Loyalty and Gamification: The Secret Sauce of Customer Retention
We'll dive into the parts that make up a simple loyalty program and the benefits to leveling up your program with gamification — and this is not a gameshow.
Loyalty is not a new topic — just about every brand has some sort of loyalty program. They could be basic punch card systems like the old school buy 10 get, one free or it could be a more complex point system that no one understands, but sometimes I get free stuff. I've worked on several brands over the past few years and with or without loyalty, I have found that in general people are creatures of habit. Once someone finds something the like they keep coming back.
This first starts with a good product and great service. If either of those fails, people leave quickly. So my general thought and principle is to reward people with what they want. Do not try to change someone's behavior with something they do not want.
What is gamification?
So if we are going to reward someone with what they want, can we still get them to purchase more? This is where gamification comes in. Let’s look at the definition of gamification.
- the application of typical elements of game playing (e.g. point scoring, competition with others, rules of play) to other areas of activity, typically as an online marketing technique to encourage engagement with a product or service.
First let's level set: gamification in marketing is not always an actual game or sweepstakes. It should be a very well thought out set of actions based on data and reporting that gets a person to purchase more frequently.
Using tools that can identify and target your customers is key. The foundation in gamification should be more frequent purchases. For example, a double points day might be a huge factor in driving in more sales. Personalization can be a key factor in getting a person to order again.
We don’t have to have someone favorite an item to know it's something they really like. If they order the same thing 3+ times, let’s assume they like it. With the right analytics and CRM tools, we can act on this. We are not trying to change behavior but reward the behavior they already do, and this is key. We must master this portion of gamification before we can try to push people to try new things.
Now that we have a handle on getting our loyal customers to order more, how can we get them to try new things? This can be getting them to add an additional item to the cart or order on a different day or daypart. We have to identify the things that are valuable to the business before setting up these strategies.
Let’s look at a Reactivation campaign where we are going to target people who have not ordered in the last six months. We may want to segment them into two groups. With the right tools, you can pull the right levers — some people will fall into a segment where they are incentivized by points and others are driven by $ off.
Hopefully one of the offers will work and we will get customers back in the door and continue to see them come back. Others may only shop when they get offers like this, and you might find that it is not worth trying to bring them back.
At this phase in loyalty gamification, the levers and methods you use will depend heavily on your business. If you have a limited product offering, then there might be fewer things you can do, but if you have a larger product offering or if your products change with the seasons, we can leverage more trial and exploration.
Getting the right set of tools in place is key to a great loyalty program and CRM that can evolve and change with your business and customers. These tools will allow you to understand more about your customers and interact with them on a more personal level.