According to a 2016 report, 100% of consumers cheat on their favorite retailers.
This means if you’re still clinging to traditional loyalty programs, now is the time to discard them and find new ways to personalize your customers’ experiences. Because 66% of consumers say they will switch brands if you treat them like a number.
Despite the statistics, one way to build customer loyalty and improve engagement is through gamification.
Gamification is the process of using game mechanics and thought processes to drive engagement and action by rewarding users with points, badges and more in return for frequent visits, reviews and purchases.
Gamification is gaining traction in retail because of its ability to present retailers with the opportunity to boost customer loyalty, collect valuable customer data, and increase conversion rates.
Let’s take a look at the numbers.
Statistics from Gallup states that brands that successfully engage customers through gamification see 63% lower customer attrition and 55% higher share of wallet.
Also, Giga Information reports that gamification grows online customer activity by an average of 68%, and social sharing by 22%.
Based on the above, 87% of retailers plan to use gamification methods in the next five years and 46% of those retailers identified that a loyalty program incorporating gamification is one of their top priorities.
While gamification can help increase customer engagement, many retail businesses frustrate customers with poor design and implementation. To use gamification to successfully boost customer engagement, here are a few tips to consider when designing your strategy:
#1 Know Your Audience
Understanding your target audience is critical to gamification success. You need to know what motivates customers to engage with your business, what their expectations are, and more importantly, what player type your customers fall under.
According to Richard Bartle, (one of the most referenced authors on gamer psychology), there are four main player types: achievers, explorers, socializers and killers.
Achievers want to accumulate points and achieve game-related goals. They need an audience to appreciate their achievements.
Explorers focus on discovering new things. An explorer is more apt to prize random puzzles, side stories and the environment of the game above winning points or badges.
Socializers use games to connect with other players. They are less competitive and more cooperative.
Killers prefer a social game environment and like to win.
Lingerie retailer Victoria’s Secret proved they know their audience when they created the PINK Nation app for its college-age consumers. The app allows members to access filters and stickers to “pink” their favorite pictures and get sneak previews. The brand reported that it was one of the main contributors to its 2% growth in sales in May 2014.
It pays to know your audience’s player type. Know your customers, and you can better determine the perfect gamification marketing strategies, and which rewards/incentives will be effective in driving action and brand allegiance.
Research can help you avoid gamification blunders and provide you with valuable information about current game development trends in your industry.
While a lot of companies have successfully included the tactic in their marketing strategy, very few admit whether it contributed to their success. So, word to the wise; study businesses that have successfully used gamification to achieve their business objectives.
Analyze competitor apps that continuously acquire loyal users. You can determine how effective an app is from the number of downloads and reviews it has. Note social sharing functions, player tutorials, game maps, action and movement during gameplay and prizes.
You can also understand customer behavior and find out what kind of gamification activities your customers will respond to by parsing through your website analytics, inventory history, sales etc.
#3 Identify Goals and Quantify Outcomes
Are your goals to increase sales? Boost traffic? How will you know when you reach them?
To answer these questions, you must set well defined, measurable goals, outlining what you want to gain and how you plan to achieve them.
While goal setting is important, many gamification efforts fail because they aren’t customer centric.
For a gamification ‘win’ on your end, you must motivate players to achieve their goals – and those goals should overlap with your business targets. Through this strategy, Nike became a gamification leader.
In 2011, Nike created an online game that enabled players had to help athletes stay warm while they trained outside in the winter cold. It was part of an interactive campaign to promote its winter sportswear. The highest scores achieved between Dec. 9-15th were then eligible for a trip for two to meet one of the Nike athletes.
Nike’s gamification triumph doesn’t need to end with them. Applications like Gigya can help you gain insights into key metrics like top users, daily activities, and rank users by social loyalty and customer engagement. If your statistics aren’t positive, get feedback from your users about how they feel about your game, what’s working and what’s not, and work towards improvement.
Your gamification goals should be directed towards rewarding customers for positive behaviors. This will help you engage your customers on a deeper level and understand them better.
#4 Don’t Complicate Things
Complexity is not an ally in gamification.
In a world of eight second attention spans and numerous distractions, it’s important to make your games easy to understand, but challenging enough to keep customers coming back. To engage your audience, make scoring and winning transparent. It’s important customers know what actions and activities to take in order to win.
Ensure your audience keeps working towards completing a task by including progression bars in your games. This will give them a clear picture of beginning, end and middle stages.
Make your rules and tutorials simple and easy to understand. Your customers want to have fun, so give them a good time!
Domino’s Pizza gaming app Pizza Hero increased sales revenue to 30% by letting customers create their own pizza. You want customers to enjoy themselves. Just don’t forget about your overall goals, Always connect your gamification process to tangible business outcomes.
#5 Incorporate Leaderboards
First used in 1978, leaderboards remain an important social feature.
Basically, leaderboards provide players with the opportunity to track their performance alongside others. Of course, the desire to appear on leaderboards drives players to earn more achievements, and this is effective in driving retention and engagement.
While humans are competitive by nature, few people want to compete with the world. Here are some points to keep in mind when designing your leaderboard.
To drive player acquisition and retention:
- Include friend leaderboards used in conjunction with popular social networks
- Give players titles or badges to rank their achievements
- Consider having a leaderboard that ranks players within a certain geographic location
- Include notifications to inform players when they have been outranked. This will get them back into the game to try and reclaim their lost ranking or position.
Nike’s successful app, Nike+ keeps users engaged through leaderboards so they can see who is pulling ahead.
Leaderboards help motivate customers to compete against a high score, or battle their friends, creating a channel for them to connect with your brand in a fun and memorable way.
#6 Establish Rewards
Rewards can make or break your gamification strategy. According to research conducted by Colloquy, 75% of customers want to participate in loyalty programs that offer relevant rewards.
The following gamification techniques can help you figure out just how to reward your customers:
Status describes a clearly visible ranking that indicates the connection between customers and your brand. For instance, Starbucks Gold Card is a physical representation of status available to only elite Starbucks drinkers.
Access provides customers with unique opportunities to interact in a special way with your business, through sneak peaks, tickets to events, group purchases etc. Nordstrom offers level four loyalty cardholders exclusive access to its products and sales.
Power allows players to be in positions of superiority over other players. This might be in the form of coaching new customers, moderating forums or giving them a voice in developing products messaging or events.
Prizes for completing quests or challenges can be all the incentive you need to keep the number of active users high. If you’re considering this option, weigh the cost of acquiring, managing and delivering prizes.
Additionally, a very effective gamification technique is giving a random reward or freebie to members at unexpected times. A thoughtful surprise can go a long way…as long as it’s thoughtful to both sides.
Undoubtedly, personalized, engaging and rewarding loyalty programs are key to customer retention and engagement. By including gamification in your marketing strategy, you can create fun experiences for your customers and increase your engagement, all while reaching your business goals. Game on!