There are two kinds of motivation that prompt human beings to act the way they do: intrinsic and extrinsic. Intrinsic motivation is an internal desire to engage in activities solely for the joy, satisfaction, or inherent rewards they provide. Conversely, extrinsic motivation comes from external factors, rewards, or outcomes that prompt individuals to act.
E-commerce retailers commonly employ extrinsic motivation to boost sales by using discounts, promotions, and rewards. This can be effective in the short term, but excessive reliance on extrinsic motivators can have negative consequences for a company’s long-term growth and sustainability.
Relying too heavily on extrinsic motivation tactics like these can lead to a number of problems, including the following:
Brand dilution: Overuse of extrinsic motivators can dilute a brand’s value proposition. When customers primarily associate a brand with discounts or promotions, it becomes difficult to position the company as a provider of high-quality products.
Erosion of customer loyalty: Extrinsic motivators often attract customers who are just looking for a good deal. However, these customers tend to be less loyal. Their loyalty may hinge on the availability of discounts, which is a fragile foundation for building long-term customer relationships.
Profit margin pressures: An overreliance on discounts and rewards tends to squeeze profit margins. This can hinder a company’s ability to invest in product development, enhance customer experiences, or deploy organic growth-oriented marketing strategies.
Superficial customer understanding: When businesses rely solely on extrinsic motivators, the importance of understanding customer needs and preferences at a deeper level gets obscured. As a result, insights into intrinsic motivations often take a back seat.
If your business has been relying heavily on extrinsic motivational techniques, think about ways you can pivot toward nurturing intrinsic motivation instead. Doing so can help foster sustainable customer relationships and long-term loyalty Here are a few ideas:
Align with your customers’ values. Many consumers are intrinsically motivated to make purchases that reflect their identity and values. By promoting shared values with their customers, a brand can establish a deeper connection with them.
A global outdoor clothing brand wanted to increase sales without discounting by using intrinsic motivation. Our research indicated that the value of protecting the environment resonated strongly with their customers, so we promoted this value to them.
We tested sharing real life success stories the company had in working to protect the outdoors with customers. Those who were exposed to these stories within their buying journey showed a significantly higher intent to buy than those who weren’t exposed to the stories.
Be strategic in positioning hedonic products. Customers often purchase luxury items and other hedonic products for the sheer pleasure and enjoyment they provide. This is a powerful source of intrinsic motivation.
We conducted research for a luxury Italian car company that helped them create an improved digital in-car console experience. When monitored through biometric technology, this improved experience brought enhanced pleasure, enjoyment, and safety to the customer’s driving experience.
Provide exceptional customer service. Most e-commerce retailers tend to focus their customer service efforts on solving customers’ problems. However, going beyond problem-solving to provide memorable experiences for customers can help foster intrinsic motivation. Positive impressions often result in a natural desire by customers to return to the site and buy again.
A global electrical appliance company that creates innovative home solutions has a call centre to handle customer enquiries about faulty products. Our research indicated that their customers rated the service they received from this call centre so highly that their interactions with them left an extremely positive impression. This positive customer service experience brought customers back to the site to make repeat purchases and strengthened the relationship between the brand and its customers.
Celebrate customer milestones. Acknowledging customer milestones like anniversaries or loyalty program achievements can help boost intrinsic motivation. Meaningful gestures, such as sending thoughtful gifts to celebrate milestones, enhance the bond between brand and customer.
It’s important to recognise that intrinsic and extrinsic motivations are not mutually exclusive in the world of e-commerce. So strive for a balanced approach that takes both kinds of motivation into account. The interplay between these two types of motivation can shape consumer behaviour and drive long-term success for e-commerce businesses.
By gradually shifting customers from extrinsically motivated to primarily intrinsically motivated purchases, e-commerce retailers can cultivate a community of loyal customers who are driven by their inherent desire to engage with the brand — not by the desire to get a discount. This can ultimately lead to long-term business sustainability and profitability, even in an economic climate of growing uncertainty, increased competition and continued downward pressures on margins.