Gamification built into a loyalty program should be used as a way to promote continual brand engagement, where the user is given incentives for performing certain actions or reaching milestones. It involves taking some of the features of video games and time-sensitive promotions and molding them into loyalty-building programs.
Adding gamification to loyalty should involve rewarding actions beyond just the purchasing experience to include referrals, social media interactions, and other actions that can’t be directly measured through dollars spent. This is the biggest misconception about loyalty programs – that they always need to correspond directly to purchasing, but don’t often consider how other activities affect the brand.
Gamifying Customer Referrals
Consider a coffee chain’s loyalty program where an individual refers two other friends. These three could earn points on their own, but also reach group milestones. Perhaps when they spend $100 as a group they unlock an additional discount or freebie. Adding a group component can build friendly competition and comradery, which can further endear the participants to the brand. Within such a group dynamic the coffee chain could also provide dynamic messages to each individual updating them on their progress. For example the chain’s app could push a notification when the group is “only five bucks” away from reaching the $100 requirement.
Adding gamification to referrals is very powerful when it incentivizes everyone involved. The rewards offered need to make sense for the specific business, whether it’s a discount, additional points, a free gift, or some other reward. It’s vital for the back-end technology supporting such referrals is robust, so loyalty members can see how they and their referred friends are progressing towards certain milestones.
Gamified Loyalty Strategies
Starbucks offers a very popular loyalty program that’s integrated with its app. Users can earn rewards points and also use the app to place an order and have it waiting for them upon arrival, which eliminates waiting in line. The app also features gamified elements. For example, the company will often provide users of its app with a discount on an iced drink to those customers that bought coffee earlier in the day. This is a simple yet powerful example of giving the user a “challenge” to see if they can enjoy coffee twice in one day.
Any gamified activity or promotion needs to be time sensitive to fit within the company’s sales cycle. With the Starbucks example the sales cycle is obviously quite short, and repeat purchasing within a short timeframe is not an unexpected event. The whole purpose of gamification is to increase frequency of purchasing or interaction with the brand. If your sales cycle is two months, then make the gamification period one month long, in order to keep clients interested. Especially when there’s a leaderboard and competitive component to the gamification, you need to pick shorter timeframes so users that are lagging behind can always look to future months/weeks/days to compete. Firms should also adjust the types of incentives offered and the mechanics of the “game” in order to keep it fresh for new and existing customers and to prevent people from taking advantage of the promotions. And personalize the experiences within certain customer segments, by creating perhaps special incentives for a select group of the most valuable customers.
And the leaderboards should be easily accessible on landing pages, home pages, and social media, so customers can easily see where they stand and make instant decisions on purchasing and potentially improving their place on the leaderboard. The signup process must be simple, and the rules about the promotions explained in plain language to encourage broad participation.
Another strategy is to introduce more compelling incentives during slower sales cycles. Retail chains should consider offering enhanced gamification rewards during January and February as a way to keep them involved in the brand after the holiday’s sales events. Steeper discounts for loyalty purchases or social media check-ins during these months can boost the user’s affinity for the brand, which might pay off immediately, or in the coming months.
A final consideration for adding gamification to loyalty programs is you cannot make participation mandatory. Forcing customer interaction is not the way to build long-term brand allegiance, so you have to offer tangible relevant rewards that can be gained only by those who are willing to engage with the “games.” Otherwise, the net impact of the entire program may turn out to be negative, instead of a brand-building exercise that rewards your best customers.