Gamifying Your Loyalty Program for Fun and Profit

Pokemon Go has temporarily taken over the Internet. Since its release in the United States, the location-based augmented reality game has filled social media feeds with pictures of little digital creatures. Players of the game explore the real world while looking at their mobile device for Pokemon to capture. While there are some concerns about safety (and possibly productivity), the early verdict is that the game encourages meeting people, making friends, and engaging in friendly competition.

So what can business owners learn from this? Plenty!

Gamification and Customer Engagement

One of the best ways to engage with customers and built brand loyalty is to give customers a way to emotionally engage. Without some sort of emotional engagement, a customer has no reason to patronize a business other than price. This is why the “brand experience” is so often vital to a company’s success.

Many businesses have turned to gamification to build brand experience and boost customer loyalty. Gamification literally makes marketing and customer into a game, encouraging the customer’s competitive and participatory instincts.

Coffee chain Starbucks has become a prime example of gamification done right. Their marketing techniques go beyond the basic loyalty program punch card. Starbucks incorporates mobile technology into their strategy, rewarding users for “checking in” at Starbucks locations and awarding badges or other forms of recognition for frequent purchases.

Hard numbers support the benefits of gamification. Research shows that a desire for rewards accounts for nearly a third of customer participation in loyalty programs. Over half of customers prefer smartphone or mobile integration into the loyalty program experience. Rewards that offer some sort of exclusivity or “VIP status” are more likely to incentivize customers to participate in a loyalty program. The most telling statistic: customers are 82% more likely to shop at a store with a loyalty program than a store without one.

Successful Gamification

No one marketing strategy fits all. So how do you create a loyalty program that will increase loyalty and boost revenue?

Above all, a well-executed gamification strategy should be fun for the customer. A customer who’s having fun is more likely to participate in the program. Ideally, a loyalty program should offer rewards to as many customers as possible, encouraging competition and giving the customer goals to strive for. These goals most often take the form of badges, unlocked benefits, or other rewards that seem exclusive.

Your loyalty program should also:

• Educate customers about your brand and products
• Guide your users toward using more of your products
• Make customers into “brand ambassadors” who will spread word of mouth.

A gamification strategy should also include a way to collect and interpret customer data, as well as provide a means of feedback. Finding out what customers do and don’t like about your loyalty program is critical to its success.

Pitfalls of Gamification

Of course, companies must be careful how the choose to gamify their marketing. Some businesses have tried crowdsourcing various aspects of their business, turning to the Internet for input on everything from logo design to choosing names for products. While this tactic has sometimes proven successful, it’s also produced memorable disasters for the companies in question. While customer participation and engagement is a good thing for business, putting customers in charge of high-impact business decisions, even through something as innocuous as a contest on the Internet, may not be.

Reaping the Rewards

Companies everywhere are learning the benefits of gamifying their marketing strategies, from Google to the US Army. Some companies, like Mint, make gamification the entire focus of their business, using goal trackers and charts to incentivize customer participation.

There are over 140,000,000 active gamers in the United States. Does your loyalty program need an update?