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Customer loyalty gamification

4 mins
loyalty gamification image

Key Takeaways

Gamification is a buzzword that keeps growing in popularity around customer engagement and brand loyalty. As a result, many brands are asking the question, “Is gamification worth the hype and should I invest in a gamification strategy?

The definition of gamification is: the application of typical elements of game playing (e.g. point scoring, competition with others, rules of play) to other areas of activity, typically as an online marketing technique to encourage engagement with a product or service. When starting down the gamification path, brands often have two primary goals: creating brand engagement and improving brand retention.

Here’s my hypothesis: “all games come to an end.” Gamification can initially create a sense of excitement and obsession with winning a prize or leading a leader board. However, as with most games, there can only be a few winners, and most consumers grow tired of never winning. For brands, this creates a high risk for attrition. If opting to build engagement and retention strategies around gamification, brands can bet that without long-term loyalty incentives, the novelty of leaderboards and prizes will wear off, and customers will be left with a monotonous value proposition.

When supporting a brand’s decision to invest in gamification, my personal recommendation is to use this marketing tactic as a complement to your broader loyalty strategy; leveraging brand engagement and potential assets and partnerships to keep your program fresh and exciting. The brands that execute gamification properly typically use one of two strategies: Purchase Driver or Lifestyle Engagement.

Purchase Driver – Gamification Strategies

Many brands are launching purchase gamification promotions to drive short-term behavior changes (ex. product awareness and trial, purchase frequency for a period, etc.). These promotions are a fun way to keep a loyalty program engaging; communicating brand value and offering quick recognition upon completion. In addition to driving consumer engagement, this gamification strategy enables a higher flexibility for test & learn offers. Gamification analysis enables brands to receive immediate consumer feedback to further influence their service and product offerings. With access to this data, do communicate to the consumer the value of their participation. Two areas of caution when launching purchase driver gamification, don’t set it and forget it with a one-size fits all strategy. Brands that successfully engage their consumers realize 63% lower customer attrition and 55% higher share of wallet. At Kognitiv, we suggest that brands with medium-to-high purchase frequencies and broader product offerings explore this method of gamification vs. low purchase frequency brands, as it naturally lends itself to a higher variety of games and offers.

Lifestyle Engagement – Gamification Strategies

For industries where the purchase frequency may be lower and basket sizes are higher, many brands leverage gamification to keep their brand top-of-mind between purchase periods. To do this, brands must go beyond their typical product or service offering and look at ways to create a lifestyle movement. This requires a deeper look at customer goals and passions around their initial decision to buy a brand’s product or service. At a rudimentary level, does a consumer purchase your brand to become healthier / save them time / elevate their status / have fun / etc.? The answer to this question often drives the strategy for lifestyle engagement. Opposite to purchase driver gamification strategies, lifestyle engagement strategies often use short-term wins to achieve a long-term brand & lifestyle marriage. Pulitzer prize-winning reporter and best-selling author Charles Duhigg writes, “Small wins fuel transformative changes by leveraging tiny advantages into patterns that convince people that bigger achievements are within reach.” Gamification can be leveraged to draw the connection between individual goals and passions and long-term brand purchases.

To help unlock the right gamification strategy for your business, we’ve created an easy tutorial. Simply start with your brand’s purchase frequency, and from there, you’ll be asked to assess your brand engagement and potential assets and partnerships. The output is a straight-forward recommendation for your gamification strategy

  • Low Purchase Frequency Industries (consumers purchase with your brand on a semi-annual+ basis):If gamification is a consideration for a low purchase frequency industry, focus gamification strategies on lifestyle interactions. Learn more about if gamification could be right for you.
  • Medium Purchase Frequency Industries (consumers purchase with your brand on a monthly to quarterly basis): If gamification is a consideration for a medium purchase frequency industry, focus gamification strategies on driving purchase habits as well as lifestyle interactions. Learn more about if gamification could be right for you.
  • High Purchase Frequency Industries (consumers purchase with your brand on a daily to weekly basis):If gamification is a consideration for a medium purchase frequency industry, focus gamification strategies on driving purchase habits. Learn more about if gamification could be right for you.

When executed correctly, gamification creates a feeling of immediate gratification. It makes progress tangible and can create emotional connections to a consumer’s goals and passions. And just because all games come to an end doesn’t mean we shouldn’t enjoy the ride while playing.

To create brand loyalty through better experiences, Kognitiv uses its SmartJourney® methodology, taking a holistic and personalized customer-centric approach, where each brand interaction is designed to create a meaningful moment and ultimately drive advocacy and long-term customer growth.

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