The power of positive reinforcement and incentive in business
Positive reinforcement is a powerful tool which can make your business boom when deployed correctly. What do you know about this mysterious power you can wield to influence people’s behaviour?
The Psychology of positive reinforcement
It’s science! The benefits of deploying positive reinforcement strategies in your business isn’t pie in the sky stuff – this theory is based on almost 100 years of serious psychological inquiry, starting with B.F. Skinner’s work on ‘operate conditioning’ in 1938.
“Conditioning is a method of learning that occurs through rewards and punishments for behaviour. Through operant conditioning, an individual makes an association between a particular behaviour and a consequence” (Skinner, 1938).
Of course, psychologists did not invent the idea of positive reinforcement – this elemental phenomenon pretty much goes back to the dawn of human kind.
‘Conditioning’ can essentially be distilled into the idea of a carrot and a stick. In order to modify a subject’s behaviour there needs to be the promise of a carrot or the threat of a stick.
Negative vs positive reinforcement
While we could spend time discussing negative reinforcement, this area is best discussed when concerning pets and children (if at all).
When we’re looking at clients, the general public and our own employees, it should be a no-brainer that removing rewards or doling out punishment is not exactly a wise business decision…
Stick with positive reinforcement.
Incentives – the basis of economics
Another way to frame the idea of positive reinforcement is incentives.
If you have ever read the book ‘Freakonomics’ by Steven D. Levitt and Steven J. Dubner, you’ll know that the economy and human behaviour is conditioned by (and dependent on) incentives.
“Economics is, at root, the study of incentives: how people get what they want, or need” – Freakonomics
To incentivise is to motivate and to motivate is to create action. Creating action, whether in our customers or our employees is the cornerstone of business.
So, if the concept of positive reinforcement becomes a little fuzzy, simply think about creating incentives.
Your precious staff. They are like plants – in constant need of tending to. How can positive reinforcement be used to boost employee performance?
Rewarding behaviour and instilling the expectation of rewards is a powerful tool when managing employees. This can be as simple as acknowledgment and encouragement.
Social rewards are actually quite powerful incentives and sometimes public recognition or private words of praise will suffice. Nobody likes doing a good job, applying effort and then getting zero positive feedback. So, start with feedback (it’s also free).
Recognition may only go so far though, and you should be mindful of creating economic incentives as well, such as rewards. Think of meaningful ways you can incentivise staff like Friday pub lunches, monetary rewards, free days off or promotions and pay rises.
Now we look to the meat of your business: your lovely customers. To your benefit, there are many, many opportunities to deploy some positive reinforcement that affects consumer behaviour.
“Are you creating a way for your middle tier customers to buy your products by giving them discounts and incentives?” ― Ellis Howell
What can you do to incentivise the most important people to your business?
- Offer discounts for their second order: to create repeat business and satisfied, incentivised customers, try offering discounts when they return – not just on the first visit.
- Give away freebies: adding extra value to an order is a fantastic way to harness positive reinforcement. You can even send extras without saying anything to catch them unaware and breed positive sentiment.
- Conscience appeal: offer services or products that involve eco-friendly or ethically conscious methods to evoke a moral appeal.
- Deploy scarcity tactics: if you have an e-store for example, having ‘limited stock’ under items for sale or ‘20 percent off until tomorrow’ is a great way to incentivise immediate action. (OK, full disclosure, this last one may be perceived as ‘negative reinforcement’ but hey – it’s a great tactic)
At the end of the day, human beings are hard wired to respond to positive reinforcement. All you need to do is harness it for your own purposes to achieve better business outcomes.