Boost customer loyalty and improve lifetime value.
Introduce a points-based loyalty program, where customers earn points based on their behavior and can redeem them for rewards - and make the redemption process easy.
This gamification method tends to promote frequent, short-term purchases. Understand your audience to create campaigns that will appeal to your shoppers. Tailor any of your gamification techniques to deliver targeted messages based on your customers’ behaviors, especially when dealing with diverse groups of customers.
- According to studies, there’s a correlation between higher point values and increased customer spending. However, what really matters is the ease of the redemption process and the rewards available.
- Use simple points rules where customers can easily understand how to redeem prizes. Loyalty programs need rules that are easy to understand. Do not include a long list of rules and restrictions. If rules are too confusing, customers will quickly lose interest in the rewards program.
- Start with straightforward rules and adjust to the consumer. You’ll want to make changes because of customer feedback, unintended loopholes, and new business features.
- Don’t include hidden fees or rules.
- For example, see how simple Jamba Juice’s rules are:
- Alternatively, reward shoppers for their non-purchase activities. Let people earn points when they refer a friend or sign up for your mailing list. For example, Office Depot rewards customers for joining the program and recycling their ink and toner cartridges. It also gives participants a gift on their birthdays.
- Personalize offers based on customers’ prior shopping history. Use data integration and demographic analysis to meet expectations. For example, Sephora creates personalized product recommendations for Beauty Insider members. It asks that customers create a profile and input hair type, skin type, and other information, so that it can generate offers based on individual needs, matching the consumer habits and needs.
Introduce an achievement-based reward system where you ask participants to complete a set of actions or tasks to unlock benefits.
This approach would fit higher price-point businesses like airlines and hospitality companies. Require participants to attain certain levels of achievement, and consider adding a tiers system. Every level attained offers customers more rewards for more engagement. For example, Treehouse - a virtual training academy that teaches coding, app development, and business skills - motivates users to earn badges and points as they progress with the course material.
- Use a short sign-up process. Enroll people into your loyalty program by requesting basic information, like name and email address.
- Use an infographic to show them how quickly and easily they can join. Tell them how many minutes it takes to fill out the form. Here’s a banner from Hotels.com Rewards as an example:
- Eliminate any barriers for a customer to join. For example, Gilt gives shoppers a choice to sign up for their free memberships via email or Facebook. This social login feature lets users share, buy, and interact on social sites with your brand.
Launch a competition where customers compete against one another - and use a leaderboard to update scores daily.
For example, Autodesk, a 3D design, engineering and entertainment software company, launched a competition to increase usage of their software during one of their products’ trial period. They created captivating tutorials for the product, inviting participants to collect points in virtual missions and compete on the leaderboard. Top users received a prize for their efforts. The contest increased trial engagement by 54% and conversion rates by 15%. The activity overall helped Autodesk increase revenue from selling other products as well.
Offer valuable benefits that customers desire or need, and make sure that they seem worth the loyalty investment that the customer is making.
Not every gamification strategy works effectively. If not executed properly, it can harm your brand, instead of help you. Here are two examples of gamification backfiring:
- Before 2005, Subway gave customers a free meal after they collected stamps on a card. However, an influx of counterfeiters began copying these highly sought-after loyalty stickers. The food chain transitioned into a food-scoring system where you earn 1 point per dollar spent. You had to spend $75 at Subway to get a free $5 foot-long sandwich - an offer that left previously-loyal customers distinctly underwhelmed.
- Colloquy Talk found that grocery store products with a Kroger loyalty card are priced higher than products at their competitor Target without a card. Consumer Reports also note that customers “can save big on this week’s specials, but it’s easy to blow all of your savings buying other higher-priced items while you’re in the store.”
Engage shoppers with small, quick rewards. Let them redeem prizes on the second or third store visit. Instead of discounting, add bonuses to a customer’s purchase. For example, try Buy 1 Get 1 Free instead of something like Buy 9 Get 1 Free, which takes a while to redeem. Tap into your shoppers’ emotional loyalty. Evaluate which relationships are important for your business and design a rewards program that cultivates those customers, says Michael Hemsey, President of Kobie Marketing.
Implement digital loyalty programs where customers receive digital rewards instantly to make scaling easier and avoid stockpiling paper coupons.
A digital approach allows personalization, faster turnaround, and streamlined administration. Digital rewards service providers offer online merchandise in various brands, value denominations, and local currencies. You can manage inventory in real-time. Here are two great examples as a reference:
- Starbucks’ mobile app allows users to place drink orders and make payments. It also offers various ways to incentivize users. Customers can earn a reward from multiple in-store visits. For example, making a morning purchase of their grande iced drink can earn app users a discount if they visit again in the afternoon.
- Kuru Footwear entices its customers to share products on social media. Every time a customer shares via Facebook, Twitter, Pinterest, or Google+, they get 25 points. Kuru has also gamified post-purchase reviews, rewarding customers who leave honest opinions about their products. It earns the company more reviews and more social proof to spread to prospects.