How to Train Your Customer — Why loyalty isn’t bought, it’s taught
A Marketer’s Guide to Motivational Economics
Mark Sage - 13 min read - 12/11/2025
The Viking village of Berk has a dragon problem.
For as long as anyone can remember, dragons have attacked their island, stealing food and burning homes. To the Vikings, dragons are the enemy — wild beasts to be fought, feared, and killed — and their entire way of life revolves around this constant battle. Young warriors trained from childhood to kill dragons and the solution to every problem is bigger weapons, stronger walls, and more aggression.
But none of it works — the dragons keep coming.
Then a young Viking named Hiccup breaks the cycle. By befriending a dragon called Night Fury, he begins to see the dragons differently. They’re not monsters, they’re simply misunderstood.
It’s a turning point — not just in the story, but in mindset. Hiccup’s insight is simple but powerful.
Behaviour, whether the dragons or the Vikings, is shaped by environment — and it’s the same for marketers and customers.
As marketers, we often fall into the same trap as the Vikings — fighting the behaviours we see, not the motivations we don’t.
When sales soften, we assume customers are slipping away — that they’ve become disloyal, price-obsessed, or distracted. We reach for the tools we know such as price discounts, urgency offers, last-chance reminders. It’s how we’ve been trained to respond.
But what if the behaviour we’re seeing — customers waiting for deals, ignoring everyday value, cherry-picking offers — isn’t innate? What if it’s the result of an environment we created?
Because here’s the uncomfortable truth — we train our customers.
During Covid in Hong Kong, we saw an impact on sales at the health and beauty retailer, Mannings. The business had traditionally benefited from mainland China tourists who came to buy highly desirable products like Baby Formula — reselling back on the mainland. When Covid hit, the borders locked down, tourists dropped — and so did sales. The business had to pivot quickly to concentrate more on the local market, and discounts were a key tool in this — helping to drive more demand.
The challenge though was that discounts worked too well. Every time you run a discount campaign, you get a sales spike. So you run more.
After a while customers notice. They start to change their shopping patterns to fit into the discount days. The more regular the schedule, and the more frequent the days, the more regular the customer usage of them.
We saw this in the data — customers started to change their shopping patterns to fit into the discount day schedules. We were training them to shop on discount, and in the process, simply eroding long term margins.
Staff are also not immune to this ‘training’.
A few years ago, I was in M&S in the UK looking to buy some bedding. The staff member asked if I had their Sparks loyalty app and then proceeded to tell me that there are regular offers on this category — essentially suggesting I should wait to purchase on discount when the offer next came up. Their automation cycle on marketing offers was training both staff and customers a-like!
Left unchecked, this can change the very DNA of the business — something Pizza Express experienced.
Responding to the recession back 2009, they moved heavily into using vouchers and coupons — so much so, that many people questioned if anyone actually bought their pizza at full price anymore. A Marketing Week article at the time commented:-
“Pizza Express customers are now buying into the brand with the expectation of cheap deals. By choosing to focus on price, it is exacerbating a situation where it is unable to speak to the customer about anything else. Once the recession ends, the question on everyone’s mind will be: how does a once high-end brand regain its image and loyalty?”
As marketers, it’s not like we don’t recognise this issue — but by the time we do it feels too late.
We started out trying to drive up traffic but ended up driving down margins — teaching customers that full price isn’t worth paying. And when we try to stop, we’re shocked that traffic collapses.
But why wouldn’t it? We trained them to behave this way.
Motivational Economics
This is Motivational Economics in action — which, at its core, is about designing incentives that shape behaviour.
Whether it’s a price discount, spend threshold, or tier attainment, every offer is an experiment in behavioural response. We put in place purchase incentives and customers respond to them.
In the loyalty industry, we often use a different name for this — gamification. It borrows from game design but applies those mechanics to non-game contexts, aiming to make participation more engaging or habit-forming. The focus tends to be on the mechanics themselves — how to make progress visible, rewards meaningful, and repetition satisfying.
There’s a related field though, with a similar name - game theory. Rather than looking at the mechanics of play, game theory looks at the economics of it. Instead of thinking like a game designer, you think like an economist — modelling how the optimal response aligns with your desired outcome. It’s about anticipating how members might trade off different types of reward or how competitors might react to your incentives.
Both lenses help us understand the same behaviour from different angles — the emotional and the economic.
Take that simple price discount from Mannings. It lowers the cost of participation, playing on price elasticity and that basic principle of “buy more when it’s cheaper.”
From a brand perspective, you’re sacrificing margin in the hope of driving short-term volume and, ideally, longer-term loyalty. The customer gains utility — more value per dollar — and adjusts behaviour accordingly. Competitors, meanwhile, have to decide their next move. Do they match or hold.
The first time you do it, you often win. Customers shift volume your way while competitors hesitate. But repeat it often enough and the market learns. Shoppers consolidate their spend into your discount windows, and competitors follow suit. What began as a tactical win turns into a strategic trap — a race to the bottom.
This is where changing the rules of the game helps.
By making the act of earning or unlocking a discount feel meaningful, you introduce an emotional “why” to accompany the rational “what.” A sense of progress, challenge, or recognition transforms a pure transaction into participation.
To truly make a difference, gamification (the mechanics) must work hand-in-hand with game theory (the economics). Their interplay is what drives motivation.
The ultimate goal isn’t to create games or gimmicks, but to motivate customers through strategic incentives that generate profitable, sustainable behaviour. That is Motivational Economics.
Whilst Motivational Economics may be about designing incentives that shape behaviour, my time in Vietnam turned out to be its live experiment. What began as a rational price mechanism evolved into a study of perception, habit, and emotional training.
Vietnam’s grocery market is still dominated by wet markets and mom-and-pop stores. This meant our competition wasn’t so much other modern trade retailers — other supermarkets — but was customer behaviour itself. To succeed in the long term, we’d needed to shift more shoppers and more shopper behaviour into modern trade.
Knowing a key driver of footfall is fresh, we’d previously anchored our loyalty offer on a 20% discount for fresh food — simple, powerful, and surprisingly effective. But it also created dependency; customers had learned that our discounted price was the normal price. To move forward, we had to retrain them.
We tested several different mechanisms to understand how these may impact behaviour, replacing for example part of the discount with points. Purchase volume dipped slightly, but value rose, and crucially, customers stayed. They were deal-hungry, not price-hungry, and as long as it felt like a deal, behaviour held.
The real insight though came through something I called the coupon paradox.
As part of our different pilot tests, we’d introduced one looking to drive additional fresh sales through targeted coupons — leveraging these for both acquisition and retention.
The activity was aimed at trying to get existing buyers with a high purchase propensity to make an additional visit. Using a unique product pack coupon, it was essentially a ‘when it’s gone it’s gone’ promotion, with a limited number of unique packs having an attractive price.
As a targeted offer it barely moved sales; likely requiring more effort for the customer than their perceived return value. Yet when we sent the same coupon to everyone, sales lifted by more than 1.5 percentage points.
Interestingly, redemption didn’t really change, but perception did. The coupon seemingly stopped being a discount and became an advertisement. Seeing it reminded customers that we stood for value, even if they never used it.
It’s a paradox that challenges the prevailing logic of precision marketing.
Sometimes, narrowing your target narrows your impact. In this case, the “waste” of sending a coupon to everyone was where the real value lay. Ninety-nine percent of customers didn’t redeem, yet those same customers drove the one-and-a-half–point uplift in sales.
Precision may make you efficient, but reach makes you remembered. And as this test showed, when you’re trying to lift a market’s mood rather than a single SKU’s sales, memory beats mechanics every time.
What’s striking to me about this mass coupon result is that it mirrors something Rory Sutherland once described about the burger chain Five Guys. Their burgers are deliberately priced high; customers see the price and assume quality. But when you order fries, you choose a cup size — small, medium, or large — and they fill the cup to the top, then throw an extra scoop of fries directly into the bag.
Economically, those extra fries are already costed in. They’re not really “free.” But psychologically, because they sit outside the container, they feel like a gift. The customer believes they’ve been given more than they paid for.
That’s something Rory describes as the power of net perceived value — when the presentation of value creates more satisfaction than an equivalent amount of actual value ever could.
Our coupon test seemed to do exactly that.
When we sent them as targeted communications, the offer was the cup — precise, contained, and rational. Customers weighed the effort against the reward and decided if it was worth it. However, when we went mass, it was like we threw an extra scoop of fries in the bag. The offer became a symbol of generosity rather than a transaction. Customers didn’t redeem it; they just felt better about us.
The effect was driven not by deeper discounts but by a small shift in framing. We didn’t increase the actual value at all — we simply changed how value was perceived.
That’s the real lesson here. Loyalty doesn’t have to cost more; it has to feel more. When we leverage discounts (or points) as a currency to drive immediate action, it can work, but we have to recognise that it’s not simply a transaction for the customer, it’s changing the overall motivational economics — both the rational price and the more emotional brand.
This is the essence of Motivational Economics in practice. When you stop discounting for behaviour and start designing around motivation. The power lies not in the amount you give, but in how that value is framed, felt, and remembered.
This same thinking sits at the heart of how Tesco Challenges operate — a capability now clearly central to their customer strategy given it was mentioned by their Group Chief Executive in their 2025 Annual report.
It’s easy to dismiss Tesco Challenges as a simple sales promotion — just three circles and a progress bar — but what it hides is remarkably sophisticated motivational design.
Each challenge blends behavioural psychology, margin management, and micro-personalisation, turning what was once a static promotion into a living, adaptive journey.
At the heart of it is stretch — a gentle push beyond what a shopper normally does.
For some categories, that stretch acts as acquisition. In the Twinings Tea challenge for example, the £3 target roughly equals one pack of tea. It’s not asking you to buy more — it’s asking you to buy once. The goal is to bring you into the category or remind you that Twinings still exists in your repertoire.
Other challenge examples, like Silver Spoon sugar or frozen vegetables, work in retention mode. Here the first tier is already a stretch — two bags instead of one, or an extra frozen item for the week.
From there, each tier adds roughly another product. You start with two, then three, then four. The numbers step up by fifty percent each time, but the reward doesn’t rise as fast. It flattens — from about fifteen percent of spend at the first tier, to twenty, then twenty-five. That taper is deliberate — the structure builds goal gradient.
As you get closer to completion, the next step feels smaller. For Twinings, the second tier (two packs) leaves you only a pound or so short of the third. You’re already near the finish line, and one more pack of tea tips you over. That’s where the magic happens — you overshoot. The challenge doesn’t just drive purchase; it drives completion. You end up buying more not because you need it, but because you’re chasing closure.
Each design element seems to play its part:
Acquisition challenges start soft — low entry threshold, high perceived reward.
Retention challenges start stretched — harder entry, more measured payout.
Rewards escalate slower than spend — creating a feeling of progress while protecting cost.
The final tier always feels within reach — activating that goal-gradient rush.
On paper, the economics look generous. When you add up the points, it seems Tesco often gives away almost all the incremental margin from the extra spend. A £3.25 bag of peas or a £3 box of tea carries maybe twenty-five percent margin — around eighty pence of profit — and the shopper might get seventy or eighty pence back in points across the challenge.
It feels irrational, until you zoom out.
The brand is funding part of the reward, the margin is recovered across the wider basket, and, most importantly, the behaviour persists long after the game ends.
The numbers back it up. Eagle Eye, the technology company behind these challenges, reports they typically drive a four-to-one sales uplift — four Pounds of extra revenue for every Pound given in reward. On paper, that means most of the incremental margin is returned to the customer.
But the value isn’t in the single transaction; it’s in the new habit it creates — the new training. The customer learns to buy in multiples, to fill the freezer, to come back for the next challenge.
That’s the quiet genius of the design, in that the reward cost recycles the margin from the extra pack, while the behaviour remains long after the points are spent.
It’s not a promotion; it’s motivational economics — and it’s what separates great loyalty design from traditional sales promotion.
A “Buy One Get One Free” gives the same illusion of generosity, but it trains customers to wait for the next deal. It doubles volume for a week and halves margin while it’s at it. A challenge, by contrast, rewards participation rather than price sensitivity. The cost curve may look similar in the short term — you still give away most of the incremental profit — but the learning is entirely different. One teaches the shopper to chase discounts; the other teaches them to chase goals.
Motivational economics don’t discount the product; they discount the effort. The shopper still feels like they’ve won, but they’ve won by doing more, not by paying less. And when the motivation ends, the price resets, but the habit remains.
This is core Skinner conditioning — creating new behaviours, through variable reinforcement, that stick around longer once that reinforcement is taken away.
Back to Mannings. We played this same game to (re)train the customers.
The regular discount days, had meant the rhythm of buying was no longer built around need, but around the next “member price day”. Discounts weren’t rewarding loyalty — they were replacing it.
Our challenge then was to reframe customer value expectations, reducing reliance on discounts, and creating more everyday buying behaviours.
For this, motivational economics fit the bill perfectly.
In one case, we leveraged a simple challenge that was spend $1,000 HKD in the period and earn a $20 HKD coupon. Whilst the challenge was simple, the results revealed the complexities of customer behaviour.
Among those who hit that target and redeemed their reward, 2/3 had spent less than the stretch target in the pre-period — many of them well below half that. Yet during the challenge, they didn’t just creep past the target; they blew past it. Light buyers — the very shoppers trained by years of discounting to hold back — suddenly became the most responsive segment.
The challenge reframed the entire decision process and re-trained the customer on value.
Instead of waiting for the next deal, customers began asking themselves, “How close am I to earning my reward?” That small mental shift, from saving money to unlocking money, was enough to change behaviour at scale.
We’d essentially rewritten the rules of the game — and make no mistake, this was a game. Customers had learned the rules and were holding back spending until those discount days. Now, we’d turned the game on its head.
Changing the rules from holding back spending until the discount was released, to maximising spending to release the discount.
New rules. New training. Better outcomes for all.
For me, the Mannings case is a masterclass in training value perception. We learned that customers don’t need lower prices to move; they simply need a reason to move. Stretch promotions gave them that reason — a challenge to aim for rather than a discount to wait for.
What began with dragons ends, fittingly, with training — but not of customers, of ourselves.
As I mentioned at the beginning of this chapter, we typically fight the behaviours we see, not the motivations we don’t.
But Motivational Economics isn’t just about how we move people; it’s about what we choose to teach them. How our pricing, promotion and loyalty strategy train customer behaviour.
Every discount, every challenge, every threshold we put in place tells a story about what matters to our brand. If we train customers to wait for deals, they will. If we train them to seek progress and participation, they’ll do that instead.
What you may have also noticed through all of this is that pricing strategy and loyalty strategy go hand in hand. They can work together to drive deeper long-term customer behaviours, or they can work apart — diluting efforts on both sides.
Ideally, our aim should be to frame value in ways that feel earned, fair, and generous, while still protecting margin. Working together as a single marketing team across Product, Price and Promotion — and leveraging the dual lens of gamification and game theory, through the emotional pull of design and the economic logic of sustainability.
In the end, Motivational Economics is behavioural architecture. Designing with both heart and mind so we stop reacting to behaviour and start trainingit.
That’s how you train your customer — not through bigger discounts, but through better design.