Is it rewarding to have a reward program?

by Stacee Santi, DVM, CEO/Founder Vet2Pet

“The cost of veterinary care is at an all-time high resulting in decreased visits and loss of ancillary income to the veterinary practice.”

The average consumer belongs to 23 to 29 loyalty programs but only uses 3 to 4. Do loyalty programs work? What’s so special about the successful ones? Is there a place for reward programs in veterinary medicine?

First, let’s have a look at the major types of loyalty programs.
Stamp/Punch Card. Stamps are acquired for certain activities and after a certain amount of stamps are obtained, rewards are unlocked. The most popular version of this one would be your classic old school coffee card where you earn a stamp for each coffee and after so many, you receive a free coffee. I learned about a first version on this when I was visiting with my Memom at the senior citizen ranch and she and her friends were discussing the S&H redemption books used during the depression. You would collect stamps for purchases at the local market, then could redeem books for things like housewares and shoes at the department store.

Points. In this model, points are accrued for dollars/services and then can be redeemed for cash back or free item. The most common type of version of this is Starbucks. You can earn points with each purchase and redeem your points for free coffee. Other companies, like Sports Authority, allow you to use the points for cash off a purchase.

Membership- These types of programs are considered “Pay to Play” where a fee is generally charged to participate and rewards tend to be VIP service based such as “Free Shipping” with Amazon Prime or cash back on future purchases.

Tier/Levels- Customers are moved up into higher tiers as they spend more. The tiers offer increased access to services and unlock experiences. A good example of this is M-Life in Las Vegas casinos where you gain access to early purchase of concert tickets or VIP seats at a show.

To understand why these programs work, we have to understand science and psychology involved. Reward programs leverage 2 key psychological tactics. The first is THE O-FACTOR. When a person (or animal) receives a reward, they have a surge of oxytocin and dopamine. These hormones are responsible for developing feelings of happiness,bonding and trust. They also are a part of the addiction process too. Think about the last time you won something or received a raise, you are on a temporary high….that’s the hormone effect. All loyalty programs are built on this premise.

The second psychological tactic is the FOMO Effect…..the fear of missing out on an opportunity. Not all reward programs have this but those that do, are ultra powerful because psychologically the fear of missing out is twice as powerful as acquiring gains. The classic case of this is a syndrome facing those engaged heavily with social media. If you have ever been in a conversation with someone and they pull out their phone while you are talking to check their Facebook, that is FOMO.

Who better than veterinarians would understand the concepts and psychology behind using rewards to influence behavior? Because, if you think about it, we (the veterinary profession) are the “Outliers” as Malcolm Gladwell would call us for being experts in the concept because we have been doing this for decades with animal training and behavior modification.

Who better than veterinarians would understand the concepts and psychology behind using rewards to influence behavior?

Now that we understand the psychology behind it all, there are 6 concepts behind building a successful program to strategically drive behavior in the veterinary practice.

Keep it simple. If you can’t explain your reward program in 15 seconds or less, then chances are your clients won’t be able to comprehend what you want them to do and won’t engage. Programs that are too complicated rarely drive behavior.

Make is universal. This is the Achilles heel of the Wellness Plan…they only serve the well. The ideal loyalty program will engage most, if not all of your clients whether they own a 16 year old hyperthyroid cat or a 6 month old Golden Retriever.

The reward needs to be attainable. If your client follows all of your recommendations, they need to receive the reward in a reasonable amount of time.

The reward needs to be something everyone wants. It is critical that the reward is something desirable or behavior cannot be influenced. It is important to put yourself in the client’s shoes to create a reward your clients want (which might differ than what you want them to have).

Gamify it. If the client is required to participate or take action in some way, they will have a stronger feeling they earned it reinforcing the behavior. Remember free is a four letter word and typically if something is perceived as free, it is assumed to have less value so by creating a feeling that the reward is earned, we will preserve the value of the service.

Include a charitable option. By allowing clients to participate by offering extra spending to be diverted to charitable cause will put an extra positive spin on the program, and it’s just plain nice.

In the Vet2Pet app, we embed a virtual stamp card in the privately-labeled veterinary practice app that engages both the “O-Factor” and the “FOMO Effect”. The result is that clients spend more, visit more and experience increased happiness at the veterinary practice. Shortly after implementing this program at my hospital, I walked up to the front desk and one of our clients, who had just finished a visit with my associate, yelled across the lobby “Hey Dr. Stacee! I’m so excited! I just got 8 stamps on my loyalty card!”

In 20 years of practicing, no client has ever told me how happy they were to spend $800….until now.

Analysis of client spending patterns when exposed to reward program shows significant increase in average revenue per client transaction. Winter months become summer months and what we learn is that your loyal clients have even more to spend if incentivized.Revenue Per Client with Loyalty Program

The profession is at a crossroad now where the cost of veterinary care is at an all-time high resulting in decreased visits and loss of ancillary income to the veterinary practice. A loyalty program can reward our top clients, drive revenue, drive visits and avoid devaluing the services we provide to our patients.


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