The fundamental goal of every loyalty program is to engage the customer. How do you do that? The equation seems ridiculously simple — excitement equals engagement. However, a recent study by eMarketer would seem to indicate things just aren’t adding up for many program members; while average consumers belong to slightly more than 13 loyalty programs (an increase since 2013), they actively participate in only about six (a decrease since 2013).
Not an impressive stat if you are in the loyalty space. The goal of the program is to drive engagement and over half of them are failing for consumers. If excitement equals engagement there must be a lot of consumers bored by their brands’ loyalty program. The solution for many of these failing might just be building more gamification into the platform.
In the eMarketer report, Ankit Shah, managing director and partner of gamification company Dopamine, explains the appeal of gamification: “Loyalty hinges on this one caveat: Nothing is fun forever. The loyalty process must be constantly refreshed to make experiences fun and interesting regardless of what they look like today or how ‘sexy’ they are today.”
Gamification works to build engagement for a number of reasons:
- Deepens engagement through competition which is one of the key elements of a best-in-class loyalty program. Tactics like sweepstakes, auctions, and daily deals allow program participants to compete for rewards, and feel like winners when they earn a reward.
- Plays well in a mobile world. Mobile is the next ascendant wave of the digital revolution, with more consumers interacting with brands and loyalty programs through mobile devices. Gamification is a perfect fit for consumers who already prefer mobile as their point of access to the Internet and the brands they already prefer. Companies must choose to create unique stand-alone platforms for their loyalty program or build within an existing platform. When possible, I encourage clients to build within an existing platform to increase the odds of a quick assimilation.
- Helps build an emotional connection to the program and brand. Anyone who’s ever watched a sporting event of any kind can easily understand the emotion-building power of competition. Consumers, especially younger generations, crave that emotional connection to their favorite brands. In fact, a 2015 survey by CrowdTwist found nearly half of Gen X Internet users and slightly more than half of millennials consider themselves “extremely” or “quite” loyal to their favorite brands.
- Gives program participant’s perceivable results. Consumers want to know they really are being rewarded for their loyalty, and gamification gives them evidence they can see, feel and interact with.
- Easy measurement. Due to the digital nature of gamification, it’s easy to measure and improve upon. If program members aren’t engaging, it’s much easier to test and determine if it’s the rewards that aren’t appealing or the gamification elements that aren’t hitting the spot. By testing, companies can tweak their program to fit their exact audience rather than relying on what worked for someone else.
Despite its broad appeal for consumers, few loyalty program marketers are using gamification to its full potential — yet. Only a third of retailers are using gamification in their loyalty programs, according to a study by Boston Retail Partners. Within the next five years, that number is projected to rise to 87%, representing an increase of 181% overall, the survey says. Gamification applies game-design thinking to loyalty programs to make them more fun and engaging for participants, BRP explains in its “CRM/Unified Commerce Survey.”
If your program is struggling to live up to its billing or you think you could still do better, it might be wise to look at adding gamification into the mix.