The Goal-Gradient Hypothesis Resurrected: Purchase Acceleration, Illusionary Goal Progress, and Customer Retention

Journal of Marketing Research, 43 (1), February, 39-58, 2006

Columbia Business School Research Paper No. 16-19

21 Pages Posted: 18 Feb 2016

See all articles by Ran Kivetz

Ran Kivetz

Columbia Business School - Marketing

Oleg Urminsky

University of Chicago - Booth School of Business

Yuhuang Zheng

Fordham University

Date Written: February 1, 2006

Abstract

The goal-gradient hypothesis denotes the classic finding from behaviorism that animals expend more effort as they approach a reward. Building on this hypothesis, the authors generate new propositions for the human psychology of rewards. They test these propositions using field experiments, secondary customer data, paper-and-pencil problems, and Tobit and logit models. The key findings indicate that (1) participants in a real café reward program purchase coffee more frequently the closer they are to earning a free coffee; (2) Internet users who rate songs in return for reward certificates visit the rating Web site more often, rate more songs per visit, and persist longer in the rating effort as they approach the reward goal; (3) the illusion of progress toward the goal induces purchase acceleration (e.g., customers who receive a 12-stamp coffee card with 2 preexisting “bonus” stamps complete the 10 required purchases faster than customers who receive a “regular” 10-stamp card); and (4) a stronger tendency to accelerate toward the goal predicts greater retention and faster reengagement in the program. The conceptualization and empirical findings are captured by a parsimonious goal distance model, in which effort investment is a function of the proportion of original distance remaining to the goal. In addition, using statistical and experimental controls, the authors rule out alternative explanations for the observed goal gradients. They discuss the theoretical significance of their findings and the managerial implications for incentive systems, promotions, and customer retention.

Suggested Citation

Kivetz, Ran and Urminsky, Oleg and Zheng, Yuhuang, The Goal-Gradient Hypothesis Resurrected: Purchase Acceleration, Illusionary Goal Progress, and Customer Retention (February 1, 2006). Journal of Marketing Research, 43 (1), February, 39-58, 2006; Columbia Business School Research Paper No. 16-19. Available at SSRN: https://ssrn.com/abstract=2733214

Ran Kivetz

Columbia Business School - Marketing ( email )

New York, NY 10027
United States

Oleg Urminsky (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

Yuhuang Zheng

Fordham University ( email )

113 West 60th Street
New York, NY 10023
United States

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