Archives for category: Gamification of Loyalty

Friendefi is excited to host tomorrow evening’s complimentary Ai (Airline Information) networking evening in Toronto. Themed ‘Loyalty & Engagement in the Age of Millennials’, the event aims to provide an enjoyable opportunity for loyalty practitioners to network, learn about “gamifying” loyalty, and to hear from our panel of experts on the subjects of gamification and engagement in the age of millennials.

To view the evening’s agenda and to register, click here.

Plus to boost the fun, Friendefi is offering 1 iPad mini 2 Wi-Fi (16GB) with Retina display to one lucky registered attendee. To increase your chances of winning, take a few minutes to play our gamification trivia challenge!

Friendefi’s Aaron Carr recently spoke to Commerce Lab about using gamification to strengthen the relationship between brands and consumers.

Read the full article here: Friendefi Uses Gamification to Build Alliances Between Brands and Consumers

A first step in gamifying loyalty programs is to create a more interactive experience for the customer.   More specifically, we mean points promotions that allow greater interaction between the program and customers as well as between customers and other customers.  Allow us to explain.

In previous entries, we’ve discussed the motivational effect of feedback on behaviour.  Why, you ask, is feedback in the context of a points promotion so powerful?  For one, people respond to feedback – whether good or bad.  Imagine that you failed to beat your friend’s score on a favourite video game.  You see she’s ahead of you on the leaderboard and has 10,000 more points.  How does this feedback make you feel?  And what do you do in response?  If you’re like most people, you probably feel like playing again to beat your friend and achieve a higher score.  So you play again.

Leaderboard

In this way, feedback is powerful but is so often not harnessed by marketers.  Why not?  Many brands and retailers don’t have the ability to track your purchases or your interactions with their channels.  However, loyalty programs do track your purchases and already let you know how many points you’re earning.

However, most loyalty programs rely on you as the customer to look-up your points balance on their website or, worse, to check your monthly statement when it comes in the mail.  Instead, if programs provided an easy way for you to see how many points you’re accumulating throughout a promotion – on their website, mobile site or application –  the experience would become interactive and you could adapt your purchasing behaviour to maximize your rewards.

Leaderboard 2

And if loyalty programs allowed customers to see how their rewards were stacking-up compared to others during a promotion, it would unleash incredibly powerful social mechanics and take engagement levels that much higher.  Here, we’re refering to social comparison, competition, sharing, and collaboration.

The ability to see how you’re doing compared with others – for example, through face piles, leaderboards, or progress bars  – is powerful.  However at Friendefi, we advocate that social mechanics are only maximized when the other customers you’re comparing yourself to are either people you know (i.e. friends) or peers that you identify with (i.e. other elite status customers, colleagues, members of the same interest groups).  This is when engagement levels have the potential to really take-off as customers not only see their progress in real-time but are also seeing that of others they already compare themselves to.  And even if the promotion isn’t competitive (i.e. has one winner), the addition of social mechanics can still drive greater engagement because your customers are no longer responding to a promotional offer in a ‘silo’.   They’re doing so with other people they know, which increases relevancy and sharing and, well, is just more fun.

Previously, we defined gamification and reviewed examples across a range of sectors – from fitness to scientific research.  Now let’s get to the heart of the matter and talk about potential applications for the loyalty industry.

But first, let’s get a couple of obvious points out of the way.  In evolutionary terms, it could be said that gamification is of the same ‘genus’ as loyalty programs.  They’re distant cousins of one another and when applied to consumer marketing both largely serve to drive brand engagement, repeat purchasing, increased basket-size, and – well – loyalty.  So, it’s no surprise that gamification providers refer to their “behaviour platforms” and loyalty providers claim that their programs “profitability change consumer behaviour”

Image

Okay, with these obvious similarities on the table, let’s look at where gamification parted ways with loyalty programs along the course of their evolution.

Anyone who has ever been a frequent flyer, a frequent hotel guest, or a frequent shopper (at grocery stores, pharmacies, coffee shops, etc.) will know the basic elements of a loyalty program:

  • Program members earn points on their purchases;
  • Points accrued can be redeemed for discounts or other rewards;
  • High-value members can achieve ‘status’ with additional benefits;
  • The program sends offers targeted to members based on their past purchases, demographic characteristics, and behavior within the program.

Image

While we can’t offer objective data, we would estimate that the vast majority of loyalty programs – both big and small – don’t go substantially beyond these dimensions.  The sophistication of their practices is more measured by the strength of their analytics capabilities and their resulting ability to customize the program experience and offers to the individual.  And at Friendefi, we fully subscribe to this practice – offer relevance through targeted marketing is powerful.  But despite this, loyalty promotions all too often lack the full engagement power of well-designed gamified systems.

Why is this?

Well, to start, think back to the various mechanics we’ve reviewed to date: progression loops, feedback, competition, cooperation, comparison, achievement, recognition…to name a few.  This is not to say that these mechanics are wholly absent from loyalty programs.  In fact, many are present to a certain degree.  For example, earning points puts a value on each transaction allowing members to keep ‘score’.  And members can progress to elite tier levels with more exclusive benefits and recognition.  But these elements are not at all optimized within the program to ‘turbo charge’ the consumer experience and to maximize engagement.

Mark Goldstein, the former CEO and founder of Loyalty Lab (now a division of TIBCO Software), recently wrote in his Top 10 Coolest Things Going On In Loyalty that “Game mechanics are today’s rocket fuel of loyalty programs.”  He went on to say that game mechanics have gone beyond strictly social applications and are now being used to increase customer revenue and lifetime value.

Image

So, you may ask: If loyalty programs have many of the essential ingredients of a gamified system and strive to achieve similar, if not the same, consumer engagement objectives, then why haven’t they incorporated game mechanics to produce a new, thoroughly kick-ass marketing model?

About one year ago we asked ourselves the same question.  And roughly 6 months later, Friendefi was born.  We fully believe that the global loyalty industry would benefit from the turbo-charging power of properly deployed gamification.  And, we’ve developed a platform to help programs do just that.

Stay tuned – in our next commentary, we’ll elaborate with descriptive examples.