Why You Should Consider Adding Gamification to Your Customer Loyalty Program

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Gamification is one of those buzzwords you often hear during brainstorming sessions, but when it comes to loyalty programs, it’s become much more than just a fad. Having a gamification component to your loyalty program or app is one of the most proven ways to keep customers happy and engaged with your client’s brand. That said, many have found that when they try to incorporate gamification into a business without proper research and data intel on their customers and target audience, they often end up feeling as if they’re performing without a net. The same goes for sophisticated customer retention solutions, such as robust loyalty programs.

It doesn’t seem like all that long ago that most loyalty programs centered around the “buy some/get one” punch card model, along with the occasional direct mail special coupon offer. But with the exponential growth of eCommerce and the birth of the smart, sophisticated modern consumer, loyalty programs have branched out from simply rewarding purchases with basic rewards. To keep today’s customers engaged, loyalty programs must offer a wider range of incentives and attractions. While this can prove to be a challenging endeavor, if you have a program built on a data-driven platform like FiO’s Customer Loyalty Platform you can build a customer loyalty program that creates real Customer Lifetime Value (CLV).

Why Gamification Works Well for Customer Loyalty Programs

Transactional loyalty programs – like the coupons and percent-off discounts discussed above- have proven less and less effective, and brands are beefing up their customer loyalty programs to set themselves apart and drive greater engagement. This is critical, considering that:

  • 58% of consumers said they’re more loyal to brands than they were five years ago.
  • 63% of consumers indicate they belong to between one and five loyalty programs.
  • 77% of consumers feel brands could be doing more to earn their loyalty.

This is where gamification entered the picture. There isn’t one perfect approach to a gamified loyalty program or one surefire type of contest that will ensure engagement. Gamification requires using game elements or design techniques as part of your marketing strategy to influence customer behavior and engagement. Modern marketers know that gamification induces powerful emotions like excitement, intrigue, and happiness to influence specific actions and reactions. How do they know this? Through the use and analysis of behavioral and sentimental analytics.

Increasingly, brands are leveraging both gamification and behavioral analytics in their loyalty programs as a differentiator and a key component in the personalized, customer loyalty loop. While the theories behind what engenders brand retention and brand loyalty are changing constantly, loyalty programs that have included a gamification component to their apps or eCommerce sites have routinely reported higher engagement numbers and bigger growth than those who stick with the basic “some for one” model.

To achieve this and have your gamification efforts be a successful endeavor right out of the gate, take note of these five key elements to creating a loyalty program that is engaging and addictive to your customer base.

1. Figure Out What Behavior You’re Trying to Inspire

Are you hoping to increase the frequency of visits or average transaction amount? Are you trying to generate some hype around your business and get people talking in an effort to acquire new customers? Or do you simply wish to make sure your existing customers don’t abandon you for your competitors?

Different game design elements can trigger different outcomes and to encourage loyalty, but you must motivate customers to keep coming back. A common way to do this is to develop multiple steps that allow them to collect points to redeem for rewards. And if your customers are interested in achieving goals, performance graphs and progress tracking tools could be the way to go.
 
If you want to use your existing customers to attain new ones, for example, you might do something similar to Uber and offer your loyal customers attractive rewards and discounts for getting a friend to register.

On the other hand, if your goal is simply to encourage people to visit more frequently, take a page out of Starbucks’ book and offer your loyalty program as a seasonal contest where they win a “turn” every time they make a purchase, all with the goal of acquiring holiday-themed badges and rewards toward specific prizes.

By having a clear idea in mind of what you want your loyalty program to achieve, you can gear your gamification to inspire certain behaviors that will create sticky customers and inspire brand loyalty.

2. Encourage Customers to Adopt Digital

You need to go beyond asking a customer to download a mobile app or scan a loyalty card with every purchase. Using gamification paired with making a purchase online or through social media enables you to incentivize digital adoption and greater engagement with your loyalty program, while also helping them have a seamless experience inside a store and while online shopping. This is providing a true omnichannel interaction, and it creates a unified, cohesive brand experience that builds connection and loyalty.

Behavioral data used in customer data platforms like FiO’s Customer Loyalty Platform provides valuable insight into what consumers respond to, how, and why. With the benefit of this predictive analysis, it’s clear to see that today’s customer is looking for a seamless, personalized experience throughout a brand’s entire ecosystem. By building this unified concept into every touchpoint and having them earn loyalty stock throughout, you’re not only giving continuous brand exposure, you’re also building another brick into the loyalty bridge every time they buy from your brand.

3. Map Out Your “Storyline”

Remember, the game is only fun if customers understand how to play it.

What do your customers need to achieve to reach the incremental goals? What is the reward for these goals? Do the rewards increase in value with every new benchmark the customer reaches? What’s the ultimate “end prize” that you want customers to strive for?

Striking the balance between making both the game itself easy to understand and yet also engaging to play can be a real challenge for many brands, and sometimes it takes a few tries before you finally get it right. One of the key elements is making sure you’ve created a game that is memorable and that engages your customers immediately.

Consider offering customers an instant reward purely for signing up. This ensures that customers immediately see rewards for their participation, and the lure of further (and bigger) rewards keeps them on the hook. And the game shouldn’t remain static, either. Produce new additions to the game or new releases, or at least consider changing the game’s graphics and overall look seasonally.

As addictive as a good game is, it only works if you can get people to play it in the first place, right? The better your loyalty program is structured, the easier it is to gamify, and the more likely it is to entice people to want to play it, accumulate points, and ascend the ranks.

4. Keep Customers on Their Toes

Remember that most people are competitive by nature. If your customers lose track of where they stand or gets bored with the progress of an overly long game, they’re likely to lose interest in your loyalty program as well.

In gaming (whether we’re talking about crossword puzzles, board games, or the latest games on the market), the player always knows where they stand regarding their progress through the game. This is true for many online assets and programs too, and consumers are conditioned to receiving that feedback. For example, it’s quite common to notice a little progress bar when you’re completing your LinkedIn profile, letting you know your progress and how much time is left before you complete it. LinkedIn will also tell you whether your profile security is weak, intermediate, or strong — and behavioral data collected by LinkedIn shows that anything below a “strong” often motivates users to put more effort into their profile and ensures they are more likely to complete their profile in full.

The same is true for any loyalty program online games in which consumers participate. People naturally want to do well and succeed. Enticing side promotions like Scratch and Win competitions can be implemented immediately, with an alert sent to each customer in the loyalty program through Push Notifications or Automated Texts. Enticing your target audience with promotions like impromptu Scratch and Win or other “one-off” competitions keeps your loyalty program members engaged and helps to stave off any boredom or fall off with the long game. This keeps your brand in the front of their mind, creates a sense of urgency in reaching the next level, and keeps consumers from the “I’ll never win this game” mentality.

Having things like badges, stamps, and leader boards – and the occasional instant win – within your loyalty program offers some form of recognition and plays on people’s competitive streaks as well.

5. Use Social Media to Your Advantage

Clever use of social media can promote your loyalty program and save you lots of money on traditional advertising methods. Offer customers the option to share their rewards program status and achievement badge on their social media accounts. Features like offering customers the capability to share their loyalty program status and “achievement badges” can spread awareness of your loyalty program like wildfire. For example, one of the key contributors to the success of Candy Crush was the free social media promotion the game experienced through existing players posting their scores.

And don’t discount the value of creating a unique, intriguing hashtag to help increase awareness. You can even incentivize players who share their status on social media tagged with the dedicated hashtag by offering a monthly sweepstakes for those who do so.

Spontaneous rewards are also a great way to actively invite customers to promote your loyalty programs versus traditional marketing methods. Try including incremental awards that consumers aren’t aware of. Utilize incentivized rewards to enhance your program. And make sure you’re promoting both the gamification itself and the benefits of your loyalty program on your own social media accounts.