3 Tips to Gamify Your Customer Loyalty Program

3 Tips to Gamify Your Customer Loyalty Program

Loyalty is the name of the game for marketers today, since keeping a customer is 5x less costly than acquiring new ones and nearly half of a store's revenue is created by only about 8% of their most loyal customers.

As transactional deals - like coupons and percent-off discounts - have proven less and less effective, brands are beefing up their customer loyalty programs to set themselves apart and drive greater engagement. This is critical, considering that 58% of consumers said they’re more loyal to brands than they were five years ago, but the majority of our Brand Loyalty 2020 report respondents (63%) only belonged to between one and three loyalty programs, meaning a program must deliver exceptional experiences to make the cut. Also, 77% of consumers feel brands could be doing more to earn their loyalty.

Increasingly, brands are leveraging gamification or behavioral economics in these programs as a differentiator and a key component in the personalized, customer loyalty loop. Gamification requires using game elements or design techniques as part of your marketing strategy to influence customer behavior and engagement.

If you're interested in employing gamification in your customer loyalty programs, here are some tips to keep in mind:

  • Consider the motivational outcome you desire - Different game design elements can trigger different outcomes. If you're interested in keeping customers coming back to your store, develop games that allow them to collect points to redeem for rewards. If you want to appeal to your customers' competitive nature, use badges and leaderboards for them to boast their accomplishments. And if your customers are interested in achieving goals, performance graphs and progress tracking tools could be the way to go.

  • Encourage digital adoption - You need to go beyond asking a customer to download a mobile app or scan loyalty card with every purchase. Using gamification to pair digital actions with making a purchase enables you to incentivize digital adoption and greater engagement with your loyalty program, while also helping them have a seamless experience inside a store and while online shopping.

  • Design with revenue in mind - Just a 5% increase in loyalty can boost the average profit per customer by 25% to 100%. The combination of gamification and personalization can have a significant positive impact on net incremental revenue (NIR), which is the revenue earned after a promotional campaign, minus costs associated with the offer. NIR is the yardstick that helps tie marketing to the larger organizational goals and objectives. And it's an important performance indicator that provides a clear picture to show the C-Suite the ROI on promotional programs and marketing activities.

As brands look for ways to increase customer loyalty and reap the rewards, they need to consider new ways to engage with customers. Gamification in marketing is an effective tool that not only strengthens bonds between brands and consumers, it can help drive NIR to understand the effectiveness of marketing efforts and grow sales and revenue dramatically.

Interested in learning more? Download the new white paper, "Beyond the Fun, Gamification Adds Science to Your Customer Loyalty."

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