Brand loyalty is waning in the modern marketplace. Some customers are clamping down on their spending, opting for cheaper products and retailers they deem to be of acceptable quality. Others are growing tired of something they’ve always had, instead opting for change. In the case of the millennial market, they just don’t feel engaged with your brand anymore. But how can such a situation be remedied? Well, gamification could be that golden goose egg your business has been looking for.
I’ve already been over what’s going on with brand loyalty world and why you need to change your loyalty offering (basically, you’re not very engaging). But I didn’t offer up many solutions to how this could be done (sorry about that). The truth is, I was holding out on you. I wanted to make you ruminate. And now I’ve done that, it’s time to talk about gamification and how incredibly useful it is to implement into your brand loyalty system.
The current system of loyalty, and what many also seem to think constitutes as ‘gamifying’ the process, is collecting points from spending money in a store. Look at the Nectar, Tesco Clubcard, and Boots Advantage cards for examples of this system. The only incentive here is about collecting and accumulating points. The reward, your discount on the next purchase you make; or a handful of bigger benefits if you spend stratospheric amounts. On paper, this sounds like an attractive system. It’s well-established and works wonderfully in favour of the retailer. What could possibly go wrong?
Changing customer trends, that’s what.
Now customers are so used to this system they can’t even be bothered to take the effort to sign up. The cost needed to see much benefits from the most popular of schemes is low, and that’s not even mentioning the issues around how paper coupons should be an artefact, not the norm. Employing gamification techniques would drastically reduce this drop in interest and devotion to brands. It needn’t be a scary process either.
“Many see gamification as nothing but games – they switch off the moment they hear it,” said Capgemini web developer and gamification thought leader Andrzej Marczewski. “They think it is all about collecting points and badges for doing what you are told. Most of us consider current loyalty schemes to be examples of thin layer, or low-engagement gamification. Collecting points is fine, creating challenges with tangible and meaningful rewards is harder.”
Leaderboarded CEO Toby Beresford echo’s Marczewski’s thoughts on why current loyalty schemes just aren’t engaging enough, saying: “Marketers assume that customers need a financial incentive to act in the way that they want. Gamifiers look for behaviours that customers already want to do and then try to amplify that behaviour through encouragement and good feedback. Gamification is really not about giving people stuff – it’s about giving good feedback. The best feedback is timely and provides social context, that’s why I really love leaderboards.”[pullquote cite=”Andrzej Marczewski” type=”left”]They think it is all about collecting points and badges for doing what you are told[/pullquote]
That’s all well and good to say, but there is a reason for why gamification is so important to any brand wanting to advance its loyalty scheme. As Marczewski puts it, “anything that can create efficiencies and employee engagement should be considered. [The] same is true of anything that can create better customer engagement.”
Beresford puts it best though, pointing out exactly why this is key to get your brand in front of, and involved with, the incredibly lucrative and fickle market of millennials. “In the millennial generation, those grown up with computer games, digital game mechanics such as levels, points and leaderboards are simply expected. As we grew up our brains have already been rewired.
“Businesses that understand and apply gamification techniques will out-flank their competitors in the race to capture the scarcest commodity of the 21st century – the attention and engagement of staff and customers.”
So how can gamification work with brand loyalty?
There are already a handful of basic examples of gamification out there in the wild. Just take a look at the highly-contexualised GAME reward card, which doles out accolades and collectable badges that can be compared with friends online – this echo’s the PlayStation and Xbox, Trophy and Achievement system. It also dishes out points that translates directly into monetary value, so customers can buy products and save money instantly. GAME is also incredibly liberal with how it dishes out its rewards.
Another example of a loyalty system that is bucking the trend is Waitrose’s My Waitrose card, and Maritz Motivation Solutions brings gamification incentives to the workplace too. David Cameron has stood up for Waitrose’s free coffee scheme, and MD Mark Price view that customers “don’t want a point” shows that sometimes rewards are just better off.
“Customers want to feel recognised and appreciated,” said Marczewski. “Collecting points for shopping is fine, but only if those points go towards something they actually want. Why not let consumers choose what they are saving up for and then set challenges that they can achieve to earn the rewards they really want?”
And that’s a very valid point, why not let customers pick their own rewards, and I suppose that’s the original mentality behind going for a points-based system. But Beresford brings up a different point that also needs to be thought about when it comes to loyalty and points: why not put some meaning behind these actions?[pullquote cite=”Andrzej Marczewski” type=”right”]Why not let consumers choose what they are saving up for and then set challenges that they can achieve to earn the rewards they really want?[/pullquote]
“The problem here is the lack of meaning behind the loyalty scheme not the points system,” said Beresford. “Just being a ‘better Waitrose customer’ is of little value to anyone except Waitrose itself – if instead Waitrose re-positioned their loyalty program as ‘Sustainable Customer’ – then we might all care a little more.
“If my Sustainable Customer score is easily shared with my peers via Facebook, then that is enough to spur me, and hopefully my friends into action. You can see with this technique, rewards are no longer the reason for action. The mechanics might be the same, points for shopping at Waitrose, but the meaning that the points bring is completely different.
“Most loyalty programs today are really just basic reward programs. Consumers are encouraged to act in order to get rewards. The more actions, the more rewards. Consumers are trained to look for rewards in return for action. This has a negative psychological effect, known as ‘over justification’, where eventually the behaviour is not done unless the rewards are provided. For retailers this is a race to the bottom.
“Because of this, gamification techniques such as providing better feedback, signposting clearer paths to mastery, and offering a social context, when applied on top of existing loyalty programs will typically fail to deliver any sustainable benefit and can easily be dismissed by consumers as window dressing.”
But how can loyalty programs actually make use of gamification? Beresford believes that “only loyalty programs built freshly from the bottom up as purely gamified experiences can drive true loyalty and the mega benefits that gamification promises.” Even then, how would you make use of gamification techniques and ideas that wouldn’t be seen as the “window dressing” that other loyalty programs would trot out?
“In these programs consumers are simply provided better feedback on an existing, intrinsically motivated behaviour,” explains Beresford. “As a social media user on social network Path I am given simple feedback on how I am doing (number of moments shared), or on Facebook I can see how many ‘friends’ I have. This simple feedback is gamification – I am given a score on an experience I already want to do – share stories on Path or make friends on Facebook.”
So, for Beresford it’s all about making your loyalty scheme somewhat competitive. Done right, your brand benefits from having a highly-engaged customer group that want to be actively involved. Customers keep using your products or shopping in your store as it helps their score grow and they gain rewards in the process too, it no longer feels fruitless and they can talk about your brand and how engaged they actually are. It’s measurable stuff. And, while competitive, your brand isn’t actively encouraging it, just facilitating it, so those who want to continue on using your brand without feeling the pressure of competition can do so with ease.[pullquote cite=”Toby Beresford” type=”left”]This is a major shift and certainly not one the loyalty industry is ready for.[/pullquote]
“I believe eventually every company will be running some sort of loyalty scheme where each customer has a score,” added Beresford. “The exact nature of these schemes will vary from business to business as each business has a different USP.
“For Waitrose it might be ‘Sustainable Shopper’ while at Wal-Mart it might be ‘Thrifty Shopper’. In both cases the schemes would appeal to individual consumers by providing them direct feedback on their performance against a scale that they actually care about – for Wal-Mart shoppers concerned with not busting the budget it’s clearly a different program from Waitrose shoppers who have less financial constraints.”
Leaderboarded provides a platform for such loyalty incentives, but Beresford sees the future of loyalty gamification being a wholly integrated affair, with choice and consequence. “For brands it means classifying every interaction against the leaderboards that customers actually want to play in. For example, if I am playing in Waitrose’s sustainable shopper leaderboard and playing in Weight Watchers’ leaderboard, then a delicious locally sourced cake might get me positive points on the sustainable shopper leaderboard, but lose me points on the Weight Watchers one.
“That’s fine and a decision I’ll have to live with! It’s all about providing value to the consumer rather than the brand. This is a major shift and certainly not one the loyalty industry is ready for.”
While GAME and Waitrose aren’t examples of pure gamification in loyalty, they’re certainly a sign of businesses that understand that times are changing. Other companies are using data to move customers into the centre of the shopping experience, making them the stars of the show so they want to come back time and time again. But that’s just a band aid on a much deeper problem. After all, you can only stroke someone’s ego so much before they grow tired of being pandered to.