This blog is a detailed checklist for gamification in Loyalty programs
Nearly 90% of GenZ engage in some kind of games, and with the advent of world wide web gaming is nothing short of an international social experience. This data is important to keep in mind because marketers can leverage this to form marketing strategies around it.
In today’s competitive marketplace, businesses constantly seek innovative ways to build stronger customer connections. One strategy that gains traction is gamification in loyalty programs. By infusing elements of play and competition into traditional loyalty schemes, companies can enhance customer engagement, foster brand loyalty, and drive repeat business.
Customers are also bored of traditional, straightforward loyalty programs and may not show interest in your loyalty program if they lack gamification.
Benefits of Gamification in Loyalty Programs
1. Increased engagement: Reflect digital found in a study that 60% of their survey respondents were more likely to buy from a brand that incorporated games in their shopping experience. Gamification adds an element of fun and excitement to loyalty programs, capturing customers’ attention and encouraging them to participate actively. Whether earning points, unlocking rewards, or competing with friends, gamified elements make the experience more enjoyable and memorable.
2. Enhanced loyalty: Snipp saw a 22% increase in brand loyalty post gamification. By rewarding customers for their interactions and purchases, gamification reinforces positive behaviours and strengthens the bond between the customer and the brand. Customers feel valued and appreciated, leading to increased loyalty and advocacy.
3. Improved customer experience: Gamification creates a more dynamic and interactive experience for customers, making them feel more connected to the brand. Personalized challenges, progress tracking, and exclusive rewards cater to individual preferences, enriching the customer experience.
4. Data Insights: Gamified loyalty programs provide valuable data insights into customer behaviour, preferences, and engagement patterns. By analyzing gameplay data, businesses can better understand their customers and tailor their marketing strategies accordingly.
5. Word-of-mouth marketing: Engaging and rewarding experiences encourage customers to share their achievements and experiences with others, generating positive word-of-mouth marketing. Friends and family members are often encouraged to join the fun, further expanding the reach of the loyalty program.
The Psychology Behind Gamification in loyalty programs
1. Intrinsic motivation: Gamification taps into intrinsic motivators such as achievement, autonomy, and mastery. By setting clear goals, providing feedback, and offering rewards, gamified experiences satisfy individuals’ innate desires for progress and accomplishment.
2. Social influence: Human beings are social creatures influenced by the actions and opinions of others. Gamification leverages social dynamics such as competition, collaboration, and social recognition to encourage desired behaviours and foster a sense of community among participants.
3. Behavioral conditioning: Gamification applies principles of behavioural psychology, such as reinforcement and conditioning, to shape customer behaviour. Rewards act as positive reinforcements, strengthening desired behaviours like repeat purchases and brand engagement.
4. Emotional engagement: Games evoke powerful emotions such as excitement, anticipation, and satisfaction. By incorporating elements of storytelling, challenge, and surprise, gamification triggers emotional responses that deepen the customer’s connection to the brand and the loyalty program. According to Mastercard, a brand saw a 60% increase in app customer engagement and a 6x increase in purchase frequency for game participants versus non-participants in the first 12 months.
Gamification offers a compelling approach to enhancing loyalty programs, leveraging the principles of psychology to create engaging and rewarding experiences for customers. By understanding the benefits and psychology behind gamification, businesses can unlock new opportunities to drive customer engagement, foster brand loyalty, and achieve sustainable growth.
Checklist for Gamification in Loyalty Programs
1. Select the type of rewards you would like to give
2. Create engaging challenges
3. Promote program awareness
4. Communicate your reward program
5. Monitor and analyze
6. Iterate and improve
Let’s go through the checklist one by one to understand each aspect.
Select the type of rewards you would like to give
There are multiple ways to reward customers. The following are the most common types of rewards-
- Points system
- Discount
- Reward Credits
- Badges
In gamifying a loyalty program, it’s crucial to address various elements to ensure effectiveness and engagement. Let’s dive into how you can incorporate points systems, discounts, reward credits, and badges to create an enticing and rewarding experience for our customers.
Points System
Implementing a points system is fundamental to gamifying a loyalty program. Customers earn points for various actions such as purchases, referrals, social media interactions, or completing challenges. These points serve as a tangible representation of their engagement and loyalty.
Discounts
Discounts act as incentives that drive immediate action and increase customer satisfaction. By incorporating discounts into the gamified loyalty program, you can motivate customers to make purchases and deepen their engagement with the brand. To effectively utilize discounts:
Reward Credits
Reward credits add another layer of value to the loyalty program, allowing customers to accumulate credits that they can use to buy products. Whether it’s free products, exclusive experiences, or gift vouchers, reward credits enhance the perceived value of the program and foster long-term loyalty.
Badges
Badges serve as virtual achievements that recognize and celebrate customers’ accomplishments within the loyalty program. Whether it’s reaching a particular milestone, completing specific challenges, or demonstrating loyalty over time, badges provide a sense of accomplishment and status. To leverage badges effectively:
By incorporating these elements into the gamified loyalty program, you can create a dynamic and rewarding experience that captivates customers, drives desired behaviours and cultivates long-term loyalty.
Each type of reward has its pros and cons and may have a different impact on user perception. For example, 10000 points need to be converted into some other form, which may lead to dissatisfaction while using them. For gamification, the best option would be to offer a credit-based reward system that will keep customers engaged for longer. However, you can change strategies depending on the challenges or requirements.
Create engaging challenges
Creating an engaging challenge is another crucial step.
Types of challenges you can incorporate
- Rewards based on in-store activities
- Tier-based loyalty challenge
- Spin to win
- Scratch codes
- Social media challenges
- Seasonal games
- Quizzes and polls
- Q.R. code challenges
Rewards based on in-store activities
You can leverage the list of credit-earning rules you provided to gamify a loyalty program in several ways. Here’s how you can use each rule:
- Sign up: Offer a certain number of credits as a sign-up bonus when customers join your loyalty program. This provides an initial incentive for customers to join.
- Subscribe to newsletter: Award credits to customers when they subscribe to your newsletter. This encourages customers to stay engaged with your brand and receive updates on promotions and new products.
- Place order: Offer credits based on the orders placed. You can offer credits depending on order numbers.
- Birthday: Give customers a special birthday bonus in the form of extra credits or a discount on their birthday month. This makes customers feel valued and encourages them to purchase during their birthday month.
- Product review: Encourage customers to leave reviews by offering credits for each review they submit. Positive reviews not only help other customers make purchasing decisions but also contribute to building trust in your brand.
- Specific product purchase: Provide extra credits for purchasing particular products or product categories. This can help promote specific products and increase sales for items that you want to highlight.
Tier-based loyalty challenge
A tier-based loyalty challenge means that customers have to earn a certain amount of credits or spend a certain amount of money to buy products to get accepted into a tier. In this type of challenge, customers are incentivized to reach different tiers or levels of loyalty by completing specific actions or spending certain amounts of money within a specified timeframe.
Spin to win
A “Spin to Win” challenge in gamified loyalty programs is a popular mechanic where customers have the opportunity to spin a virtual wheel or roulette-style spinner to earn rewards or prizes. This challenge adds an element of chance and excitement to the loyalty program, enticing customers to engage with the brand in hopes of winning valuable incentives. A spin-to-win challenge is usually a strategy.
Source: https://www.justuno.com/blog/how-to-create-spin-to-win-popups-that-convert/
Scratch codes
Virtual scratch codes work very similarly to actual scratch cards. Customers scratch the card and earn a reward if they are lucky. You can also allow them to use multiple scratch codes at once and win something if they find a combination of codes.
Google pay scratch cards
Social media challenges
Social media is a great platform to engage with your customers and get them to participate in
Loyalty programs. You can ask your customers to like, share your social media page, share social media content, comment on your posts and give them a reward or a giveaway prize in return.
You can also create leaderboards of your followers and select a few followers for a gift or a giveaway.
Image for reference, source: Boat’s instagram story
Seasonal game challenges
These challenges can be related to seasons or even festivals. If it’s winter season, create a challenge around the winter theme and give winter-related coupon codes. You can do the same for festivals as well.
Seasonal game challenge, source : https://m-wise.eu/news/loyalty-program-gamification/
Quizzes
Quizzes usually tickle consumers’ brains, and customers attempt them in order to win prizes. The quiz can be related to any recent event that interests your customers, or you can create the quiz based on your products. You can conduct weekly quizzes and nudge customers to visit your website to play the quiz and earn a reward or a gift.
Q.R. code challenges
Q.R. Code challenges are another exciting way to engage your customers. You can share a Q.R. code and encourage customers to scan it to win a prize. Q.R. codes usually take you to a URL where you can ask customers to fill out forms or participate.
QR code challenge- source: https://www.uniqode.com/blog/trending-use-cases/qr-codes-for-loyalty-programs/
Promote program awareness
Launching a gamified loyalty program is an exciting process, but its success depends on effectively promoting awareness among your target audience. Here’s how you can spread the word and generate enthusiasm for your program-
1. Multi-channel Marketing Campaign
Develop a comprehensive marketing campaign that leverages various channels such as email, social media, website banners, and in-store signage. Consistency in messaging and branding across all channels is critical to maximizing impact.
2. Social Media Engagement
Utilize social media platforms to reach a wider audience and spark conversations about your gamified loyalty program. Share engaging content, sneak peeks of rewards and challenges, and encourage user-generated content and testimonials. (User generated content on social media is 50% more trustworthy than any content.)
3. Incentivize Referrals
Encourage existing program members to refer friends and family by offering incentives or bonus points for successful referrals. Word-of-mouth remains a powerful tool for spreading awareness and credibility.
4. Collaborate with Influencers
Partner with relevant influencers or brand ambassadors who align with your target audience to endorse and promote your loyalty program. Their endorsement can lend credibility and reach your program. Fifty three percent people say that influencers affect their buying decisions.
5. Launch Event or Promotion
Generate buzz around your loyalty program by hosting a launch event or special promotion. Offer exclusive perks or rewards to early adopters to incentivize sign-ups and participation from the outset.
6. Email Marketing Campaigns
Craft compelling email campaigns to communicate the benefits of your gamified loyalty program to your existing customer base. Highlight the rewards, challenges, and exclusive offers available through the program to entice participation.
8. In-store Promotions
Utilize in-store signage, POS materials, and staff training to educate customers about your gamified loyalty program. Offer incentives for in-store sign-ups or purchases to drive immediate engagement.
By implementing these strategies, you can effectively promote awareness of your gamified loyalty program, attract new members, and drive ongoing engagement and participation. Remember to continuously monitor and optimize your promotional efforts based on feedback and performance data to ensure long-term success.
Communicate rewards
Promoting your reward program is a crucial aspect of engaging customers and encouraging participation. However, effective communication goes beyond just boosting the program itself; it involves clearly articulating the rewards customers can earn for their actions and maintaining ongoing communication even after rewards are earned.
1. Clear communication of reward: Before launching your loyalty challenge, it’s essential to clearly communicate what rewards customers can expect to receive for completing specific tasks or reaching certain milestones. This clarity helps set expectations and motivates participation. Whether it’s discounts, free products, exclusive access, or other perks, customers should understand the value they stand to gain.
2. Reconnect and update: After customers have participated in the loyalty challenge and earned rewards, communication shouldn’t stop. Utilizing communication channels such as social media platforms, email, text messages, and online messengers allows you to reconnect with customers and provide further updates. This ongoing engagement helps maintain their interest in the program and keeps your brand at the forefront of their minds.
3. Social media platforms: Social media is a powerful tool for engaging customers and sharing updates about your loyalty challenge. Posting about rewards earned by participants, highlighting success stories, and announcing upcoming challenges or events can all keep customers engaged and excited about your program.
4. Emails: Sending personalized emails to customers congratulating them on their achievements and detailing the rewards they’ve earned is another effective way to communicate. Additionally, you can use email to provide updates on future challenges, new rewards, or other relevant news.
5. Text messages: Text messages offer a direct and immediate way to communicate with customers. Sending text notifications about rewards earned or upcoming challenges can prompt quick action and keep customers engaged with your program.
6. Online messenger: If your business utilizes online messaging platforms, such as chatbots on your website or messaging apps like WhatsApp, you can leverage these channels to communicate with customers about their rewards and provide assistance or information as needed.
Overall, effective communication throughout all stages of your loyalty challenge, from promotion to reward distribution and beyond, plays a vital role in keeping customers engaged, fostering loyalty, and ultimately driving success for your program and your brand.
Apart from this, there are other aspects that Shopify merchants should take into account. They are the following-
- If the app or service provider you are going to use for rewards has a mechanism to create multiple earning rules and spending rules.
- What marketing tools do you use or plan on using
- Do you have physical outlets and use a POS system?
We will cover the points above in detail in another checklist specifically catering to Shopify merchants wanting to use Flits for their loyalty program needs.
Monitor and Analyze Performance
Once you have launched your gamified loyalty program, you need to start tracking its performance. Many loyalty program apps provide an inbuilt analytics dashboard that gives you an overview of the performance.
It would be best if you looked out for the following metrics-
- Enrollment rate: The enrollment rate assesses the portion of customers who register for your loyalty program relative to the total customer base. This key performance indicator (KPI) is essential for gauging program expansion and evaluating the efficacy of marketing and promotional endeavours. A high enrollment rate signifies robust customer interest and involvement.
- Point issuance ratio: The point issuance ratio indicates the proportion of your products/services that are purchased using loyalty points. You need to see how many of your customers get convinced by your loyalty program and make a purchase after it.
- Average order value: The average order value, alternatively referred to as the average purchase value, represents the average amount of money spent per customer transaction across different channels, including websites, mobile apps, or traditional in-store purchases.
- Redemption rate: The redemption rate is a metric analyzed by loyalty managers to assess the ratio of points redeemed for rewards compared to the total number of points issued within a specific period, such as a month or a year.
- Customer Lifetime Value (CLV): Customer lifetime value (CLV) stands as a crucial metric estimating the comprehensive value a customer will contribute to your business over their entire engagement with your loyalty program. By computing the CLV, you can evaluate the enduring profitability of your customers and allocate resources appropriately.
- Churn Rate: The customer churn rate represents the proportion of customers who cease their engagement with your loyalty program within a specified timeframe. Elevated churn rates suggest that customers perceive insufficient value in your program, prompting them to discontinue their participation.
There are many other metrics other than those mentioned above. You should keep a few of these metrics in check depending on your goals.
Iterate and improve
The last checkbox entails iterating and enhancing your campaigns. This crucial step involves analyzing the performance of your initiatives and refining them for better outcomes.
Start by identifying the campaigns that gave successful results. Assess the metrics provided earlier, such as customer engagement, retention rates, issuance ratio, etc. These metrics offer valuable insights into the effectiveness of your strategies. Additionally, leverage analytics data provided by the apps integrated into your program. This data can offer a more comprehensive view of customer behaviour and preferences.
For campaigns that didn’t meet expectations, it’s essential to understand the reasons behind their underperformance. Dive into the analytics to pinpoint areas of weakness or inefficiency. Was the message clear? Were the rewards enticing enough? Did the timing of the campaign align with customer behaviour patterns?
Once you’ve identified areas for improvement, devise strategies to enhance these campaigns. This could involve tweaking the messaging, adjusting the reward structure, or refining the timing and frequency of promotions. Incorporate feedback from customers and insights gained from data analysis to inform your decisions.
Remember, the key to success lies in continuous iteration and improvement. Stay agile and adaptable, responding promptly to changing customer needs and market dynamics. By refining your campaigns based on insights and feedback, you can ensure that your gamification loyalty program remains effective and impactful over time.
You can also go through this checklist.
Gamification presents a dynamic and practical approach to revolutionizing loyalty programs. By understanding the benefits and psychology behind gamification, businesses can foster deeper connections with their customers, drive engagement, and cultivate brand loyalty.
Through elements such as points systems, discounts, reward credits, badges, and engaging challenges, companies can create memorable and rewarding experiences that resonate with their audience. Moreover, effective promotion, clear communication of rewards, and diligent monitoring and analysis of performance are integral to the success of gamified loyalty programs.
Embracing gamification not only enriches customer experiences but also unlocks new opportunities for sustainable growth and differentiation in today’s competitive landscape.
Implement gamification today to delight your customers, drive repeat business, and propel your brand forward with gamification in your loyalty program strategy. Ready to take your loyalty program to the next level? Get in touch with Flits or install our Shopify app.
