Gamification in Loyalty Programs: Empowering Customer Experience

Blog header Gamification
05.09.2022 research

Gamification in Loyalty Programs: an upcoming duo in the retail loyalty world. Despite its gain of popularity, gamification is still widely misunderstood and misapplied. Records show that up to 80% of gamification efforts fail to win over customers, due to poor design and unpleasant customer experience. 

Looking at the bright side, with a proper understanding of game mechanics and consumer loyalty, gamified loyalty programs can be the new most valuable player in your marketing strategy. Before we show you how to use it, let’s get a close-up look at how gaming and retail loyalty comes together. Let’s start playing! 

Gamification in Loyalty Programs. Say What?

What is gamification and what about gamification in loyalty programs? Well, as the name calls, gamification is when we take the essence of games, such as fun, play, challenges, and fantasy, and apply it to the real world. The retail industry is one of the leading industries in this aspect. Coincidence? We think not!  

Humans have been playing for decades, whether it’s pretend play, sports, board games, video games… You name it! Even though games vary to a great extent in terms of styles, forms, or goals, there is always a common factor. Have you ever noticed any recurring mechanisms across all of the different?

We call it the Holy Trinity: Challenge, Time, Competition

Challenge: Make them get what they want

Do you know why Candy Crush had such soaring popularity among all ages, especially adults? It’s because the levels are designed just to be tough enough to present a meaningful challenge and give a sense of accomplishment & achievement when players succeed. 

The same applies to gamified loyalty programs, as long as the challenges to obtaining loyalty rewards are neither perceived as too easy nor too hard, your customers will always be motivated to complete and master the tasks (Hollebeek, 2021). This “matching difficulty” mechanism in gamified loyalty programs helps to bring joy and playfulness to shoppers’ daily chores, reminding them that there’s always a well-earned, valuable reward waiting for them every time they go on their shopping trip. 

Remember to offer rewards that tie to your customers’ values and needs

Tick Tock: Make It Quick!

The timing of your rewards must be as quickly as possible after your customers have completed the “task”. If they have to reach a minimum spend to receive a free reward, that will make the trick. With the right mechanics and calculations, the trick can also be applied to redemption campaigns, when it’s necessary to collect stamps to redeem the rewards.

Timing needs to be perfectly matched to stimulate the ‘reward-seeking behavior’, leading to more frequent visits to the stores, and increased brand engagement through repeated purchases (Robson, 2015). An extra tip to stir up the fun: Your rewards will need to catch your shoppers’ attention and make them want to collect them all.

Competitions build community

Everyone loves a little bit of competition, don’t they? The urge of winning fuels participation in games and challenges (Robson, 2015). However, it’s not just purely about beating others and being the best, it’s also about the social aspect that comes with competition. 

Gamified loyalty program taps into the beauty of this basic human motivation by offering a limited-time rewards collection with limited quantity. Hence, every trip to your store is an engaging brand experience where shoppers compete against each other to become the first to complete the set! By encouraging them to also share their rewards on social media, you’re creating an entire community of collectors who can share, interact and be recognized for their hard-earned rewards. Ultimately, this results in an immersive brand experience. With a gamified loyalty program, you also create a community of shoppers interacting with each other about your campaign!

To game or not to game?

Now that we’ve discussed the theory, let’s be practical. How do gamified loyalty programs hold up against traditional ones? Luckily, science is always right. According to Hauser (2022), brands that upgraded to gamified loyalty programs reported an increase of 22% in brand loyalty and nearly a 50% spike in engagement! You also have to consider your audience. For instance, 40% of millennials say they’d stick to a loyalty program that included a competitive game or some form of social engagement (Hansen, 2022).

Now you know all about Gamification in loyalty programs. Are you ready to level up your next campaigns? 

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