There is a great blog worth reading called “The Psychology of Games” – if you haven’t read their posts on The Psychology of Microsoft Points, then I highly recommend that you do. We can learn some very valuable lessons from this and apply them to e-commerce.
Leaving money on the table or in our Xbox Live account makes most of us a bit uncomfortable because it feels wasteful.
I’ll let the article on The Pyschology of Games do the explanation, but this quote sums it up brilliantly. By crafting the top-up amounts and their indirect correlation to the product prices, users are often left with points on their balance after making a purchase – points that aren’t enough to spend on anything else, or at least not without a top-up anyway.
How to apply the psychology of points to e-commerce
The answer to this could be staring you right under the nose, but obviously it entirely depends on your business model. Here are a couple of suggestions that will apply to the majority and implements the use of points in e-commerce.
1. Loyalty Schemes - Although not purchased by the user, loyalty points usually make up the core of any loyalty scheme. If you have rewards that users can redeem points against, allow them to also purchase points to make up any costs but do these in packages (eg. £10 ($16) for 500 points) and craft the redeemable amount on the products to leave a few points left over in the users account. Having points expire will add that impulse buying pressure on to the user too.
2. Give the user free money (credit their account) – this seems crazy, right – give the user free money? Not if you approach it correctly. Say for example, your products had at least £10 ($16) profit to be made on the products and the cheapest product was £20 ($32). Give the user £5 ($8) to redeem on anything they want – it will feel wasteful to just leave it there, especially with an expiry date.
It would be great to hear of other interesting ways you may have thought about integrating this psychology using points and if/how you use it in your e-commerce business.