How we are pushed to spend more

My friend is close to losing his ‘gold membership status’ with a leading airline. To say that he is upset would be an understatement. You may be facing a similar situation with your service providers who offer such customer loyalty programmes. These programmes are meant to make your spend more by triggering certain psychological responses from you.

My friend felt that his membership was upgraded from a regular flyer to gold status in quick time. And despite flying just as many trips in the last couple of years, the airline sent him a notice sometime back stating that his membership will be downgraded to silver if he did not accumulate the required miles before September-end. The airline, perhaps, expects my friend to fly them more frequently to maintain his existing status. And that expectation plays on his psychological response.

status quo

As humans, we like to maintain status quo, especially, when it comes to things that offer us positive satisfaction. A gold membership allows my friend to avail privileged boarding and, perhaps, even free upgrade to business or first-class on certain routes. Losing that privilege can be painful. You and I are hurt more when things are taken away from us, so much that the pain of losing something is much more than the happiness of getting the same thing in the first place! The airline, needless to say, is banking on this psychological response from my friend.

You can use a similar strategy to nudge your teen at home to help you with household chores. You can give your teen daughter her weekly allowance upfront, but take back some of the allowance from her if she fails to do her allotted household chores! This could be more effective than threatening to cut her weekly allowance that you might otherwise pay at the end of the week; for the pain of losing money that she already has is harder to bear. And, perhaps, you can apply the same logic to drive your sales team in the office to meet their monthly targets.

But will your teen daughter always complete her chores? Or will my friend fly more frequently to avoid the pain of losing his elite membership status with the airline? Not necessarily. Sometimes, such rules can backfire! And this could happen if the rule causes you more anger than pain. An airline, for instance, can trigger such response when it brings all accumulated miles to zero if you lose your current status. My friend currently faces such a situation.

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