What is gamification?
… and how do loyalty programs include gamification to improve engagement, performance and ROI?
Mary Poppins said it quite nicely in 1964:
It’s no secret that keeping customers long term makes is key to retail profitability. What if you could double or triple their current stick rate? What if you could get them to buy twice as often? Or increase their average ticket size in 20%?
How much more actual profit would that give your business?
You do the math.
That’s why so many retailers have launched their own loyalty program in recent years.
In our webinar with Forrester VP and Principal Analyst Mary Pilecki we learned that as much as 73% of brands today have loyalty initiatives.
The problem with many of these programs is that they are basic, unimaginative loyalty points systems.
Do they work? Maybe!
But here’s a better idea:
Instead of ONLY trying to entice customers and loyalty program members with meaningless points that get accumulated “somewhere” and are rarely redeemed, get smart about making your loyalty program truly engaging.
To do this, refocus on your customer data. This data is going to tell you the real story behind unengaged and lapsing customers. Then, wherever applicable, start improving the engagement rate of your loyalty program members.
12 powerful gamification ideas for retail
#1. Progress bars
If progress within your loyalty program is linear, meaning it has a start and a finish point, progress bars make a lot of sense. This can either mean a percentage bar to show customers how far they’ve made it in the overall process, or other ways of visualizing progress like in the image below.
#2. Badges, awards, and certificates
For non-linear progress (like completing different actions within your loyalty program), badges, titles and certificates tend to work well.
With badges, each significant piece of progress can be recognized and celebrated, so members can see what they have achieved. You can also give cool names to your badges that are coherent with your retail brand.
Bear in mind that badges are used differently from tiers.
Tiers represent overall progress within your loyalty program and give access to different member benefits. Badges are awarded for specific actions and are a personalized recognition based on consumer behavior.
#3. Dashboard displays
Another non-linear method of loyalty gamification is the dashboard display, where customers see their badges, awards or even progress percentages displayed all in one place within your app or customer portal.
If this progress dashboard is the first thing they see when they log into the app or customer portal, they will be reminded of where they are standing and how much further they can reach.
#4. Checklists
Checklists are extremely powerful, and many people have an immense pleasure when checking off items from their list. Use this hack in human psychology in favour of your loyalty program.
Offer your customers ways to engage with your brand that involve ready-made checklists and help them feel good about themselves.
Download the gamification cheatsheet
#5. Leaderboards
Leaderboards are definitely a great way to bring out the competitive side of your loyalty program members. After all, who doesn’t want to see their name displayed in honor?
Although our natural tendency is to make a big leaderboard that can showcase a ton of people, experts recommend keeping leaderboards small and elite.
#6. Competitions
This is a similar tactic to #2 on this list. The difference is all in how you choose to present it to your program members.
If you’re using badges or titles for progress tracking, the words you use might be something like “Celebrate reaching the next tier!”
If you’re using badges or titles to foster a bit of competitive spirit, you might lean towards words like “Can you collect them all?” or “Achieve the highest rank.”
#7. Smart loyalty points
Loyalty program points are a genius invention because they communicate real value in a way that’s not possible with other methods. When your members understand the value behind their points, they look for ways to maximize their point earning.
Check out this example of how customers can earn points for both transactional and behavioral interactions.
#8. Surprise points
It’s really important that clients know what to do to earn points. But it is also cool to surprise and delight them with bonus points they were not expecting. Doing something they like but didn’t expect is a sure way to overdeliver.
Use this tactic in a period of low engagement to keep customers engaged and excited to continue earning points.
#9. Contests
There’s a reason why sweepstakes and lotteries are so popular, and this reason has everything to do with human psychology.
Running a contest inside your loyalty program keeps members excited about the possibility of winning a prize.
#10. Tests
Raising the bar for your loyalty program members means that you care about helping them achieve their goals.
Challenge their growth with pass-fail tests.
Pass/Fail tests add a bit of pressure to your loyalty program members, and serve as a reminder that being only half-committed to their goals isn’t good enough to get results.
Ask your program members true/false questions around a topic central to your brand and score them for their answers. Combine this tactic with offering extra points or upgrading them to the next tier level to further encourage engagement.
#11. Personality quizzes
Personality quizzes can be extremely insightful when they’re built properly, keeping your customers front and center.
While it can take some time and thought to design a valuable personality quiz that is coherent with your brand, you’ll see how it boosts your customer engagement.
#12. Social sharing
Humans are fundamentally social. It’s why most of us tend to enjoy experiences more when we can share them with our friends.
Make your social sharing invitations more bold and more prominent – and even reward members who actively share the news about your brand, loyalty program or offers on social media.
The 3 purposes of applying gamified loyalty
1. Better activation of new members
As a general rule, the more a customer engages in the first period after signing up to your loyalty program, the more committed and loyal he or she will be in the long term.
These initial tactics are meant to visually show your customers what progress they’ve made within your loyalty program.
2. To trigger the competitive nature of human beings
Competition can be VERY motivating.
If program members are lapsing, bring in some extra incentive to get them to keep coming back for their next purchase.
Keep in mind that it doesn’t have to be a high-ticket reward to be effective. Free works wonders.
3. To harness the power of personalization
People want to feel special and to know that they matter.
When you can deliver a more personalized experience to your loyalty program members, they’ll value that you are paying attention to their interests and they’ll engage more frequently.
How to start with gamification
Check your stats and analytics
Before getting into actionable tactics, take a look at your loyalty program statistics.
Are customers not signing up? Not identifying themselves? Accumulating points but not redeeming rewards?
Some things to look out for:
- Customers aren’t aware of your loyalty program
- Customers aren’t interested in joining
- New members are active at the start, but interest fades
- Customers are not reacting to communication
- Rewards are too difficult to attain
- Customers aren’t redeeming their rewards
- Customers are experiencing technical issues
The data will speak for itself.
If you’re not using a customer data platform, get on it. Customer data is key to adjust strategy and marketing spend.
Set goals
Break broad objectives into smaller pieces.
For example:
- Increase identified customers from 25% to 60%
- Increase coupon redemption rates from 8% to 25%
Constant improvement is the name of the game.
Test gamification techniques and see what sticks
The 12 gamification techniques you’ve read about can be integrated with your loyalty program.
Use them to build an effective strategy tailored to your retail business.
Loyalty platforms: technology advice for enterprise retailers
Loyalty platforms: technology advice for enterprise retailers
The best option is to use a retail-specific loyalty automation platform like Loyal Guru, that integrates seamlessly into your current tech stack and makes your loyalty program fly.
If you’re a retailer and you’d like to talk about any of the customer engagement strategies outlined in this article in more detail, then get in touch with our team.