The Friction-Motivation Model:
Unlocking Customer Loyalty in a Price-Sensitive India
Date: 29-01-2025
Reading time: 1.5 minutes
SHIFT #19

The Challenge of Price Sensitivity
Indian consumers are highly price-sensitive, yet they demand high-quality experiences. Companies often grapple with the dilemma of reducing costs without compromising the perceived value of their offerings. Behavioural science reveals that customer loyalty is rarely built on price alone—instead, it’s influenced by the interplay of friction (the barriers customers face) and motivation (their intrinsic and extrinsic drivers).
Understanding the Friction-Motivation Equation
Friction: This includes physical, cognitive,temporal(time) and emotional effort required to engage with a product or service. High friction often leads to drop-offs, no matter how good the product is.
Motivation: This encompasses both extrinsic rewards (e.g., discounts, loyalty points) and intrinsic rewards (e.g., a sense of trust or belonging).
To unlock loyalty, companies must find a balance: minimizing friction while amplifying motivation.
Practical Applications in India
- Simplifying Discovery and Access:
Many first-time borrowers or rural customers find fintech apps intimidating. Companies can reduce friction by designing intuitive interfaces, using regional languages, and offering assisted onboarding. - Personalizing Experiences:
Personalized recommendations (based on behavioural data) tap into intrinsic motivation. For example, an e-commerce platform could suggest budget-friendly products tailored to individual preferences.
- Reinforcing Trust:
Trust is a key motivator in India’s highly competitive markets. Companies that invest in transparent pricing and customer service (e.g., quick issue resolution) enhance perceived value. - Rewarding Loyalty Tangibly:
Loyalty programs that reward repeat purchases with cashbacks or exclusive access drive motivation. For example, Zomato Gold thrives by giving consumers a feeling of exclusivity.
Case in Point
When Paytm launched its cashback-driven ecosystem, it didn’t just rely on discounts. It eliminated friction (seamless payments) and amplified motivation (immediate rewards). The result? A massive shift in customer behavior toward digital payments.
The Behavioral Science Behind Subscription Economies: Why We Sign Up but Never Cancel
The Rise of Subscriptions in India
From streaming platforms like Netflix and Hotstar to meal delivery plans like Swiggy One, India is embracing the subscription economy. This model thrives on recurring revenue, but its success isn’t just about affordability—it’s deeply rooted in behavioral psychology.
Key Psychological Drivers
- Loss Aversion:
Behavioral science tells us that people fear losing access to a service more than they value the money saved by canceling it. This fear keeps them subscribed, even when usage drops.
- The Endowment Effect:
Once subscribed, people feel a sense of ownership over the service. This makes it harder for them to let go, even if they’re not fully utilizing it.
- Convenience and Status Quo Bias:
Subscriptions often automate renewal, creating a “set it and forget it” mindset. The effort required to cancel (friction) keeps many consumers locked in.
- Perceived Value:
Companies package subscriptions with additional perks to amplify motivation. For instance, Amazon Prime combines free delivery, exclusive deals, and access to Prime Video, making it feel like a bargain.
Strategies for Subscription Success
- Frictionless Sign-Up and Onboarding:
Make the initial experience seamless. Companies like Spotify offer free trials to reduce perceived risk and encourage adoption. - Sticky Features:
Offer exclusive benefits that consumers can’t get elsewhere, such as personalized playlists or priority customer support. - Engagement Triggers:
Regularly remind users of the value they’re getting. For example, Duolingo sends usage stats and streak reminders to motivate continued engagement. - Retention Analytics:
Monitor usage patterns to proactively address churn. If a user isn’t engaging, offer targeted discounts or features to retain them.
Case in Point
Netflix’s “Are You Still Watching?” notification isn’t just a practical feature—it subtly reminds subscribers of their usage, reducing guilt over perceived underuse and reinforcing the habit.
Balancing Customer Experience and Perceived Value
The Behavioral Takeaway
At the heart of both loyalty and subscriptions lies the delicate balance of reducing friction and enhancing motivation. Companies that design their offerings around this principle can create meaningful, lasting relationships with customers, even in a competitive, price-sensitive market like India.
Looking Ahead
As consumer expectations continue to rise, businesses must focus on:
- Human-centered design: Simplify experiences at every touchpoint.
- Behavior-driven insights: Use data to understand and predict customer needs.
- Sustainable motivations: Move beyond price wars to build intrinsic loyalty.
By leveraging the power of behavioral science, companies can not only attract customers but also retain them in ways that feel effortless and rewarding.