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Contests, badges, and tier levels - companies increasingly use different gamification elements in loyalty programmes to incentivise customers to interact with their brand and motivate them to increase purchases and spending.
It also works both ways! Through entertaining elements and experiences, customers are motivated to achieve specific goals and constantly engage with the brand or company. Customers interact with the brand and the company and thus become more loyal to the brand. So those who offer their customers fun incentives as part of a customer loyalty programme can increase their engagement and, therefore, their loyalty. At the same time, companies benefit from rich data and valuable insights.
At the same time, engagement rates can be increased through the targeted use of gamified elements, as reward-based behaviour encourages customers to invest more time in the brand experience and to constantly monitor and improve their progress, leading to repeat purchases and interactions. The use of gamification in loyalty programmes thus enables customer engagement beyond mere transactions. For example, social media contests can also offer incentives to be active on social networks, create content, interact, or participate in quiz games. In this way, retailers gain better insights into the behaviour of their customers and, at the same time, receive user-generated content.
Millennials and Gen Z, in particular, not only expect tangible rewards but simply enjoy gamification mechanisms: for example, 27% of Millennials surveyed said they were highly willing to stick with a loyalty programme that included competitive games (Colloquoy). Moreover, they are interested in being rewarded for purchases of certain products and services and want a reward structure for brand engagement.
How gamification works
What exactly can gamification look like in the context of loyalty programmes? Various possibilities are available to establish a gamified loyalty programme, such as tier levels, badges, challenges, and competitions. This creates a competitive situation where customers want to generate progress. This can motivate customers to continuously use certain products or services to achieve positive progression and secure specific badges that can be redeemed for attractive benefits and rewards.
Customers can unlock benefits by completing a series of actions or tasks and, upon successful completion, receive a badge that entitles them to a corresponding use. For example, award "Social Media King" badges for sharing posts three times on social media. This way, after repeated interaction on social networks, customers receive a badge they can exchange for a benefit, such as free shipping for six months. Or turn your customers into brand ambassadors and award "Brand Ambassador" badges for referring four friends to your loyalty programme.
The loyalty programme thus sets specific tasks that must be achieved or completed to record progress and thus unlock certain rewards. Benefits include virtual badges, trophies, and physical rewards such as free or reduced products and services, discounts, or other tangible prizes. Virtual rewards also play a significant role psychologically: they give customers a reason to engage and stay attentive.
Challenges
In small challenges and competitions, tasks must be completed quickly to benefit from advantages. After the set time has elapsed, all those who have completed their tasks receive a reward.
KPS Customer Loyalty
Basically, companies should ask themselves what their target group's preferences and needs are and whether they are actively engaging with your brand at all at this point in time. Suppose you want to use gamification as part of your loyalty strategy. In that case, you should first and foremost understand what makes your target group tick to prevent customers from quickly becoming bored and leaving.
The interaction goes beyond mere transactions and creates fun and experiences that promote an emotional bond between the customer and the company and brand. Those who want to integrate gamification into their loyalty strategy have various options: Tier levels, badges, challenges, and competitions are ideal ways to increase customer engagement and incentivise and reward desired behaviour.
Integrating gamification elements into the right loyalty strategy is becoming more accessible with the increasing use of modern and flexible eCommerce architectures. By choosing appropriate modular building blocks in Composable Commerce, companies have more opportunities to optimise the user experience and improve their customer loyalty. The overarching goal remains a personalised and seamless end-to-end user experience and the most excellent possible flexibility to target individual customer needs and foster customer loyalty in various ways.
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