Gamification in Loyalty Programs

5 Reasons to use Gamification in Loyalty Programs

Gamification is the process of using game elements to achieve various objectives in non-game settings. The concept paved its way into loyalty programs in around 2010s after brands started leveraging game design to engage customers and enhance their loyalty.

Over the years, it gained massive traction and has become a key driver of customer satisfaction and retention. A study conducted by Merkle Loyalty Solutions found that a third of the participants wanted games in loyalty programs. It also revealed that a majority of respondents desired rewards not just for buying from their favorite brand but also for engaging with them. Another study found three out of five customers will buy from a brand if they loved playing the games.

At LoyaltyXpert, we believe gamification can enhance engagement and motivation. Be it channel loyalty programs, influencer loyalty programs, or brand loyalty programs, we are adept at gamifying all types of loyalty programs. In this blog post, we have discussed the benefits of gamification in loyalty programs. Read on to understand why you must gamify your loyalty programs.

1. Increases brand awareness, loyalty, and engagement

In one study conductded by Canadian marketing company Snipp Interactive, brands that incorporate gamification in loyalty programs witnessed a 15 percent increase in brand awareness, a 22 percent increase in brand loyalty, and a 47 percent increase in engagement. 

Gamifying loyalty programs make loyalty programs more engaging and incentivize participation without providing any material reward. If a loyalty program is gamified properly, it can enhance revenue and sustain on its own without costing the company an additional cent.

2. Makes your loyalty programs appealing and addictive

As per Taiwanese-American author Yu-Kai Chou, gamification puts the greatest emphasis on human motivation in the process. The biggest benefit of gamification is it makes your loyalty programs appealing and gives you a massive advantage over your competitors. 

When customers make a purchase, engage with your brand, or perform any desired action, the gamified loyalty programs will reward them with a sense of achievement. That in turn will reinforce their behaviors and make them engage with the brand more and more.

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3. Enhances social sharing

A recent study found that gamifying loyalty programs enhance social sharing by almost 25 percent and comments by 13 percent.

Various surveys have found that customers who like to engage with gamified loyalty programs are more active on social media.That’s the reason noted investor and venture capitalist Bing Gordon had asserted that gamification is as important as social media and mobile.

When customers get additional points and rewards for playing trivia games, they are more likely to share the results on social media as well as recommend their friends and connections to take part in the games.

4. Understand customer preferences

Gamification of loyalty programs enhances customer participation and facilitates greater customization. Games such as quizzes and surveys enable a brand to understand its customers better and help them personalize its offerings and services.

When customers participate in gamified quizzes and surveys and receive attractive rewards and loyalty points, they give valuable insights into their likes and dislikes by providing their input. Their responses serve as gold dust for companies that look to understand their existing customers better and tailor their offerings. As Canadian-American author businessman Gabe Zichermann said gamification is one-quarter technology and three-quarters psychology.

5. Enhanced ROI on loyalty programs

Many businesses have realized a high return on their investment after gamifying their loyalty programs. Here are some examples to drive home the point.

Apparel major Moosejaw adopted a gamified loyalty program that enhanced its sales by 76 percent and generated a return on investment of 560 percent. After launching the Starbucks Rewards app, the renowned coffee chain reported a revenue gain of US$2.65 billion and an increase of 25 percent more loyal customers. Tennessee-based logistics company Kenco reported a 45 percent increase in its sales post-gamification.

Taking everything into consideration

Famous author and educator Karl Kapp said gamification should be a tool in a larger toolbox. In the digital age, the gamification of loyalty programs is essential to attract new prospects and retain existing customers. At LoyaltyXpert, we have the expertise and experience in gamifying all types of loyalty programs, including brand loyalty programs, channel loyalty programs, and influencer loyalty programs. If you are considering gamifying your loyalty programs, Get a Free Demo today.