Answer :
The purpose of a loyalty program that offers a free dessert on every fifth visit to a restaurant is to increase customer satisfaction. This type of program incentivizes repeat visits and promotes customer loyalty, as evidenced by Koo and Fishbach's experiment which showed the effectiveness of frequent-buyer cards in encouraging return patronage.
The purpose of the program where customers receive a free dessert on every fifth visit is primarily to increase customer satisfaction and encourage repeat patronage. In Koo and Fishbach's field experiment in a South Korean sushi restaurant, they observed that customers were more likely to return when there was perceived progress towards a reward. This Goal-Gradient Effect suggests that the closer customers are to receiving a reward, the more likely they are to continue engaging with the business, potentially enhancing customer loyalty and satisfaction.
The experiment's design, with one condition focusing on accumulated progress and the other on remaining progress, provided insights into how customers can be incentivized to become repeat customers. The frequent-buyer cards acted as a visual reminder of the customers' progress towards a complimentary meal, thus playing a significant role in driving repeat visits to the restaurant.
When implementing such a program in your business, like a coffee shop, it's crucial to find rewards that are desirable to customers, ensure the rewards are seen as fair, and potentially give customers a choice over their rewards. These factors, combined with the principle of increasing customer satisfaction, can contribute to building a loyal customer base that will support your business over time.
