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In a hyper-competitive world, brands and businesses always look for avenues to retain existing customers and acquire newer ones. However, keeping a customer is 5x less costly than acquiring new ones. Therefore, businesses concentrate on designing strategies to keep the existing ones. Traditional techniques that are transactional, such as coupons and generic discounts, have been proven to be less effective in driving customer engagement. Therefore, now, businesses are leveraging gamification in their loyalty programs as a key differentiator in the personalized customer loyalty loop. This enables businesses to increase customer engagement, improve sales, and strengthen brand loyalty. Engagement of the customers in a modern way through an appropriate gamified loyalty program goes a long way in providing customers with personalization, relevance, and an emotional connection.
The major issue faced by most organizations is that brands can acquire customers easily; however, retaining them has been difficult for them. So here comes the role of new innovative techniques brands can employ to get an edge against their competitors in the market. Therefore, gamified loyalty programs are gaining popularity amongst several brands to gain market share.
Initially, brands were integrating simple game mechanics, such as badges or cartoonish elements, to provide the feel of video games. However, those badges didn't convey any status or provide any meaningful value, and thus, they didn't build a relationship with customers. While, modern gamification techniques leverage customer data insights, elevating the customer experience and driving value for both the customer and the brand.
There are several reasons why brands and organizations have adopted gamification to drive engagement with loyal customers.
Gamification increases digital engagement and social sharing
With the shift in the preference pattern of the customers, businesses have also evolved their processes partly or fully into the digital realm. Gamification is one of the processes that help businesses to rejuvenate their loyalty programs, giving a fully digital experience.
Notably, digitalizing is a common architecture that uses a gamified approach to optimize participation and, therefore, helps in facilitating real-time customer insights and personalization, driving customer loyalty. Moreover, there always lies a high probability that customers who like gaming and engage with gamification are more active on social media. Therefore, gamified techniques bolster the chances of customers to share their experience of the loyalty program more widely, encouraging others and driving the growth of the business.
Gamification helps businesses to incentivize participation without offering a tangible reward
Brands and businesses leverage gamified loyalty programs to make the customers feel rewarded without incurring any cost. Therefore, more brands are integrating good practices to supplement these virtual rewards with real rewards. This helps to incentivize the customers so that the overall package delivers more value to loyal customers.
Gamification attracts customers to invest more time in engaging with the brand experience
Since designing gamified loyalty programs encourages the reward-seeking behavior of the customers, this also elevates the desire to continually ‘check in’ to see progress and aim for the next achievement in these programs. Therefore, this repeated engagement with the loyalty program naturally establishes a stronger context for making repeat purchases, deepening the overall brand experience.
Therefore, most brands and businesses are leveraging gamification to make loyalty programs more effective, encouraging customers to repeatedly choose that company and its products over its competitors.
Gamified strategies that brands are adopting in loyalty programs
There are several gamified techniques that brands are injecting into their loyalty programs. Firstly, brands may design loyalty programs including tasks, challenges and obstacles. Secondly, businesses are also adopting streaks and milestones that are slightly different from tasks because they hold the customer for a longer period, recording the commitment made by the customer. Thirdly, ranks and level-based loyalty programs; fourthly, badges and other virtual rewards are simply manifestations of progress in terms of trophies, virtual badges and other rewards. Lastly, teams and leader boards are adding dynamics to the loyalty programs as the user can see other members of the loyalty program, increasing competition amongst the members.
Restaurant businesses are witnessing growth in their businesses using gamified loyalty programs
Restaurants are leveraging gamified techniques to gauge consumer response through mobile channels that help directly create a connection with high-value customers. Starting from choosing one own reward to introducing new member challenges helps to identify and strategize accordingly with optimizations of digital and rewards programs. For instance,
Since these gamified features are helping the restaurant to know their loyal customers, thus getting a better understanding of individualized preferences and PayNXT360 anticipates the restaurant will be able to design more appropriate gamified features in their program in the next quarters, driving customer loyalty in the business.
Since gamification elements aim to influence customers using innate human motivators such as competitiveness, reward-seeking behavior and the fear of missing out, gamified loyalty programs are becoming increasingly popular among marketers. These traits of the loyalty program are mostly attracting customers, mainly the millennial population; therefore, companies are using gamification marketing to drive engagement, which is a key to loyalty.
To know more and gain a deeper understanding of the loyalty programs market in the United States, click here.
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