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Gamification in Loyalty Programs: Why is it Important?

Written by 
Brad Davis
September 25, 2019

Gamification has become an essential component of any loyalty program worth its weight in gold. If you’re looking to create a loyalty program for your business, or spruce up your existing one to do better at enticing customers, gamification is key.

So what is gamification, exactly?

In a nutshell, gamification is the very fine art of taking an ordinary process and applying that “thing” that makes games engaging and fun.It means adding components that motivate specific behaviour through rewards.

Gamification creates urgency through goals or benchmarks, and inspires competition through comparing people’s status within the 'game'.

Driver’s licence centres will often gamify their theory-based computer tests by asking the participant to watch a car drive through an intersection. They then have to hit the spacebar at the optimal time to break, for example.

Many businesses will use gamification strategies as a means for incentivising training. It is an effective way for employees to learn new internal systems and stay up-to-date with the company’s products and services.

And then of course there’s loyalty programs!

How does gamification work in regards to a loyalty program?

The idea behind adding games to loyalty programs is to encourage your customers to participate in exchange for rewards. It's an opportunity to create a great customer experience and strengthen the relationship between brand and customer.

You’ll know when you’ve managed to successfully gamify your loyalty program, because your customer retention rates will immediately spike –especially if millennials make up a portion of your customer base.

A recent COLLOQUY study revealed that 27 percent of millennials remain engaged in a loyalty program purely as a result of gamification in the form of badges, leader boards and other competitive elements. 

It’s also worth noting that nearly 90% of retailers in North America have plans to engage customers through gamification in the next five years, while 70% of the top 2000 companies already are.

So let’s explore a couple of them...

Gamification is a great way to engage your customers

Who’s absolutely nailing their loyalty program gamification already?

Gaming isn’t a new concept to the marketing world; here are some examples of gamification in loyalty programs. Sometimes, businesses pull it off completely by mistake!

Case in point: Extraco Bank

extraco bank case study
Source: Extraco Banks

After creating a sort of 'mini-game' on its website to help explain to customers how they can transition from their free checking accounts to a new 'bonus' banking account, the Texas-based bank immediately noticed a 12% spike in conversion rates.

The gamification aspect of the new bank account pitch worked better than Extraco had imagined. Awesome!

Case in point: Nike

nike case study
Source: Nike

Nike has also done an excellent job of using gamification to increase brand loyalty, particularly through the NikeFuel loyalty program.Registered members can use the app to track and upload their running or swimming times, monitor their own workout progress and fitness regime, and compare progress with others.

It adds a competitive level that encourages users to log onto the app and interact with the brand.

Tailor games to your business

These two examples demonstrate two very different types of gamification; one is quite sophisticated while the other is very straightforward and simple. Both have proven to be highly effective.The way you go about gamifying your brand’s loyalty, and the techniques you adopt, ultimately depends on your business and your customers.

customer rewards app
Customers love earning rewards

Why is gamification in loyalty programs important?

Short answer?

Gamification = Engagement = Loyalty.

Everybody loves a good game. The more effectively a brand can gamify its shopping experience, the better chance it has of enticing its customers and keeping them engaged.

Gamification adds a more personable and 'human' touch that makes engaging with your brand fun. After all, there's an incentive to 'play along' and customers don't have anything to lose (yet you have an emotional connection to gain!).

A recent Forrester study found that emotional connection drives customer loyalty far more than factors like ease or effectiveness.

The Stamp Me digital loyalty card 'Pro' and 'Elite' packages incorporate gamification features as standard.

'Scratch & Win' campaigns are one of the most effective game-style promotions to make a loyalty app more fun, and keeps your discounts and special offers front-of-mind.

Scratch & Win game on the Stamp Me app

So, if you want to add something like this to your loyalty program, read this guide about how to use gamification as a customer retention strategy.

Or feel free to get in touch with our team to speak about how gamification can elevate your digital loyalty program.

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