How to Gamify and Improve Loyalty

by Kate Enright

So first off, what is gamification? To give a quick overview, it is the integration of traditional marketing techniques with the psychology of game mechanics. There are many ways to interpret this and many methods have been used, a lot of which have been proven extremely successful. The game aspect usually involves setting goals for users that mean marked achievements, status levels, awards, badges, rewards staircases, and leader-boards. The premise here is that through these methods, you can boost customer loyalty by gaming in non-traditional environments. In turn engaging customers by creating competition/drive where there otherwise wouldn’t be.

It has been proven that human beings are happiest and most appreciative when they earn something as opposed to when they are given it for free. Giving free items through promotion does often ensure that people visit your store/site that day, but what about keeping them coming back? Gamification will put you in the position to build a loyal and repetitive fan base that becomes, for want of a better word, “addicted” to your loyalty system. There are different grades of this, from point earning and prizes to as simple a system as LinkedIn’s “Profile Completeness” bar.

According to Neilson, games are the second most frequent internet activity in the US after social networking. Apparently Americans are spending over 400 million hours gaming now and 900 on social networks. M2 Research forecasts the gamification market in 2012 to reach $242 million and climb to $2.8 billion by 2016. Enterprise gamification is quickly gaining share of the overall gamification market and is set to capture 38% of gamification revenue in 2012. In 2013, enterprise gamification will exceed consumer gamification revenue.

Start-ups in particular have taken to gamification as a means of customer acquisition through sheer virality. With start-ups like Foursquare using gamification to build unprecedented early customer engagement, this is no surprise. In fact Foursquare has gone on to prove that it itself as a massively useful tool for other businesses to improve customer bases through gamification. A burger restaurant in the US, AJ Bombers, has become a global talking point after a whirlwind Foursquare check-in campaign. Guests check-in at the restaurant and earn badges. Owner Joe Sorge told Loyalty 360 that sales of Foursquare promoted menu items increased by 30% throughout the campaign. Due to the popularity of the campaign Bombers ended up creating a “Loyalty Royalty” campaign for customers who checked in most frequently. Bombers royalty could build their very own menus, name items after themselves and even tweak recipes to suit them for their month at the top.

So where do you start? Well firstly, you must decide what exactly it is that will earn the customer the points/level increases/profile improvements etc. that provides them with the end reward you’re offering. So what will it be? Tweets, Check-ins, comments, posted pictures. For different types of businesses these needs are entirely different. Once this “grind” has been decided, from there you need to create the point system you want, this will help you to track behavioural patterns amongst consumers and build up your knowledge of them over time. So whether it is earning a point for every tweet or earning a badge for answering a question, this system needs to be of value to both you and your audience. Next, you need a reward system, there was a time when people responded very well to tangible rewards such as merchandise, discounts, promotional giveaways, but in the gamified world rewards that mean something in a more deep-rooted emotional sense often are the key to success. Something that money can’t buy. Think about Nike’s “Nike+” campaign. This campaign tracks users’ activities, goals, performance and successes through the Nike Fuel Band. Users can input their goals and the band turns green when they have achieved their goal for that day. The competitive nature of sharing your achievements in a social setting and earning rewards through the app becomes a highly addictive practice for users.

Take a look at StinkDigital’s innovative take on the Nike+ band for measuring the health of your twitter account!

StackOverflow, the free Q&A site for programmers promotes the answering of other users’ questions by providing badges to user on their site. A number of different factors dictate the rewards and they have grades of badge from bronze which are easy to earn up to gold which are rare and difficult to obtain. The whole system works off a status based system, once you earn the “trust” of the moderators you have more input into the site.

Using gamification upon release for startups can mean the difference between instant virality cheaply and spending all your capital on expensive marketing campaigns, but it must go beyond simply a quick game to win you a prize. The most successful campaigns have been the ones that provide a deeper benefit to the consumer, whether it is social recognition as with Foursquare and Nike+ or earning respect from colleagues and peers as with StackOverflow.

Traditional loyalty programs may very well be on their way out, with the widespread and intelligent introduction of gamification and “non-cash” incentives taking their place. Engaging users through a deeper, more psychologically meaningful avenue could save many start-ups from failure.