Adding Gamification to Customer Loyalty Programs: Experts Offer Advice for Brands

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Gamification has the potential to make customer experiences more rewarding and interactive, and many brands are interested in learning if adding such elements to their loyalty programs and strategies will improve engagement. Indeed, it’s not unusual for customers to be presented with gamified elements during digital interactions with their favorite brands. Friend referral challenges, seasonal games, quizzes, and polls are seemingly ubiquitous.  

However, before jumping into the world of instant win games, spin-the-wheel promotions, and online “scratch-offs,” brands and marketing teams must explore what types of gamification could be authentically presented while vetting possible restrictions (e.g., industry regulatory guidelines) and risks.     

Loyalty360 spoke with supplier members and loyalty strategy experts about increasing member engagement through gamification, considerations for brands seeking to add gamification to their customer loyalty strategies, and maintaining brand integrity. 

Article contributors:  

  • Randy Hernandez, Vice President of Strategy, Brierley  

  • Aaron Lobliner, Chief Client Officer, CataBoom 

  • Steve Palladino, Chief Growth Officer, GroupFiO  

  • Chris Mills, Chief Revenue Officer, Talon.One 
     

Elevating the Customer Experience through Gamification 

While gamification has the potential to enhance customer experiences across various industries, its success depends on careful consideration of industry-specific factors, target demographics, and the nature of the products or services involved.  

“It’s essential to tailor gamification strategies to align with the goals and characteristics of each specific context,” says GroupFiO’s Palladino.  

He suggests the following consideration points for brands:  

  • Will gamification have universal appeal? Rewards, competition, and achievement are fundamental human drivers, but specific game mechanics and themes might resonate differently with various demographics.  

  • Are there industry-specific challenges? Industries with strict regulations, like finance or healthcare, might face challenges in implementing certain gamification elements due to compliance requirements.  

  • Who is the target audience? Considerations of age, cultural preferences, regions, etc., must be made. Various demographics will have different preferences in how they want to engage with/be engaged by a brand.  

  • Does gamification make sense for the product(s) or service(s) offered by the brand?  

  • Will gamification align well with the brand’s image and values?  

  • Is the right technology in place to support gamification, and does the target audience the brand seeks to engage have access to the technology required to participate?  

Brierley’s Hernandez agrees that gamification can make engaging with customers more fun, rewarding, and memorable.   

“It’s also a great way to create and reinforce more emotional loyalty with members. We’ve implemented gamified promotions, surveys, and challenges for multiple clients across many industries ranging from consumer packaged goods (CPGs) to eyeglass manufacturers and for direct-to-consumer as well as B2B programs. If done properly, application for gamification is virtually limitless,” says Hernandez. 

“Gamification appeals to the basic human psychological desire to compete, achieve, and be rewarded. We have built and executed gamification across over 10 different verticals for B2C, B2B, and B2E targets, seeing ROI across the board,” adds CataBoom’s Lobliner. 

 

Gamification — A Means To Trigger Engagement 

Games, like reward programs, can satisfy the human desire for status and achievement. Smart brands review essential elements of gaming that they can transfer directly to their loyalty programs.  

“Games are the ultimate tactic to engage loyalty members in between purchases and help to achieve program objectives,” affirms Lobliner.  

These objectives can include:  

  • Acquire New Members  

  • Drive Repeat Sales  

  • Increase Repeat Visits/Time Spent    

  • Inspire Brand Advocacy  

  • Engage Lapsed Members  

  • Motivate Point Earn or Burn  

The game itself isn’t as important as the value exchange that brands can create with the game experience. Lobliner sees the game as a means to trigger an engagement. It’s the combination of the game plus the incentive that helps enable behavior change in the customer.  

“An Instant Win game with chances to win prizes that are strategically curated or a simple offer can make the experience successful if aligned with your target audience preferences,” says Lobliner.    

Talon.One’s Mills explains that gamification can be as simple as awarding badges for purchases or as involved as creating an entire in-app game for users to play. The guiding principle is the same: gamification makes a serious process — i.e., accessing a website to find out more information or purchasing a product online — more attractive and compelling, which improves the likelihood that the customer’s interest will be held. Even better, it’s a tactic that can incentivize the entire customer journey, from acquisition to retention, while not jeopardizing the economics of the purchase.   

“Gamification boils down to understanding what behaviors are essential to your business and how to create incentive structures around these actions that tap into the mindset of competition and scarcity,” continues Mills.  

Additionally, incorporating gamification doesn’t always need to be a heavy lift. Gamification mechanisms like badges for reaching a certain number of loyalty points positively reinforce behaviors and appeal to a user’s inner collector. Adding a progress tracker or leaderboard to a brand’s app can help a member visualize progress within the program and motivate them to act — getting them closer to reaching the next tier or reward.   

Hernandez reminds brands that while a competitive spirit may contribute to a program member’s desire to play a game, not everyone is “in it to win it.” Many will play to try something new and maybe even socialize if that is part of the gamification strategy.  

“It’s important to keep in mind for any game you’re exploring for your loyalty program to provide a little something for everyone — bonus points for entering as well as the all-expense trip to the Super Bowl ‘for one lucky winner,’” Hernandez says. “Make it exclusive to your members, and ensure the gamification is consistent with your brand.” 

 

Develop a Gamification Strategy 

When developing a gamification strategy, Hernandez recommends starting with goals for the initiative. For example, what is the brand trying to drive with the campaign? Is it the next purchase or a seasonal promotion? Is the planned gamification designed to reengage lapsed or inactive members?  

“You may want to start as broadly as possible for gamification to ensure you get as many members engaged as you can and then gather performance insights to help fine-tune future more targeted efforts,” advises Hernandez.  

Lobliner emphasizes that brands need to keep the game easy to understand and familiar.  

“Understand and leverage human psychology. Gamification can take many forms but works best when intentionally designed to tap into people’s innate desire to compete, achieve, and be rewarded. To be most effective, marketers should keep these psychological factors in mind to create something that is both engaging and motivating,” explains Lobliner.  

He provides further tips to help brands better ensure their gamification efforts will achieve desired outcomes once implemented:  

  • Know the target audience and their motivations — this also helps determine prizing.  

  • Set clear goals, such as increasing brand awareness, generating leads, or driving sales.  

  • Design a compelling user experience.  

  • Measure results against baselines. Consider key metrics and performance indicators like user activity, time spent, completion rates, session duration, sales growth, customer acquisition, lead generation, and social media engagement.  

Like Lobliner, Palladino believes developing a successful gamification strategy requires careful consideration of various factors. He adds the following key considerations:  

  • Select game mechanics that resonate with users and complement the brand.  

  • Ensure that gamification elements align with brand values and image.  

  • Offer meaningful and achievable rewards that motivate participants; leverage customer feedback when reviewing and updating the reward system.  

  • Incorporate elements of competition to drive engagement, but ensure that it remains friendly and inclusive. Encourage collaboration in addition to competition to cater to different preferences.  

  • Design a user interface that is intuitive and easy to navigate.  

  • Establish mechanisms for users to provide feedback on the gamification experience.  

  • Ensure that the gamification strategy is inclusive and accessible to users with varying preferences, abilities, and backgrounds. 

Hernandez also recommends projecting performance based on prior campaigns (with or without gamification) and calculating the minimum lift required to — at a minimum — break even on the costs of the promotion.   

“If possible, consider setting up a test versus a control strategy where you send the same campaign to both cells, but only include the game in one,” suggests Hernandez. “We have typically seen gamified promotions and communications perform significantly better than those without.”  

 

Gamification and Maintaining Brand Integrity  

Among some brands, there is a concern that gamification could tarnish brand image by introducing themes like chance and fantasy. However, any perceived “danger” to brand integrity can be mitigated through a strategic, well-conceived approach to leveraging gamification.  

Palladino believes that gamification can be a powerful tool for engaging customers but also sees potential risks that could impact a brand’s image if not carefully managed. Some of the potential dangers might include: 

  • Misalignment with Brand Values 

  • Unintended Consequences (e.g., users exploiting loopholes or engaging in undesirable behaviors to game the system.) 

  • Alienating Certain Customer Segments 

  • Overemphasis on Chance 

  • Lack of Transparency 

  • Inconsistent User Experience 

  • Inappropriate Targeting (e.g., targeting vulnerable demographics or using gamification in sensitive areas such as health or finance) 

  • Neglecting User Feedback 

“Risks to brand integrity can be mitigated through careful planning, alignment with brand values, transparency, and responsiveness to user feedback,” says Palladino. “By being mindful of these potential pitfalls, brands can leverage gamification effectively while maintaining a positive and authentic brand image.”  

Lobliner and Hernandez agree that any gamification added to existing customer loyalty strategies needs to be aligned authentically with the brand.   

Overall, Lobliner doesn’t see gamification as posing a danger to brand integrity if designed with the brand’s standards, values, and target audience in mind. He believes that the creative concept, design, and types of prizing, offers, and rewards also contribute to the positioning of the brand.  

“This is a decision the brand owner needs to make; however, in most cases, gamification can work for nearly any product or service if designed consistently with the brand,” adds Hernandez. “For example, a beer brand would want to avoid gamification tied to the number of bottles consumed, but an in-app trivia game played with others online at bars and homes might reinforce the brand’s image of bringing friends and family together.” 

 

Gathering Zero-Party Data through Gamification   

With restrictions and regulations placed on collecting customer data affecting brand loyalty strategies, gamification has become an attractive source of zero-party data. Brands seek effective ways to tap into it, understanding that some gaming features can generate valuable data for brands to leverage. Loyalty360 asked our member-supplier experts how brands can use gamification and benefit from it.   

“Gamification, particularly through hosting fun quizzes on your website or app, can be a rich source of zero-party data,” shares Mills. “This helps you acquire valuable, permission-based information about your customers’ product choices and personal characteristics.” 

Mills goes on to share an example. JCPenney® uses online quizzes to better understand their users’ lifestyle preferences and shopping habits, and this additional information supplements existing transactional data. The quizzes also help boost the adoption of JCPenney’s loyalty program, as users are incentivized by gaining reward points for every quiz completed. Brands that would like to do the same can work with a quiz software and pull the data back into the customer database integrated with their loyalty program. 

Lobliner agrees. “Capturing preferences via trivia, personality quizzes, or simple games like CataBoom’s SwipeIt’s ‘swipe right, swipe left’ experience elevates the engagement and can capture critical zero-party data about your customers.”    

Hernandez offers another example. “Instead of fielding a standard pet owner survey, why not ask members about their pets — names, ages, and breed — to spin the pet food bowl for a chance at free pet food for life and 100 bonus points?”  

There is room for personalization in gamification, and Palladino points out that brands can allow users to create profiles within the gamified experience, including customizable avatars, preferences, and personal details. Furthermore, brands can gather data on user preferences, demographics, and interests, enabling personalized targeting and customization of the user experience. By incorporating storytelling elements where users make choices that impact the narrative, brands can gain insights into the decision-making processes, preferences, and values through the choices users make in the game. Additionally, soliciting feedback from program participants can provide valuable qualitative data on user satisfaction, preferences, and areas for improvement. 

“Brands should ensure that data collection is transparent, aligned with privacy regulations, and accompanied by clear value propositions for users who willingly share their information,” finishes Palladino. “Creating a mutually beneficial exchange between brands and users fosters trust and encourages ongoing participation in gamified experiences.” 

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