About the Author: Yu-kai Chou is a Partner at the Enterprise Gamification Consultancy(EGC) and a gamification pioneer who has been working in gamification since 2003. Yu-kai is the original creator of the Gamification Framework Octalysis, and is a regular speaker/lecturer at organizations like Stanford University and Google Inc.

The Importance of Rewards in Gamification

One of the key values that good gamification design can deliver on is improving engagement with the company’s targeted audience, whether it be users, customers, employees and/or other stakeholders. To be effective for any given application, a significant amount of thought must be put into understanding what is necessary to engage and motivate individuals at a deep level.

Incentives and Rewards are a crucial piece in the engagement puzzle. With proper and thoughtful design, incentive and reward programs can be very effective in providing optimal motivations for driving engagement. That is, with the right selection and mix of rewards, and an effective system for delivering these rewards, participants not only become engaged, but are also retained and become valuable evangelists for the company.

Two Parts of Rewards Planning

There are two elements of a reward that need careful planning: WHEN a reward is given out, and WHAT the reward is. So, just as the timing of the reward is important, the nature of the reward is important. Ultimately, the goal of the reward is to maximize motivation prior to receiving the reward, as well as happiness after receiving the reward.

To determine what the reward itself is, a good option is to utilize Gabe Zicherrman’s SAPS model: Status, Access, Power, Stuff.

But in terms of the structure of the reward, we can look at six types of rewards that can be implemented into a design as well as their key features.

1) Fixed Action Rewards (Earned Lunch)

In Fixed Action Rewards, users complete a certain task, and get the exact reward that they want or expect when they complete it. Similar to fixed ratio schedules, these programs reward the user after they successfully perform an action a fixed number of times. This is appealing because users know exactly what they are getting and will work towards that goal.

One common example of these programs are sandwich store punch cards, where you buy ten sandwiches and get the next one free. This encourages the customer to eat at the sandwich shop more often.

Another example is the frequent-flyer programs offered by several airlines, where customers who are enrolled in the program can earn “frequent-flyer miles” which are accumulated by distanced flown on that airline (or their partner services). These “miles” can then be redeemed for free flights, class upgrades, or other goods and services. Oftentimes the miles can be transferred to other participants in exchange or as gifts.

2) Sudden Rewards (Easter Egg)

Sudden Rewards are surprises that are unexpectedly given out. This is appealing because users were not expecting anything and suddenly get rewarded. The surprise element would give them an extra shot of happiness, making them think about whether they would obtain another Easter Egg in the future.

A good example of a sudden reward system is the “Chase Picks up the Tab” program. Once enrolled in the program, Chase cardholders have a very small chance of getting a text that tells them that Chase picked up the tab, and will credit the $5 purchase back into the accounts. Though the reward dollar amount is not great, it compels consumers to regularly swipe with their Chase cards instead of other cards because they want to see if they “won” again this time. Oftentimes, users will tell their friends about their winnings too, attracting other consumers to sign-up to this “game.” This is a great example of utilizing Unpredictability & Curiosity from the 8 Core Drives of Octalysis.

3) Random Rewards (Drops)

This type of reward may be anything and it will only be revealed once the required action is completed. This is appealing because the user continues to anticipate and guess what the reward might be, creating a feeling of suspense that engages them.

One example of random rewards are those associated with the White Elephant Gift Exchange game that often occurs at holiday parties around Christmas time. Also known as the “Gift Swap”, among other names, this “game” provides a mechanism for distributing inexpensive or undesired gifts (often from previous holiday seasons) among the participants.

The Exchange starts with each participant providing a wrapped gift for the gift pool, and then a determination is made for the order with which each participant will select a gift. The first participant selects and opens a gift from the pool. The next participant can then either select from the pool of unopened gifts or “steal” the opened gift from the first participant, who then selects from the pool.

The next player has the option to select from the pool or “steal” either gift from the previous players. This goes on until the last player selects the last gift or steals from one of the others, in which case, that individual opens the last gift. Again, in this case, everyone knows that once completion of the task, a reward will be earned, but what the reward is can only be known at the end.

A second example of Random Rewards is the Mystery Box Shop. Customers join the service via subscription and pay a monthly fee. On the first of each month a package containing 5 to 10 “fabulous curiosities,” is shipped out to the customer.

The contents of each package follows the theme for that month. Recent themes include “Never Grow Up,” “Hallowawsome,” “Another World,” and “Old School.”

Promising to be cool, curious, odd, or even bizarre, each Mystery Box provides an element of intrigue, which strikes the customers curiosity. Consisting of a mixture of clothing, toys, gadgets, snacks, electronics, and who knows what, each delivery is like opening your presents on Christmas morning. It will keep them coming back for more.

4) Rolling Rewards (Lottery)

Rolling rewards go from one person to another – someone has to win. Typically this form of reward determines a winner solely on chance, while creating growing levels of anticipation. This is appealing because everyone has a good (though small) chance, but people believe they will win with enough persistence.

Examples of rolling rewards include lotteries and sweepstakes. Traditional lotteries have large numbers of participants who make modest commitments in order to have a chance of winning substantial, often huge rewards. Any individual can improve their chances by purchasing additional tickets, though this strategy increases the mathematical odds only modestly. Lotteries often create heightened levels of excitement, and can become somewhat addictive; a situation that sometimes cause criticism for the organizers.

Lottery and sweepstakes winners are often promoted and featured in the media, providing further incentive for current and future players. This encourages all participants to stay involved. In the case of the Speed Camera Lottery, the community also benefits from the safer driving habits that the system helps to establish and reinforce.

The activity “Musical Chairs” illustrates a game situation where someone has to lose on each turn. This is the reverse of a Rolling Reward (Rolling Penalty), and equally engages everyone as they continue to play through much optimism and engagement.

5) Social Treasure (Gifting)

Social Treasures are rewards that can only be earned when “given” by another user. This is powerful because the user must get others to participate, increasing the virality (growth) of the service. In a sense it helps to promote involvement from others, and further encourages them to stay engaged.

Referral fees are one example of this type of reward. A restaurant, club, or other organization might provide special incentives – “Your friends come in at 20%!” “Bring a fourth and get an entree for free!”

Other examples are voting competitions where people must obtain the most votes or “likes” in order to win a prize. I’m sure you’ve all had the experience of some friend or family sending you an email asking you to “like” for their image or entries on Facebook, so they could win the grand prize from their favorite company.

The Social Treasure here is not the ultimate prize from that company (that would be considered a Fixed-Action Reward), but the votes and likes that can only be given out by someone else other than the user him/herself.

Some view the Academy Awards as an annual game where each studio dedicates substantial marketing resources to sway academy members into voting for their candidates and features. Because so many members want the highly coveted Oscar (read: status), they go out of their way to obtain the “social treasures” from others who generally give them a vote, benefiting the program organizers.

6) Reward Pacing (Collection Set)

These are rewards that are given out a piece at a time instead of altogether. This is effective because once a user has a few pieces, s/he will work hard to complete the collection. It is also more cost effective because the company does not need to give out tangible rewards to everyone.

A good example of reward pacing is the McDonald’s Monopoly Game. A cooperative effort between McDonald’s and Hasbro, this game uses the original Monopoly theme to promote a sweepstakes type of awards system. Customers would receive game tokens with each purchase of certain menu items.

Since the tokens were matched with the different board properties, customers could redeem complete token-property sets for cash rewards, with the most valuable property sets yielding awards in excess of $1 million.

If a user had 80% of the set, they obviously will become a lot more engaged and trying to finish the set as soon as they can (but for some reason the last 2 pieces are always impossible to get eh?) But do be careful, consumers will only try until they feel like they are not making any progress for a long time and will give up after that.

Another example can be seen from some friends I have at Zapt: the meta-game on top of Twitter. Zapt gives real rewards and prizes, but only after a user completes the entire collection set of 20 “medals,” each requiring specific challenges and tasks. The amazing thing here is that active users who are engaged will tweet 3 times as much as the average Twitter user to try to obtain parts of the final prize. They will even pay real money to help unlock – not the real prize – but the virtual medals, so they can advance toward the completion of their collection set.

Conclusion

Gamification and Engagement is all about good design, and it’s never a cookie-cutter solution. Many solutions out there use a clever combination of the above reward types – think about slot machines in casinos.

This is why utilizing great service providers like BigDoor can significantly help your company design the best services and engagement programs to maximize your user motivation and engagement with each reward – instead of just giving away free stuff without any returns on your investment.

Posted in: Blog, Gamification, Gamification Tips

Last week, the BigDoor team closed out our April conference schedule by attending iStrategy Miami. The conference brought together online marketers to strategize and discuss the future of customer engagement. In addition to enjoying a bit of sun and Florida weather, the BigDoor team had a great time discussing how the BigDoor loyalty solution can solve common marketing problems including; user acquisition, directing user engagement and customer retention.

BigDoor also also competed in and won the iPitch competition. Our CEO Keith Smith gave a 6 minute demo of the BigDoor product to attendees, followed by a Q & A session from panelists: Ben Parr, Jonah Goodhart and Eric Litman. Attendees then voted on the technology they thought was the most relevant to solving their marketing problems. We wanted to share Keith’s winning slide deck, for anyone who wasn’t in attendance or who wanted a chance to look over it again. Feel free to shoot us questions in the comments.

Posted in: Blog, Conferences, Gamification, Loyalty, Testimonials, User engagement

Last week the gamification industry gathered in San Francisco for the 2013 Gamification Summit. The conference highlights the truly broad application of gamification across industries around the world. Every year we are impressed with how much the industry has grown and changed. As long running sponsors of the event, we were very excited to have 5 team members staffing the BigDoor booth, speaking at the event and interacting with the gamification community in person.

GSummit offers up speakers from all aspects of the industry: education, enterprise, social good and consumer facing applications. This year, we were very pleased to have another one of our customers talking about their success using BigDoor’s platform.  Jeff Hawley, Director of Customer Experience with Yamaha Corporation of America spoke about his experience implementing a customer loyalty program, in conjunction with Yamaha’s 125^th Year anniversary that engaged and rewarded the diverse set of customers that visit Yamaha’s website.  The ongoing program’s success is unquestionable,  but they continue to expand the program in new directions. Be sure to check out their website and see the implementation live as well as check back for the video of his talk when it becomes available.

In past years, BigDoor CEO Keith Smith has spoken to the GSummit audience about various topics surrounding gamification, but we decided to mix things up and have our VP of Sales, Gavin Hewitt, discuss BigDoor’s philosophy on the importance of rewards in customer loyalty programs. In his talk: Rewards Matter: How big brands are unlocking the secret to customer loyalty Gavin highlighted the importance of offering customer focused rewards as key in increasing customer engagement and long-term loyalty.

Our booth last year was quite a hit (remember the marshmallow guns?) but we think we did even better this year. Some people might recognize this setup as a bit reminiscent of their college days, minus the beer. Depending on their skills, players could earn a number of rewards, from custom ping pong paddles to water bottles and T-shirts. Our grand prize winner, John Leech, walked away from GSummit with an Xbox 360.

Thank you again to the Gamification.co team, who put in a ton of work to make this event happen, as well as to the attendees and speakers who help continue to grow the gamification industry in interesting and innovative ways.

Posted in: Blog, Conferences, Game Mechanics, Gamification, Loyalty

When people talk about loyalty programs, one of the first examples used is airline mileage programs. Not only have these mileage loyalty programs been around for ages, but customers often feel as though these programs come closest to hitting the mark on providing authentic and desirable rewards. While travel loyalty programs, including hotel chains and rental cars are often held up as a shining example of loyalty, rising costs of travel are beginning to make these transaction based loyalty programs more and more expensive for brands, while providing less value for consumers. Brands who have long had programs rewarding frequent travelers are forced to raise the cost of free flights, hotels or car rentals, or limit the quantity of qualifying free experiences. These changes, often feel like slights against valuable program members, who resent the devaluation of their miles, points or memberships.

While many travel brands are experiencing the weight of increasing costs to run a successful loyalty program, few of them have expanded the options for their programs and sought models that exist outside the traditional (and outdated) transaction based model.  By expanding these programs online, beyond the customer transaction, brands open up numerous doors to engage their most loyal members, and reward members with perks far beyond what traditional programs have imagined. Better yet, platform’s like BigDoor’s gamification and loyalty platform, seamlessly tie into social media another important channel for travel brands to monitor and build.

They haven’t moved towards these innovative programs yet, but it sounds like they know the change is imminent. In a recent article in USA Today, delving into the second annual hotel CEO roundtable, CEO’s from companies like Wyndham Hotels, Carlson Hotels and Kimpton mentioned the need for traditional loyalty programs to evolve towards better engagement, innovative rewards and features for customers that expand beyond transaction based models. Brands are increasingly looking towards social media integration, hoping to see more customers reaching out to them through various social channels as well as promoting brands to their own social graphs.

The CEOs participating discussed what they see as important changes in the hotel loyalty space, pointing out that social media, customizable rewards and keeping up with customer expectations are their biggest challenges moving forward. It’s definitely an interesting read, and worth looking through whether you are a brand facing the same challenges, or a customer who travels frequently.

For those travel brands facing the challenges highlighted, gamified loyalty programs seem like an easy solution to a wide range of problems presented.

Posted in: Blog, Gamification, Loyalty, Social Media

There is nothing more satisfying than seeing successful BigDoor implementations. We set out to find a better way for brands to engage with their customers and seeing our platform in action, delivering results never gets old.  It’s even better when those brands are out talking about gamification and their gamified loyalty solutions.

BigDoor client Yamaha is featured in the February issue of MMR Magazine talking about their gamification/loyalty program. Launched last October, in conjunction with Yamaha’s 125^th anniversary the “My Rewards” program focuses on thanking and rewarding Yamaha customers for their loyalty over the years. The program also encourages new visitors to learn about Yamaha products and offerings, as well as guide Yamaha fans to new sources of content and information about the brand.

Kevin M. Mitchell of MMR interviewed Jeff Hawley, director of Yamaha’s consumer experience group to talk about how the program came about as well as challenges and benefits of using gamification in the brands marketing strategy. The full article is available on MMR Magazine’s website, but we thought we would share some of our favorite quotes here.

On the difficulties of talking about “gamification”:

[Jeff Hawley] admits that the first challenge was internal: getting past the perception of – and frankly, the word, itself: “game”. He heard back from the higher ups that Yamaha customers ‘don’t want to play games’.

On what gamification really is at its core:

“It’s frequent flyer miles’ for the Social Web 2.0 generation, and just ties it into a neater package then sending a rebate card or waiting for something in the mail. In a nutshell, it’s a loyalty program”

On concerns that gamification can be used negatively to glean personal information about customers:

“For folks on the bleeding edge of this type of marketing, that’s the big question,” How many details are too many details, and how far can a company go without being “creepy?”

On why Yamaha ultimately decided to pursue a gamified loyalty solution:

“Hawley emphasizes again that the reason they took up the gamification mantle in the first place is to thank consumers for their support”.

Be sure to check out the entire article, on MMRMagazine.com.

Posted in: Blog, Gamification, Loyalty, Partners, Testimonials

With the first month of 2013 nearly over, it’s time to set our sights on accomplishing all the goals we set for the BigDoor platform and the gamification industry in 2013. The industry has changed drastically from when I first became aware of it; in the early days, everyone was talking about games. At the root of the ugly, often disliked word “gamification” was the idea that platforms like BigDoor could draw inspiration from game designers, successful games and game mechanics to create something that engaged internet users, employees and people around the world. While that is still true, we do still talk about game mechanics (perhaps incorrectly according to Andrzej Marczewski) I think the gamification industry does itself a disservice by misusing terms and classifying “gamification” examples to include things that really just belong in the “games” bin.

I’m guilty of it too. I’m sure if someone dug through my posts about gamification long enough they could find plenty of times I have praised a well-designed mini-game and tagged it with gamification. This doesn’t help our industry. Gamification has picked up steam in everything from consumer facing gamified loyalty programs, to gamified training, and employee motivation. It is less and less about creating a game and more and more about using what we understand about psychology (often from game designers) to motivate people in various tasks, goals and directions. Gamification has plenty of great examples to demonstrate its powerful abilities, but conflating games and gamification negatively impacts the industry as a whole.

That isn’t to say that lines between gamification and games are black and white. They clearly aren’t and many examples will engage in the grey area between the two. But recently I have seen quite a few gamification industry professionals complimenting or discussing mobile games, mini games and other blatant “game” examples, as representative of the industry. This confuses people who don’t fully understand gamification and detracts from successful gamification examples that are a much better representation of the industry and the direction that it is heading.

When the NRA released “NRA: Practice Range” the #gamification stream on Twitter saw tweets flying by about what a poor example of gamification the game was and gamification industry experts were writing about the release. Undoubtedly, this game is a horrible example of gamification, but not because of its political or controversial implications, it’s a horrible example, because it isn’t gamification. It’s a game. Sure, it has some facts about gun safety tossed in, but it is a mistake to classify every game that has any educational value as “gamification”.

As an emerging industry still defining itself we are bound to make some missteps. Games with clear social purposes sometimes seem to fall somewhere in-between. But gamification industry professionals, experts and fans, let’s make an effort in 2013 to try to separate games, games with social purposes and gamification into separate categories to make things a bit easier.

Posted in: Blog, Game Mechanics, Gamification, Gaming

Keith Smith - CEO/Co-Founder of BigDoor

With 2012 behind us, my team and I at BigDoor have been reflecting on the state of the much hyped and oft derided gamification movement.  Game mechanics are now being deployed in a number of employee facing solutions, but the most exciting and impactful uses of gamification continue to be in consumer-facing experiences.   2012 saw new gamification efforts from a number of big brands; NFL, MLB, Yamaha, Adobe, Universal Music, Starbucks and Random House – just to name a few.  Now that many of the most powerful consumer brands in the world are embracing gamification as a way to increase loyalty and engagement, it is worthwhile to take some time to understand why and what’s coming next.

So as 2013 gets underway, I wanted to lay out my predictions for where I see gamification heading in the coming year:

 1. Gamification will define next generation loyalty programs. There is an ever growing trend that traditional loyalty programs are not delivering the results that marketers want.  A recent Forrester Research, Inc. report noted that, “compared to 2008, 40% more consumers feel that loyalty programs offer them no value at all”¹. Affecting the success of these programs over the last 4 years is the rapid adoption of customers interacting with brands online. Traditional methods of loyalty marketing are not addressing the needs of online customers. But where traditional rewards programs are failing, gamified loyalty programs are rising to the occasion; consistently deliver higher customer acquisition rates, better engagement on and offline, and clearly offering customers value well beyond the traditional transaction based rewards model.  Innovative brands are embracing gamified loyalty programs, and as a result are putting significant competitive pressure on those brands that have yet to deploy this next generation of loyalty programs.

2. The e-commerce/retail sector will deploy gamification faster than any other industry. Despite its increasing lack of success, loyalty marketing has been a cornerstone of the retail industry for a long time. With gamified loyalty programs rising in popularity, the rapid adoption of these programs in the retail and e-commerce industries is inevitable. Gamified loyalty programs – unlike traditional transaction based models – give marketer’s access to key customer metrics from acquisition to engagement.  These insights allow marketers to better personalize interactions with their customers on and offline.

3. Gamification implementations will become more brand specific and allow more personalization of the user experience. One of the regular complaints I hear from marketers using a traditional loyalty program is that legacy loyalty program vendors provide a one-size-fits-all approach to their programs. As more brands embrace gamified loyalty and rewards strategies, gamification experts will need to ensure that their programs are on-brand and authentic, but they should also be personalized.  Truly effective gamified loyalty programs should allow marketers to target specific rewards to their customers based on their buying habits and demographic/psychographic information. A more personalized experience for customers results in higher customer satisfaction, which means more customer loyalty.

 4. Many gamification implementations will fail due to an absence of ongoing program management. Gartner released a report in late 2012 announcing that 80% of gamification implementations would fail. Despite the success gamification saw in 2012, this number seems likely, unless gamification experts embrace gamification as an ongoing strategy and not a bolt-on solution. While this means that gamification requires more work, it has also lead to some truly effective gamified loyalty programs that deliver a huge impact to the brand’s bottom line.

 5. Successful gamification implementations will be cross-device, cross-platform and even available offline. Now more than ever, customers are interacting with brands through a wide variety of channels; mobile, tablet, web and believe it or not – sometimes even in-person. Unless customers are willing to register and login when using these various platforms, most brands have no way of knowing users as they move between them. As brands search for ways to get data from and develop relationships with their customers, the need for knowing who your customers are across channels has become crucial. Gamification implementations give customers a real reason to register and login, and this is a critical first step for a brand to develop a true relationship with their customer across all of their various platforms and touch-points.

 6. Advertisers will embrace gamification as a new growth area. With the popularity of consumer facing gamification on the rise, it is only a matter of time before advertisers realize the huge new revenue potential these programs hold. Consumer facing gamification implementations provide an entirely new revenue stream, allowing higher ad revenues for brands and new advertising opportunities for sponsors. Brands like the NFL have already begun to embrace this trend, partnering with Visa as a primary sponsor for their NFL Fan Rewards program.

 7. Gamification platforms that provide actionable analytics and reporting will succeed; those who don’t will fail.  No gamification implementation is complete without a robust set of real-time analytics and insights. These insights tell marketers what is working and what isn’t working, and allow for real-time adjustments in gamified loyalty programs. Gamification companies will increasingly need to demonstrate the value of their products using detailed analytics and program monitoring. Marketers in 2013 should require simple and relevant metrics that help the iteration process of their program and validate the return on investment that a gamified loyalty program delivers.

¹: “Building A World-Class Loyalty Program”, Forrester Research, September 28, 2012[FRI1]

Posted in: Blog, Gamification, Loyalty, Social Media

We are very excited to announce that we will once again be gold sponsors at Gamification Summit in San Francisco this coming April. GSummit is one of our favorite events to attend, connecting gamification and engagement experts, with industry professionals from all over the world. In addition to sponsoring, our CEO Keith Smith will also be speaking about the intersection of loyalty and gamification, specifically focusing on how some of our clients are using gamification to enhance their traditional loyalty programs.

We want to give our fans and fellow gamification lovers the opportunity to attend GSummit for free! Head over to GSummit’s Surprise and Delight entry page and fill out the form and then tweet that you entered for a chance to win. The contest ends this Friday 1/18 at 4pm EST. Good luck!

If you want to read up on our experience last year at Gamification Summit, you can check out the recap in our archives, here.

Posted in: Blog, Conferences, Gamification, Loyalty

Happy Friday! This time of year is busy for everyone, whether you were preparing for the apocalypse today or trying to do some last minute holiday shopping. If you got too busy to keep up on gamification, loyalty and engagement news, you can catch up on our favorite articles below.

Ice, Lycra and Nike Plus – Getting Gamification and Engagement Right Huffington Post 12/21/2012 Nike is often used as an example of a brand that has successfully used gamification to deepen brand loyalty and engage their customers. While the popularity of Nike+ leaves no doubt that people love using the program, what is less obvious is what specifically Nike did to achieve this level of success. Kent Valentine points out that Nike didn’t just focus on their own brand requirements, but instead focused on a customer need, that once satisfied would benefit the Nike brand.

On the ninth day…embrace gamification Entrepreneur 12/20/2012 Still not convinced that gamification can provide value for your company? Read this and contemplate the many ways that it can enhance your brand’s marketing efforts. No, gamification is not for every brand or company, but this is a great article with a ton of examples and ideas on how to use gamification.

Rewards and Reward Schedules in Gamification Social Media Today 12/18/2012 Rewards and how to use them successfully in gamification has been left out of the mainstream gamification conversation for a while. Most gamification providers stand by the opinion that rewards don’t enhance a program and haven’t tested using rewards enough to know the benefit they can create when used correctly. It is great to see some great gamification minds joining the discussion around rewards and how to use them successfully in a gamified implementation.

How Gamification Makes Social a Reality NewsGator 12/18/2012 Most people are familiar with traditional loyalty programs and non-digital recognition programs, but these types of programs just aren’t working anymore with so much of what we do heading online. Taking these programs online and enhancing them with social elements is exactly what BigDoor (and this NewsGator piece) believe is the next big trend.

Current Loyalty Programs Are Proving to Be Ineffective Towards Retailers’ Goal of Creating More Loyal Customers, According to New Research Report From Edgell Knowledge Network MarketWire 12/19/2012 We have been saying that traditional loyalty programs need a face lift and now Edgell Knowledge Network has the report to prove it. Surveying 60+ retailers Edgell discovered that while more and more people are signing up for loyalty programs, many of these customers are not loyal to any one program, and they don’t understand the benefits that brands are offering them.

Social integration and loyalty – here are the brands that did it best in 2012 VentureBeat 12/20/2012 The power of social media marketing was a huge trend in 2012. While some brands flopped in their attempts, some brands flew past their competitors using social media to connect and engage their fans. Of the brands that successfully employed social media to engage their fans, Urban Outfitters, American Express, Honda, Starbucks, and Grey Poupon.

Don’t believe us that people want loyalty programs? Check out this posting on the League of Legends Community board asking why senior members don’t get benefits for spending more.

Posted in: Blog, Gamification, Loyalty, Social Media, User engagement

We’ve all been there, that moment where you reach for your wallet to make a purchase and realize it’s…not…there. That was me yesterday at Costco, scrambling around in my giant bag at the checkout before apologizing profusely and returning to my car in a panic. After a few moments spent tearing apart my car (I can’t be the only one who frequently loses things in there?), I resigned myself to the inevitable hassle of calling credit card companies and restricting all my accounts. While the process is a massive inconvenience and my afternoon plans were derailed, there was something else bothering me about the loss of my wallet.

As I sat making a list of all the cards I carry, the ones that weighed the most heavily upon me were my loyalty program cards. The Starbucks gold card I have been carrying since 2010, the Feierabend Stein Club Level Two card (I wrote about here) with only 6 punches left to fill out or the local pet store program where my next bag of better-than-I-feed-myself cat food will be free. It’s silly and maybe irrational, but I can’t be alone.

A few of my precious loyalty cards...

These programs represent important parts of my life as well as a commitment of time to each brand I am loyal to. The barista at the Starbucks across the street from my apartment knows my drink, and knows what I look like when I need an extra shot of espresso in the morning. My gold card represents not only my status as a customer, but my daily interactions with a brand and its employees. My Feierabend Stein Club card represents a weekly lunch with friends, an embarrassing number of beers and a status as a well-known customer at a great bar. My point is that when brands get these loyalty programs right, they really are creating a relationship with a customer that goes beyond the free coffee, or t-shirt. It’s about status and a sense of community that can be created by small brands and large corporations alike.

The gamification industry doesn’t seem to give customers who are engaging in these rewards based loyalty programs much credit. The majority opinion is that customers are being manipulated, given free stuff to distract them, and that this tactic will inevitably fail. I think the industry has it wrong. Customers of retail or ecommerce brands are going to choose a brand that gives back, over a brand that doesn’t. I choose Starbucks over their competitors because I get a free coffee once in a while. I choose Best Buy because I get reward points that lead to gift certificates that I can use on high value items I want. I am not being manipulated in a negative way, I’m getting access to things I want, for choosing brands that I would engage with anyways, I just engage now at a higher volume, with greater loyalty.

That isn’t to say that free stuff is the only reason I stick around. As I mentioned above there are plenty of intrinsic reasons I visit these brands regularly as well. But the unfortunate reality retail brands are facing is that the personal value I get from buying an iPod at Best Buy isn’t much different from the value I get buying the same product from their competitor. There are just too many options for customers, and customers want something back.

This might seem heavily focused on traditional loyalty programs, and it is. But as the gamification industry is expanding and changing, gamification companies like BigDoor are tying into these traditional “punch card” programs I love so much and making them more dynamic and engaging especially on the web. Increasingly it is becoming important for brands that get it right in person with their customers, to also make a better impression online. As I spend less time in physical stores and more and more time online the relationship I have with these brands needs to shift online as well and if my loyalty programs and rewards follow me there, that is even better. Apart from online purchases, I can be valuable to these brands in other ways. My reviews on products, my recommendations to friends in my social graph, these are actions that brands value but previously haven’t tracked or rewarded customers for in the past. I’m so excited to see this changing and gamification is playing an important role for big brands who aren’t sure how to accomplish this.

An incredibly sweet person returned my wallet to me late last night and as I checked through it to see what I was missing, I happily noted that the thief had not stolen any of my loyalty cards. I’m still sorting out all my accounts this morning, and my debit card won’t arrive until tomorrow, but I was still able to pay for my morning coffee at Starbucks. When life is temporarily hectic and upside down, access to my morning coffee and routine, is priceless.

Posted in: Blog, Gamification, Loyalty