The impact of gamification on loyalty strategies

Games are fun – and gamification has become a serious loyalty strategy that achieves results beyond fun and games.

A key component in many successful customer engagement strategies today, gamification is becoming a bigger focus of loyalty programs thanks to its broad appeal and relevance across industries — from fitness to restaurants and retail. Drawing from elements of gaming like completing missions and earning points, gamification makes it fun to engage with a brand whether a consumer is playing a weekly game that educates them on the car they purchased, improving their performance on an exercise bike or receiving a promotional gift during their birthday month.

Now that traditional points-based loyalty programs are ubiquitous, gamification tactics such as multi-step challenges, games of chance and mini-games help a brand engage, better learn about their customers and stand out among the competition.

Gamification is the application of game-like elements and experience design to spur user participation, motivation and retention. Simply put, gamification is a fun and effective way to enhance customer engagement and encourage desired behaviors from logging into an app to willingness to try a new product or share a recommendation on social, all while keeping a brand’s name top of mind.

Privacy laws now require consumers be provided with opt-in or opt-out rights to the use of cookies on online platforms. Consumers will engage with greater confidence when loyalty programs are transparent about their privacy practices and give consumers control over their data. Gamification is an opportunity for companies to both verify consent and give consumers an exciting and engaging way to willingly provide the information they choose to share.

The most successful gamification programs strike a balance between simple participation, active and consistent engagement and competition. Whether it be a confetti-blasting spin-and-win or a weekly gifting of promotional discounts, these tactics ultimately reward the consumer for continued engagement with the brand.

A lasting relationship is built by providing a unique experience and tapping into the consumer’s desire to play and be rewarded rather than simply making a purchase. But gamification must be done right.

Gamification is part of an effective customer engagement and retention strategy, and any gamification strategy should be an integrated part of your loyalty strategy. Some best practices include:

Decide what you want to accomplish and build around that. Whether your goal is to cross sell between brands or to have more loyalty members download your app, it’s important to establish a strategy around well-planned goals.

Gamification is best when it’s not one-and-done. Create a regular cadence of gamification experiences for your customers. For example, if you post a game as a weekly event, customers will recognize the pattern and return to find the next installment. This interaction becomes routine, benefiting both the customer’s desire for the experience and the brand’s desire for consistent engagements. Many gamification providers have automated the game-creation process, making it easy to build new games and keep the consumer experience fresh. The customers who frequently return can become true brand ambassadors for your program.

Games can be entertaining, but gamification opens a two-way street in which the customer enjoys a playful experience and the brand creates an avenue for a potential conversion. Whether games are shared via email or mobile app, they can deepen the relationship with the customer. For example, by linking a survey to a scratch-off game, the customer can be asked to provide feedback on their purchase or some additional profile data for a chance to be rewarded a free item.

Gamification can make the entire customer experience feel like a game to be enjoyed. Encouraging customers to engage with the gamified experience is the first step, and once that is established, it can lead to several benefits, including:

We expect loyalty gamification to expand its reach and evolve with time.

As the experience of the customer journey becomes more customized to a customer’s preferences, both the journey itself and the metrics related to the journey will improve. Gamification looks to personalize at scale, and the power of loyalty programs will be strengthened by more engaged members.

After all, a customer who logs in to a loyalty program daily and spends time playing a game vastly differs in their level of engagement from someone who visits occasionally. As more customers participate in the program, their preferences and interests can help brands provide a personalized and differentiated experience. In that way, a loyalty program can grow to be a real, unique and personal connection for each member.

Gamification tactics will also continue to evolve along with technology. From the increasingly widespread use of Web3 to the growing popularity of AI, companies can use technology to learn more about what motivates their customers. By creating gamified experiences that are instant, personalized and engaging, a true two-way value exchange will be created.

Mastercard works with brands to develop and execute loyalty strategies that drive stronger customer relationships. We offer loyalty products and services for the world’s top loyalty brands with the goal of inspiring greater loyalty, through smarter offers and better engagement, rooted in faster and richer data. Our loyalty strategic services include program design, diagnostic services, customer journey mapping, along with loyalty platform offerings.