Glossary
What is welcome credit?
A welcome credit is a head start given to a new member (for example two stamps awarded at sign-up) used to trigger the goal-gradient effect immediately rather than from zero.
Starting a customer at two of twelve rather than zero of ten produces measurably better completion even though the remaining effort is identical. The reason is that progress already made feels like something to protect, while an empty card feels like a long way to go.
Why give credit before anything is earned?
Because endowed progress measurably improves completion rates. People pursue a goal more persistently when some progress has already been made for them, even when the remaining effort is identical.
The cleanest implementation is to lengthen the card and pre-fill it: twelve slots with two stamps given, rather than ten slots empty. The customer needs the same ten purchases and behaves as though they have something to protect.
How much should be given?
Enough to be visible and not so much that the reward loses meaning: commonly one or two stamps on a card of eight to twelve. The purpose is to move the customer off zero, not to discount the programme.
Does it work for points and visits too?
Yes, with the same logic. A points programme can open an account with a round starting balance, and a visit card can credit the appointment the customer has just had. In every case the effect comes from the card not being empty at the moment the customer first looks at it.
See also
- Goal-gradient effect: The goal-gradient effect is the observed tendency for people to accelerate their effort as they get closer to a reward, which is the psychological mechanism a stamp card relies on.
- Reward threshold: The reward threshold is the number of stamps or points a customer must reach before earning a reward, and setting it correctly determines whether the programme motivates or discourages.
- Double opt-in: Double opt-in is confirming a customer's agreement to be contacted a second time, through the channel itself, so that the business holds evidence the person who gave the number is the person who owns it.
- First-party data: First-party data is information a business collects directly from its own customers, such as a phone number given at the counter, and in a loyalty programme it is the asset the programme produces.
Further reading
Running one loyalty programme across multiple locations
How to run a single loyalty programme across two or more sites: one card or several, who pays for a reward redeemed elsewhere, and what changes with franchisees.
What your loyalty programme terms and conditions need to say
The clauses a small business's loyalty terms need, the ones that cause disputes when they are missing, and why expiry is the most important decision in the document.