How To Gamify Loyalty Program To Achieve More Customer Retention

Gamify Loyalty Program

Have you ever found yourself staying up all night, trying to pass a single level of a video game that you’ve been stuck on for hours? Perhaps you got swept up in the
Candy Crush craze of proudly sharing your score with the world via social media pages.

What is it about a good game that we find so addictive? Whatever it is, there’s plenty of brands out there trying to capture it and apply it to consumer behavior. So let’s take a look at how gamification applies to brand loyalty and customer retention.

First of all… what is gamification?

In essence, to gamify something is to take that fun and engaging element of games, and apply it to an otherwise ordinary or mundane process.

And when I say “games”, don’t picture guys with headsets sitting in front of PlayStations and Xboxes until the early hours of the morning. Gaming refers to anything from Scrabble to a “Collect 3 to Win”-style scratch card.

In fact, if you’ve ever ordered a pizza through the Dominos app and tracked your order from the preparation stage to the oven, then from the shop to your front door, you’ve been engaged in gamification.

Or how about when LinkedIn informs you that your profile is only 58% complete, and you should “level up” to a fully complete profile to better your chances of being noticed by recruiters? This is also gamification.

Games motivate specific behaviors through goals, benchmarks and rewards – kind of like loyalty programs. It only makes sense that gamification would eventually become intertwined with brand loyalty and customer retention.

Okay… so what does gamification mean in regards to customer loyalty?

The idea is to add gaming components to a loyalty program in order to engage customers and encourage them to participate. While the rewards are still the ultimate incentive for joining a loyalty program, a gamified process ensures that customers remain engaged along the way, and don’t lose interest.

Essentially, it’s an opportunity to create a memorable customer experience and strengthen the emotional connection to a brand. Considering that consumers who feel emotionally connected with a brand have a 306% higher lifetime value, it’s no wonder that businesses have started embracing this technique.

In fact, a recent Forrester study revealed that emotional connection is a far higher driver for customer loyalty than things like ease or effectiveness.

This is especially true among brands with a strong Millennial and Generation Z customer base. A recent COLLOQUY study found that over a quarter of Millennials stay engaged in a rewards program due to gamification mechanisms like badges and competitive elements like leader boards, for example.

Which brands are at the forefront of gamification in customer loyalty right now?

I’ve already mentioned how Dominos makes something as routine as ordering a pizza more exciting; this “track your order” feature also makes for a more convenient customer experience and gives an element of control back to the customer too.

Starbucks Rewards is another prime example of a loyalty program that knows how to play on people’s fondness for games. Stamp Me Loyalty Solutions wrote an in-depth case study on how Starbucks managed to revolutionize the way customers enjoy their trademark hot beverages.

While coffee lovers who download the Starbucks Rewards app will probably first be more enthusiastic about being able to pay through the app, skip the queue and enjoy free in-store refills, gamification is what keeps customers hooked long term.

Starbucks uses challenges such as, “Try each of these items between X date and Y date to collect 150 Bonus Stars” to encourage customers to broaden their menu choices (this also allows the coffee chain to promote new additions to the menu).

Considering that Starbucks Rewards outdid Apple Pay, Google Pay, and Samsung Pay as the single most popular app for mobile payment across the US in 2018, it would seem that Starbucks is doing something right!

How can I gamify my customer loyalty program?

Obviously, the above examples work exceptionally well for those particular brands, but how you go about gamifying your specific loyalty program ultimately depends on your unique business.

Consider which demographic the majority of your customers fit into, and map out a gamified narrative to your rewards program that you think will appeal to your
main customer base.

As a start, any good game comprises the following five components, so try to incorporate them into your customer retention strategies as best you can:

1. You complete tasks? You receive points.

Accumulating points is naturally gratifying, as it inspires a feeling of progress. Make sure your loyalty program is designed in a way that customers accrue at least a single point with every purchase or other active engagement with your brand.

2. Achieve a milestone? Progress to the next level.

Dividing a game up into levels is how players know where they stand. Rather than setting up your loyalty program in a way where customers “reset” to square one after redeeming their reward, why not advance them to the “next level” with every reward redemption? This prevents them from feeling like they’re just going in circles.

3. Want to compare your scores? Check the leader board.

Leader boards allow players to see how they are stacking up against their competitors. By allowing customers to see how they are tracking, you play on people’s competitive streak and create a sense of urgency in “staying on top”.

4. Rise through the ranks? Receive some form of acknowledgment.

Something as simple as a badge or token that displays a player’s status within the game is enough to make them feel acknowledged for their efforts, as they make their way towards their next reward.

5. Why play? To overcome a challenge.

Every game needs a conflict that needs to be resolved or a challenge that needs to be overcome in order for the narrative to be concluded. With such a similar structure between a basic game model and a rewards program, it’s easy to apply the same principle to customer loyalty.

To use Starbucks’ “Try these items” example again, these little games create a challenge for the customer to overcome, with a time limit to keep it interesting.

So… can you see why gamification is important in customer loyalty?

Hopefully, by now, you can see why gamification is so important to customer loyalty, and how you can effectively implement these strategies into your own customer loyalty program, no matter what kind of business you have.

Remember… everyone loves a good game. The more effectively you can use this trait to encourage customer loyalty, the more successful your rewards program will be.


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