stuff with their order! It doesn’t have to be expensive — even something small and inexpensive can have a high perceived value and turn your customers into raving fans.

Here are some examples of what brands are shipping out for free with every order to help you come up with something amazing for your people:

  • Makeup and skincare company Glossier ships out free stickers and a travel-sized makeup bag
  • Society6 sends you free stickers
  • Thrive Market allows you to select a free sample as well as a free item based on your order amount
  • Natural skincare brand Blissoma ships you a skincare sample

Small rewards like these go a long way to make customers feel cared about and valued by your business — and automatically make them want to return the favor by continuing to buy from you and sharing news of your generosity with their friends. Free products encourage engagement, help guarantee satisfaction, and heighten your program’s sense of fun.

When a customer sees the free sticker or bottle that you sent them, even long after having made the purchase, it reinforces their good feeling about the purchase decision and makes it increasingly likely they will buy from you again rather than going to a competitor.

As your customers take action and experience the positive reinforcement of rewards through your brand, you are deepening your relationship with these individuals and increasing their loyalty. Not only that, but you’re also promoting in them the habit of shopping at your store to earn a reward, and the associated satisfaction that comes with it helps make this an addictive cycle.

Positive reinforcement is its own reward

By now you can see the immense value in using reward psychology to charm, engage, and bond with your customers. It’s a thoughtful, good-feels-inducing approach to encourage behavior that will pay your brand back in spades and even over the long term. You can even throw give-back campaigns into the mix (ahem, through Shop for Good)!

Opportunities abound to make your business stand out, nourish an emotional connection, and grow your relationship with your audience throughout various touch points. And it’s all worth it — not just because it feels good, but also because of the monetary gain that will allow your brand to flourish into the future.

Reward psychology is a give-and-take tool that can lead to increased sales, brand recognition, customer loyalty, referrals — you name it. How will you use it?

Try Shop for Good by DailyKarma today in your Shopify store
to make a difference to your bottom line and the world with reward psychology.

 

Shop for Good by DailyKarma featured in Shopify

Giving Season is Here – and We’re Featured in Shopify!

We’re thrilled to announce that Shop for Good is being featured in the Shopify App Store as a Staff Pick! With more than 2500 apps available in Shopify’s app store, it’s an honor to be highlighted.

And what a perfect time it is for us to be highlighted — it’s November and we’re all gearing up for holiday (a.k.a. giving) season!

Whether during giving season (or year-round), the challenge for most e-commerce companies is figuring out how to rise above the noise, again and again. Especially if you’re not continually releasing new products or if your products are similar to your competitors’.

Given the constantly rising level of online competition, what can you do to make your ideal buyers choose you over your rivals?

Here’s what we know.

Giving Pays

We’re happy to report that customers care about making the world a better place. If your company stands for something, gives back, and you communicate these values to your audience, you will gain loyal followers who are glad to spend more dollars in your store — now and into the future.

In fact, you can even lure your competitors’ customers away using cause marketing! (And, yes, you can use Shop for Good to do this!)

Given similar price and quality of products, 91% of consumers said they would likely switch to purchasing to a brand that supports a cause they believe in, according to a Cone/Echo Global CSR Study.

In other words: if you make giving back part of your brand’s user journey, you have a 91% higher chance of not only charming your existing customers but also wooing new ones away from your competitors. That’s huge!

Give-back campaigns raise average order value 

Over 900 brands have installed the Shop for Good app by DailyKarma to their Shopify stores. The result? Engaging campaigns that help drive sales while giving back to charity.

We love to talk about gourmet dog bakery Bubba Rose, who has used Shop for Good this year to increase its average order value (AOV) by 16%. How? Just by incorporating our Donate for Discount campaign into their product pages:

 

Bubba Rose donate for discount

Female apparel brand Felina achieved big results in October for Breast Cancer Awareness Month. By offering a 15% donation when customers gave $1 to charity, Felina saw average order value rise by 14% when comparing orders tied to a donation to orders without a donation.

Felina donate for discount

You don’t even have to run a campaign for a quarter or even a month to see big results. 

Natural beauty product brand John Masters Organics ran a cause marketing campaign over the weekend, offering 20% off when customers donated $5 to charity. They found that 54% of all orders included a donation and the company saw a whopping 17.5% increase in their average order value compared to orders not linked to a donation.

john masters

Socially conscious brand Charged Jewelry installed Shop for Good and has been selecting different charities to support each month to gauge alignment with their online consumers. The result? More than 40% of all orders included a donation and the brand experienced a wonderful 29.76% increase in average order value for orders in October, compared to orders not linked to a donation.

Charged Jewelry donate for discount header

Giving Season is for Giving – and Selling

Whether you’re preparing campaigns for Black Friday, Cyber Monday, Giving Tuesday, Hanukkah, Christmas, or another one of the various holidays coming up, launching a give-back campaign is an easy and quick way to up your sales while making a positive difference in our world.

Ready to sell more this giving season?
Download the
Shop for Good app in the Shopify App Store to your store and connect one or all of our campaigns to give back and make more bank.
Why you should care about cause marketing - DailyKarma Shop for Good

Why You Should Care About Cause Marketing

Cause marketing is not just a do-gooder effort that helps nonprofits — it’s also marketing that helps brands like yours cut through the noise, stay top-of-mind, and drive more business. 

Consumers want to support brands that share their desire to make the world a better place. For brands, it’s a smart and simple way to make a social impact and reap the economic benefits, too.

Let’s say you have the best prices. Perhaps surprisingly, for most consumers, this is no longer their main motivator to buy. So what can you do to stand out in this era of stern online competition?

Check this out: given similar price and quality of products, 91% of consumers said they would likely switch to purchasing to a brand that supports a cause they believe in, according to a Cone/Echo Global CSR Study.

If your brand caters to millennials or Gen Z, in particular, trends and studies (such as the surveys conducted by DoSomething Strategic) show these audiences choose to spend their hard-earned dollars on brands with purpose, time after time — especially when those brands focus on connecting with their audience through a genuine, deep commitment to a cause as opposed to an individual, one-off, short-lived campaign (although the latter can also prove successful).

How to leverage cause marketing in 3 steps

Here’s what you need to know:

1. Select a cause or charity you truly believe in that’s relevant to the brand

Consumers are savvy these days and easily pick up on cognitive dissonance (a.k.a. if you’re just paying lip service to a cause to make sales, they’ll know it). 

When selecting a charity or cause to support, consider what makes your brand unique and what it stands for; bring your core values to mind. This will help you pick a cause that’s unique to your company and less likely to be duplicated by your competitors. 

In this light, what cause matters most to you and your team? Is this a cause your customers can fervently support as well? 

When employees believe in the cause, it’ll show in your copy and in your customer service and echo throughout your work and offerings. And consumers love to support a genuine brand that’s not just raising funds but awareness too!

2. Keep it simple …or get more involved 

Cause marketing can be as easy as donating a % of your monthly sales from specific products or allowing your customers to round up their purchase to the nearest dollar and donate the change to your selected charity (or up to 5 charities if you’re using the Shop for Good app on Shopify!). 

For a deeper involvement, many charities offer specific perks for their business partners ranging from specific cross-promotion to organized volunteer dates.

Just like with personal giving, your brands giving should be customized to what works best for you. Our advice is: Start small and grow.

3. Put a ring on it: Market your commitment to a cause so it causes profits

Wham bam, thank you, [buyer] isn’t a profitable strategy: brands now need to build long-term relationships with their customers to keep profits growing. 

Use your cause marketing as a bountiful opportunity to continually touch base with and engage your customers throughout their journey with your brand. It’s wonderful to make giving a part of your customer journey, and it’s even more impactful if more of your customers learn about it! 

Shop for Good has multiple features, like Round-Up, % of Sales, and Donate for Discount that are displayed on your product or cart pages and can be interchanged all year long to keep your cause marketing fresh.

Speaking of which, everyone is busy, so expect that you’ll get a bolder response if you employ several touchpoints with your audience motivating them to take action via a donation. 

In addition to that, be loud and proud promoting your collaboration with nonprofits via:

  • Social media (maybe even create a unique hashtag to engage followers!)
  • A banner on your homepage
  • A landing page
  • Your newsletter 
  • Etc.

…To get more people jazzed about your products, your brand, and your far-reaching efforts. Even consider creating a video or other marketing collateral for ongoing efforts to maximize the effectiveness of your giving. 

Cause marketing FTW

All this is nice and good, but what do the hard numbers look like? Glad you asked!

At Shop for Good, we’ve seen our brand partners enjoy big successes even in a short amount of time.

Consider artisanal dog bakery Bubba Rose, which increased its average order value (AOV) by a generous 16% merely by linking its purchases to giving by using Shop for Good’s Donate for Discount campaign on an ongoing basis. 

In Q3 2019, Bubba Rose saw its AOV jump from $50 (orders that excluded a donation) to $88.25 (orders linked to a donation) in its retail store and from $246.39 to $361.87 in its wholesale store. 

Socially conscious brand Charged Jewelry has been using Shop for Good to support different charities each month and gauge alignment with their customers. The result? More than 40% of all orders included a donation and the brand experienced a wonderful 29.76% increase in average order value for orders in October, compared to orders not linked to a donation.

Do you care about cause marketing yet?

In an era when 80% of consumers care about societal issues and believe that businesses should play a role in addressing them, according to the 2016 Edelman TRUST BAROMETER, leveraging cause marketing is more powerful than ever. 

And it’s easy to implement as well, allowing you to set it and forget it as you focus on your business and gear up for the holiday season.

Ready to make cause marketing work for you?

Try the Shop for Good app in the Shopify App Store to make it easy peasy for your store to give back, do good, and boost sales — all in one.