Are you searching for a surefire way to increase customer loyalty? Look no further!
Customer loyalty is becoming more difficult to earn every year. With so many available alternatives, customers are more likely to switch brands in the coming years. However, there is one solution that can change that.
Gamification.
Adding gaming dynamics to your customer experience can make a huge difference in how often customers engage with your brand and return for repeat purchases. Based on 1Up data, gamification implementation can lead to a significant uplift in your business performance. In fact, research states that the use of gamification by brands leads to 47% increased engagement and a 22% growth in loyalty.
Sounds impressive, huh?
In this article, you will find out:
- What is Gamification and How it Impacts Customer Loyalty
- Key Dynamics in Gamification That Make it Successful
- Gamification Tactics and Examples That Show Results
- Gamification Errors to Be Aware of and Skip
Gamification: The Real Thing Behind the Success of Customer Loyalty
Gamification is a proven psychological technique that can help you significantly improve customer loyalty. By introducing game dynamics and rewards for specific customer behavior, you help your consumers feel emotionally attached to your brand.
Does it sound silly or simple to you?
Think about it…
Standard loyalty programs are typically considered dull. You make a purchase or a review; you receive points that you can later redeem. There is no fun element, no excitement, and no reason to prefer one brand over the other.
Gamification can make a difference to your program. The gaming experience completely changes the way your customers interact with your brand. Customer gamification programs that incorporate game elements are shaping new customer loyalty market trends as the global gamification market value was at $22.2 billion in 2024 and is expected to reach $102.5 billion by 2033.
Key Elements That Make Gamification Successful
Gamification is a vast field. And while there is no single correct approach that works for all businesses, there are five primary gamification mechanics that make gamification a powerful customer loyalty driver.
Points are the most obvious element in any loyalty program. By granting your customers points for completing specific actions such as purchases, reviews, or social shares, you give them a reason to return.
Badges and achievements are a visual representation of certain milestones or activities in the customer journey. Customers feel a natural urge to collect them to gain status or social recognition.
Leaderboards create a competitive environment among your customers. If the leaderboard is optional, the game element is more likely to be used by young customers who grew up with digital entertainment.
Quests and challenges are time-limited missions that drive customers to complete specific tasks. This dynamic works best for behavioral changes and specific micro-moments to nudge the customer to action.
Last but not least, tiered rewards are a great way to create more value for customers who are consistently active on your platform. It will create an urge to level up.
Combining game elements that work best for your brand is essential for long-lasting success. Experiment with options to find the right formula and don’t use elements that are “common” and don’t represent your business values.
Gamification That Works: Tactics and Examples From Real Businesses
So now it’s time to show you what happens when businesses put in the work and do gamification right.
Retail businesses are at the top with 28.5% of total gamification market revenue coming from the Retail sector. And it’s no coincidence – Retailers that use gamification as part of their strategy are outperforming their competitors significantly.
McDonald’s, Cult Beauty, and other notable global brands successfully gamified their loyalty schemes and observed a significant rise in customer engagement and repeat purchases as a result.
But the examples of gamification go way beyond corporate giants.
Studies show that when well-implemented, gamification increases conversion by 50% and improves sales performance up to 3.5 times through friendly competition and challenges.
Here’s an interesting fact…
Supermarket loyalty members are the most engaged members globally: they earn points each week and typically redeem points every two weeks. Compare that to airline program members that earn points only once in two months and redeem them four times a year on average.
Why? Gamification wins again. Supermarkets typically have better gamification strategies that drive engagement.
Mobile-First Gamification – The Gamification Trend of the Future
Do you want to know where gamification is going?
Mobile devices are set to change everything. With a growing number of smartphone users worldwide, the game design and mobile-first approach are gaining more and more weight in the loyalty market. By applying mobile gamification, companies can improve customer lifetime value by 48%.
The advantages are easy to notice:
- Customers can participate anytime and from any location;
- Push notifications will keep your brand at the top of the customers’ mind;
- Mobile apps allow for deeper and more interactive experiences;
- Location-based promotions are also one of the successful gamification methods that let you create unique opportunities for engagement.
Another interesting fact… Studies have found that 63% of US adults would willingly give up their personal information in exchange for rewards such as loyalty points or early access to new products and services.
Key Gamification Lessons Learned
Now, a secret that many companies are not aware of…
Bad gamification is a bad thing. Gamification that is not planned or considered correctly can have the opposite effect of what you are trying to achieve.
The biggest mistakes to avoid are:
- making it overly complex and hard to understand;
- only rewarding purchases and ignoring other useful interactions;
- neglecting mobile loyalty experience;
- offering boring or irrelevant rewards; and
- a lack of constant iteration and testing.
Gamification is a trial-and-error approach that requires testing and adjustments for achieving long-term success. It should come as no surprise that half of the companies that implement loyalty and engagement programs admit to making some significant errors.
Gamification has to be done right, and if it feels too much like work, it isn’t right.
Ready to Use Gamification?
Well, you have everything you need to know about customer loyalty and gamification to get started.
But if you are still a bit nervous and feel that you may miss a step – here is a recap of the basic principles of gamification:
- start small and then expand;
- design your gamification program based on your customer personas and brand values;
- pick the behaviors you want to reinforce to increase your CLV – more purchases, reviews, referrals, and any other actions that could help you build loyal customers;
- select the best game dynamics for your use case;
- start with a small and simple reward structure and test it with your target audience;
- make sure the value of your rewards is appealing enough to motivate your audience to take specific actions but reasonable for your business.
Gamification is not something you have to fear. The more time you spend thinking about it without starting, the less likely you will have an edge on your competitors.
Implementing even the most basic system is better than not using gamification at all. So take your first step today, observe your results, test, and experiment to build a program that will drive loyalty and engagement.
The Takeaways
Customer loyalty programs have come a long way from simply accruing points and redeeming them for discounts.
Gamification is the future of customer loyalty, and it’s already here. With customer engagement growing by 47% and a 22% increase in loyalty for businesses that implemented gamification, statistics don’t lie.
The question is no longer whether or not you should start using gamification to build customer loyalty but how quickly you can get it done before your competitors have an unbreachable lead.
