Gamification and Experiential Rewards

Why are we so easily drawn in by points, badges, and leaderboards? What psychological levers can brands ethically pull to foster loyalty through gamification? 

In this article, we’ll examine the psychology behind gamified loyalty programmes and how brands can use game mechanics to motivate desired behaviours in a natural way. 

What is gamification? 

Gamification is by definition the process of adding games or game-like elements to any task to encourage participation. Often used in marketing, it can involve incorporating features like points, badges, and challenges into your activities to keep members engaged and interested.

The goal of gamification is to transform routine activities into interactive, fun and challenging experiences. In a world where we’re constantly making payments and interacting with brands, gamification can bring a sense of newness and excitement.

Gamification leverages the brain's dopamine reward system by providing instant feedback and rewards, such as points or badges, which stimulate the release of dopamine and create feelings of pleasure and satisfaction. (Dopamine is a neurotransmitter that plays a key role in reward, motivation, and pleasure in the brain.) This dopamine release reinforces the behavior, encouraging continued engagement and motivation to achieve more rewards in the game-like system. 

Gamification in loyalty programmes

Gamification is a tried-and-tested method for boosting loyalty and keeping customers not only engaged, but also excited.

Gamification typically involves components like points, badges, leaderboards, challenges, and rewards to create a sense of competition and achievement. These elements tap into the human desire for recognition, accomplishment, and social interaction, driving increased participation.

Customers respond when you transform mundane tasks into more enjoyable and rewarding experiences. 2023 data from Snipp says that brands who gamified their customer engagement tactics saw a 22% increase in brand loyalty. We know that gamification boasts huge growth potential, and there are a few ways in which brands can implement it.

Points  

A system where people can be awarded points within the environment of some sort of game.

For example, the Sainsburys’ Nectar App users are invited to opt into the Swipe to Win game. By swiping the screen upon opening the app, members have the opportunity to win a number of points, which are transferred straight into their Nectar accounts.

Badges  

These act as a visual representation of achievements, showing levels or goals reached within the loyalty programme. They give an indication of performance both to the individual and the brand, and in some cases could be a status symbol.

Restaurant chain Chipotle motivates its customers through badges, to show achievements, which can be used to get rewards like free food. This kind of setup fosters a sense of pride and achievement which can act as a form of motivation for further engagement.

Leaderboards  

Members can compare their performance to that of others, creating a sense of competition which has the potential to lead to further engagement in the hopes of rising up the leaderboard.

Navigation app Waze makes use of leaderboards to rank users based on contributions – reporting hazards, accidents and traffic conditions. This leaderboard enhances user engagement and promotes loyalty. How? Encouraging participation in making navigation better for everyone – plus promoting a sense of belonging among users.  

What’s the point of points?

Loyalty programme engagement is generally linked to the hope of getting some sort of reward. Customers join loyalty programmes for the opportunity, to earn points which will later result in discounts, perks and other kinds of rewards.

By gamifying this process and allowing this journey to feel ‘fun’ brands can create an affinity for their consumers. This in turn can create a sense of emotional loyalty in a few ways.  

1. Growth and achievement: Gamification strategies often involve tracking or achievement systems (like earning badges or leveling up). They tap into our innate human desires for growth and achievement, which can create a sense of accomplishment and satisfaction. When customers feel they are achieving something by interacting with your brand, it fosters a deeper emotional connection and affinity with your brand. 

2. A sense of community: As mentioned, leaderboards can foster a sense of community where your customers get the opportunity to interact with other customers. People are more likely to be loyal to communities they’re part of. This can be a huge benefit for your brand.

3. A personal touch: There’s also the personalisation aspect. Activities such as mini games, quizzes and similar tasks that involve answering questions in some regard, can help you gain insight into your customers. For example, a quiz asking your customers about their holiday preferences – countryside vs city, beach vs pool, cultural tour vs jet skiing etc. – could give you insightful data on their preferences, which then allows you to personalise future experiences and recommendations, and just better understanding your customer base. 

4. Setting your brand apart: Another benefit is the opportunity for diversification. Gamification can help to set your brand apart from competitors. A personal affinity and sense of excitement is hard to replicate in exactly the same way. By creating an enjoyable and tailored experience for your customers through gamification, you can create a powerful USP within your loyalty programme.

It’s all part of creating an engaging experience and creating a deep connection for customers with your brand.  

A practical plan for gamification

If you’re thinking of implementing gamification strategies into your programme you want to think about where to start and how exactly you can use the strategies to get the best possible results.

It’s important to think about your goals: 

• What do you want to achieve and how can you serve your customers through gamified elements? 
• What elements exactly will excite them? 
• How can you measure how much it’s working, collect feedback and edit your implementations accordingly? 

An example of a brand doing this well is the fast food chain KFC. The Rewards Arcade lives within its loyalty programme app. Customers can play a classic arcade game, ‘Hammer Time’, for a chance to win an instant reward such as a free burger, wings or other small bites on their menu. It’s joyful, it’s fun and it’s easy. It’s also exciting and surprising as you don’t know what you’ll win.

The stats also show that it’s working. With a 40% reward redemption rate and 26% increase in the number of weekly active app customers, the brand can safely say that gamification is working in their favour. This is an example of a programme with all the right components for customer engagement in a refreshing and exciting way.

Samsung’s Learn and Earn programme is another great example of a brand using gamification to turn routine company training into thrilling journeys of discovery. The programme incentivizes active participation, Retail Sales People (their staff force) can earn points for confirming attendance at training events via QR codes, and there are also Scratch & Win games sent out post training sessions. Prizes and rewards include vouchers and raffle tickets to add an extra level of excitement. Samsung’s Learn and Earn transforms staff learning through fun and engaging elements. 

Within the first 12 months, the brand also saw great results, with 90% of their nationwide Retail Sales People registered, as well as significant increases in training events participation. 

Is gamification the future? 

In today's rapidly evolving market, where consumers are increasingly mindful of their spending choices, brands must find innovative ways to cultivate customer loyalty. Gamification offers a compelling solution by infusing transactions with elements of fun and challenge while tapping into the intrinsic human drive for achievement and reward. This dynamic approach not only boosts customer retention but also strengthens brand advocacy.

Brands aiming to enhance their loyalty programs and build deeper customer connections should explore the transformative potential of gamification. We believe that as brands strive to maintain customer loyalty in a time when consumers are more and more conscious about where their money goes, we’ll see an increase in these brands incorporating gamification into their strategy. 

Gamification not only introduces an element of fun and challenge to transactions, but also as mentioned taps into the natural human desire for achievement and reward. This is a powerful combination that can significantly enhance customer retention and brand advocacy. 

As we move into an increasingly digital age, the opportunities for creative and immersive gamified experiences are limitless. Therefore, brands looking to elevate their loyalty programs and foster deeper connections with their customers should consider the potential of gamification.

For more information from IAGL on the topic, please don’t hesitate to contact us here.