Implementing a loyalty program can seem like an overwhelming undertaking. After all, business leaders who wish to forge tighter bonds with their current customers and attract brand new ones can't just enter into this process with the intention of simply deploying a plan that matches what others in their industry are doing. Instead, they need to focus on what elements they can introduce into their loyalty systems that will give them ample chance to stand out from the competition.
To become an industry leader customers shouldn't just be enrolled in loyalty programs, they should be truly engaged with them. This might seem easier said than done, especially if companies focus on what's worked in the past. Consumers have seen it all by now: They want experiences that are new, exciting and add value to their relationships with the brands they love. To achieve this, businesses should consider using gamification as a fresh and cost-effective way to distribute loyalty rewards to their target audiences.
According to Loyalty IP, there are two primary advantages to using gamification within the context of a loyalty initiative. First, these strategies are great for getting new programs off to a strong start. The source pointed out that to ensure the ongoing success of a loyalty program, companies need to achieve "rapid early engagement," or else that momentum will be much more difficult to achieve.
The news provider noted that AirMiles provides an example of how this has panned out in practice. The business has long been working on location-based loyalty partnerships with other merchants, but the challenge was how to get the word out to travelers and encourage them to actually take advantage of the new opportunities. AirMiles decided to provide loyalty rewards to customers who had the most check-ins at certain locations within specific periods of time. This made the idea of using a location-based app more exciting: Not only did users get benefits such as double miles, but they also had fun competing for a place at the top of the charts. By pairing extrinsic and intrinsic motivation, it's possible for more genuine engagement to be achieved.
Loyalty IP noted that the second reason gamification works as a marketing tactic is that it helps keep costs low by reducing the need for additional promotional solutions. Introducing a gaming element to a loyalty system makes those initiatives more visible and simpler to understand – plus, engagement becomes self-perpetuating, driven by the fact the customer is playing and enjoying an experience. Overall, the source noted that this leads to achieving ROI sooner.
What rewards should you use?
While part of the value of gamification lies in its ability to incentivize behavior and boost engagement without needing to be tied to expensive rewards, it is critical for companies to remember that often, players do want to receive something more than just a good time. A study by Saatchi & Saatchi revealed that 50 percent of the U.S. population between 18 and 44 years old play social games every day, and these individuals also share characteristics in terms of what encourages them to participate. The report stated that discounts were the most compelling motivator for winning a game, with 57 percent and 37 percent of respondents saying these rewards were "very compelling" or "somewhat compelling," respectively. Earning points toward a loyalty program (50 percent and 38 percent, respectively) also ranked highly.
Consumers are ready for new experiences that are truly immersive, enjoyable and rewarding. By revamping their loyalty programs to include gamification, companies can find more effective and meaningful ways to provide their customers with the valuable rewards they deserve, spread the word about their brand and win life-long fans.