“No one wants to be patient. No one wants to wait for anything. They want it right now – that instant gratification.” – P. J. Tucker

Instant gratification has become a prevalent phenomenon in our fast-paced society. This is particularly true for Millennials and Gen Z’s, who have grown up with constantly evolving technologies. You can now do everything – from getting same day delivery for online shopping with Amazon to meal delivery in a matter of moments with Uber Eats. People are increasingly seeking instant results.

Furthermore, a Microsoft study, based on the brain activity of over 2,000 participants, revealed a dramatic decline of attention span in humans from 12 seconds in 2000 to a mere 5 seconds in 2022, mirroring the explosive growth of technology.

As a result, catering to our appetite for instant gratification seems like the obvious path for loyalty programs.

Rise of instant, immediate benefits and rewards

In this fast-paced, dopamine-driven world of today, loyalty programs are also undergoing a transformation.

Immediate reward types and instant gratification are becoming more and more prevalent in loyalty programs. Points morph into vouchers and discounts with a single tap, scratch-off tickets unveil instant prizes, gamification and digital games reveal rewards instantly, surprise freebies are thrown in with purchases, and tiered loyalty programs mean consumers always have access to benefits. All these initiatives are taking consumers to a land where delayed gratification feels like a tactic from a bygone era.

But wait – is delayed gratification truly useless in the modern loyalty game? Or does the long, slow burn of anticipation, still hold up in generating customer loyalty – contrasted to the fleeting buzz of instant rewards.

Instant Gratification: The Quick Fix Fizz

‘A simple yet illustrative example of the struggle between instant gratification and long-term benefits is the common decision of choosing between taking the stairs or the elevator. The elevator often appeals to our desire for comfort and speed, providing immediate satisfaction with less physical exertion.’ – Constant Health Blog

The appeal of immediate rewards and instant gratification is undeniable, offering a dopamine-driven boost to consumer engagement. However, before fully embracing this trend, it is crucial to examine both its potential benefits and drawbacks.

Pros:

• Acquisition and Brand Advocacy: Immediate rewards can lure in new members with a taste of the benefits and turn them into loyal advocates eager to share their positive experiences.The norm of reciprocity suggests that people feel obligated to return favours. Receiving a reward creates a sense of obligation towards the brand, making them more likely to return and even advocate for it
• Convenience craving: Instant rewards cater to societal ‘needs’ for quick wins and effortless gratification, aligning with short attention spans and instant gratification.
• Short-term sales spark: Immediate rewards can trigger impulse purchases and boost sales, especially for price-sensitive members.

Cons:

• Short-term focus: The lure of instant gratification can overshadow long-term goals and brand loyalty. Customers might prioritise quick wins over building a deeper connection with a brand.
• Devalued relationships: Overreliance on instant rewards can make the program feel transactional. and it may be more limiting for a brand to develop a more emotional bond with members, particularly for any brand that is not a ‘100% lowest price guarantee’ type of brand.
• Risk of member burnout: Constantly bombarding members with immediate rewards might lead to a sense of entitlement or overstimulation, potentially diminishing the perceived value of rewards over time.

Delayed Gratification: The Slow Burn Symphony

“The ability to discipline yourself to delay gratification in the short term in order to enjoy greater rewards in the long term is the indispensable prerequisite for success.” – Brian Tracy

Delayed gratification in loyalty programs involves the practice of rewarding members over time, fostering a sense of anticipation and commitment. While this approach aims to build enduring customer loyalty through patience and sustained engagement, it also comes with its own set of advantages and disadvantages.

Pros:

• Long-term loyalty: Delayed rewards, like exclusive experiences or high-value products, can effectively nurture a sense of belonging and commitment to the brand if implemented correctly. Reaching the goal becomes a shared journey, strengthening the customer-brand bond.
• Perceived value booster: The longer wait can build anticipation and increase the perceived value of the reward. A member will feel an earned privilege, rather than a fleeting perk – justified by the influence of the loyalty psychology phenomena of moral self-licensing.
• Customer lifetime value: Delaying gratification can encourage repeat purchases and sustained engagement, as customers strive towards the ultimate prize (only if they perceive the prize to worth the effort). This translates to higher customer lifetime value for the brand.

Cons:

• Patience challenge: Many consumers are no longer wired for delayed gratification. When used in the wrong context, the delay can be demotivating and result in program abandonment.
• Communication challenges: Explaining the benefits of earning towards bigger, long-term rewards requires clear messaging and ongoing engagement, which can be tricky when members crave tangible, immediate satisfaction.
• Limited appeal to certain customer segments: Not all customers are motivated by long-term goals and delayed rewards. Some individuals prioritise instant gratification and might be less receptive to programs that require sustained effort and patience.

The Balancing Act

So, which approach reigns supreme?

Neither

Understanding the psychology of rewards is key to crafting a loyalty program that strikes the perfect balance between “Gimme now!” and “The wait is worth it.” To achieve this balance, consider the following:

• Segmentation & Personalisation – Recognise that not all customers are the same. Implement segmentation strategies to understand different member segments and tailor rewards accordingly. Personalised offers can cater to the unique preferences and behaviours of individual members, enhancing the overall appeal of the program. Understanding the preferences and motivations of different segments allows businesses to tailor their loyalty programs accordingly.
• Surprise and Delight: Inject some unexpected and small instant rewards along the journey to keep customers engaged and motivated.
• Progress visualisation: Make the wait transparent. Allow members to track progress towards long-term goals with progress trackers, gamification elements, or personalised lifecycle updates.
• Focus on value: Ensure the delayed rewards are truly valuable and relevant to your members, making the wait worthwhile. The expectancy theory of motivation proposes that people are motivated to behave because they believe their actions will lead to their desired outcome. Valuable rewards are the key to keeping members engaged in the long-term.
• Brand alignment: Focus on being complementary to the brand. Aligning your loyalty structure with your brand’s identity and your customer’s desires creates a loyalty program that is strong and effective. Consider your brand’s personality: are you the quick, convenient, “grab-and-go” type, or the aspirational, luxurious experience? Craft rewards that echo those same vibes.

Win Them Fast, Keep Them Forever

In conclusion, instant and delayed gratification each play a significant role in loyalty programs. While instant gratification can generate immediate engagement, acquisition and brand advocacy, delayed gratification has shown to foster long-term loyalty and emotional connections. Striking a balance between these two approaches can create a well-rounded loyalty program that appeals to a wide range of customers.

To maximize the effectiveness of loyalty programs, businesses should invest time in understanding their target audience’s preferences and motivations.

By offering a strategic mix of instant and delayed rewards, businesses can create a loyalty program that not only drives short-term results but also cultivates lasting relationships with their member base. The key steps are to listen to members, identify their pain points, and design exclusive benefits that satisfy the instant gratification needs of everyone, whilst simultaneously keeping them hooked and interested long-term.

Looking for a perfect balance?

Take your loyalty program to the next level! Our loyalty consultants can help. Contact us today to learn how we can help you create a strategic balancing act between instant and delayed gratification in your loyalty program.