The Gamification of Loyalty Marketing

Loyalty rewards work: sign up, earn points, redeem. Buy more, earn more - it's that simple, everyone can do it but not everyone does. Enter gamification.

Gamification was the marketing buzzword of 2011, but what exactly is it and how is it different from a traditional loyalty rewards program? Basically, gamification is the effort to get the consumer to engage with you by offering an earned incentive, turning consumer engagement into a game and changing consumer behavior in the process. As opposed to simply buying a product and earning rewards the consumer can earn them in creative ways all the while providing valuable services and information to your company.

To market effectively you want to know the most you can about your customer base, and you also want those customers talking about your company and products. Gamification takes those two ideas into account:

• Rewarding consumers for providing personal information, filling out surveys and registration forms and exploring multiple pages on your site. Sometimes boring and mundane website activities for the consumer but potentially big marketing benefits for the business.
• Encouraging consumer sharing by rewarding specific valuable actions: posting accomplishments, achievements, recommendations and recruiting (new customers) on their various social networks. Sharing and posting are actions that may or may not happen automatically but can be nudged into happening by offering a reward.

To get the consumer to provide personal information or answer a survey willingly can be tough, add a status bar showing how far they've come and how close they are to earning a reward and you've got yourself a game. Some people will be interested enough by the game itself, simple competitive nature and the desire to win. Others will be looking for a reward. Based on what's being offered, the value to the consumer is what's going to determine the depth of engagement and sharing. Virtual rewards are big right now: check-ins, points, levels, badges, etc. As gaming moves forward however, the gamer is becoming more sophisticated and expecting more for their time. Real rewards with real value are going to be the driving force behind engagement. Does anyone really want to be known as the Mayor of their local coffee shop? If it comes with a gift certificate, a discount or a freebie you can bet consumers will be more likely to pursue the title. If it's tied to a loyalty program where repeat visits and engagement are rewarded at increasing values you'll likely have a long-term customer. Reward recruiting new customers and ideally you'll end up with many new customers who, by playing the game and earning rewards, will all be marketing for you.

Gamification. It's a new word for an enduring concept: rewarding loyalty. It's as simple as that.