Gamification, the use of game mechanics in a non-game context to drive engagement, is becoming a standard practice in marketing and loyalty programs. The basic premise of gamification is that it uses game mechanics to leverage a participant’s sense of challenge, competition and reward to educate change attitude or behavior to inspire action.

Effective customer loyalty programs are now powered by gamification, which moves engagement beyond the transactional to create deeper, data-driven and more valuable customer relationships. To a large extent, gamification leverages the same tactics of video games and their ability to get players addicted to virtual rewards. Successful gamification finds ways to turn tasks into a competition amongst players or customers by building mechanisms for achievements and public competition.

Few pointers that businesses need keep in mind when implementing gamification:

• Set a clear goal and that goal must be aligned to the marketing or loyalty. There must be a finish line in sight, so customers know exactly what they need to do to achieve that goal.
• Decide what customers should do to progress in the game. Tasks to be aligned with the behavior you want to reward. This could include simple things like sharing the content on social media.
• Recognition is a big motivator in successful games, so it’s important to show customers how they are progressing towards earning a reward. That means structuring the levels such that they seem achievable. Leader boards can play a great part in the recognition part.
• Reward participation. Reward new members bonus points for just signing up.
• Games need to be fun and a delight to play. A very effective gamification technique is by giving a random reward or freebies at unexpected times. This will give the customer enjoyment beyond the free item.

Peppers & Rogers Group has created a proprietary methodology called the “E7 framework” as a holistic approach to both drive usage and derives benefits from gamification.

Simply stated Increase ENGAGEMENT by EDUCATING, ENERGIZING and EMPOWERING the customer while ensuring EARNING for the client, ENJOYMENT for the user and EVOLUTION of the customer relationship.”

Simply stated, “Increase ENGAGEMENT by EDUCATING, ENERGIZING and EMPOWERING the customer while ensuring EARNING for the client, ENJOYMENT for the user and EVOLUTION of the customer relationship.”

The framework balances increasing customer involvement with creating business value at each point.

Loyalty drivers:

Educate:      Inform customers of products, processes, and events.

Energize:     Stimulate interactions and guide customer use of more services and products.

Empower:   Transform customers into proud brand ambassadors.

Earn:  Create value through increased awareness and customization.

Enjoy:   Users have fun and stay engaged with the program.

Evolve: Understand customers much more than through traditional CRM systems.

Gamification has its biggest impact in ensuring customers keep coming back. In addition to points for purchase, providing users with a sense of achievement and competition to keep them engaged provides real retention benefits. While gamification is a very effective tool, practitioners need to take care to use it in the correct context, and not overuse it. Gamification can be integrated to transactional behavior where it is possible to measure the direct impact of gamification on turnover. It is for this reason that gamification is playing an increasingly bigger in loyalty strategy.