Leveling Up with Gamification and Customer Rewards

If you’ve ever played a video game before, you know that they’re fun, addicting, and surprisingly motivating. Between the leaderboard on the side of the screen, the powerups and special items, and the thrill of crossing the finish line, the idea of winning keeps you moving towards a goal. Even if you lose, the excitement of playing is enough to bring you back to play again.

These game mechanics are also super effective in other areas, including for your business. Known as gamification, the use of game mechanics outside the video game world has the power to dramatically change your customer retention efforts. This becomes even more powerful when combined with other loyalty efforts such as a rewards program.

From punch cards to tokens to mobile apps and loyalty coalitions, reward programs have been rapidly evolving to meet customers’ lifestyles and expectations. Since these systems are designed to bring customers back, introducing a little bit of competition can go a long way to keep people engaged with and excited about a brand.

Let’s take a look at three ways you can use rewards to “level up” your retention events and increase your revenue.

Build the Perfect Leaderboard with VIP Tiers

One of the most motivating elements of any multiplayer video game is the leaderboard. Typically displayed directly in the playing window, a leaderboard shows each player where they rank among their fellow players and, as a result, how far they have to go to be victorious. This is known as the Local Ladder Effect, and plays into our desire to know where we stand in relation to our peers. The further we are from the top, the harder we’re going to work to get there.

A tiered rewards program is the easiest way to introduce this type of competition to your customer experience. By separating your customers into distinct groups based on how they interact with your brand, you create an exclusive group of “top performers” that customers will flock to. After all, who doesn’t like to win?

Tiers introduce an easy and effective way to take advantage of this wish – especially if your rewards increase in value! With better transactional rewards or exciting experiential ones on the line, your customers won’t want to lose their coveted VIP status. When your customers know they’re at the top, they’ll definitely want to stay there, which ensures that they’ll keep making purchases to retain that additional value.

Offer Valuable Power-Ups with Bonus Points

One of my favorite elements of any Super Mario Bros game has always been the Star. Whether I’m trying to defeat Bowser or speeding around a racetrack, powerups like the invincibility Star always give me that extra boost. In a matter of seconds, I can go from losing the race to leading the pack, reigniting my motivation to finish the game victorious.

A bonus points campaign can do the same thing for your rewards program! When you give your customers the chance to earn more rewards for a limited time (say a weekend or holiday), you immediately made completing a purchase more valuable. This is largely a result of the loss aversion principle, which states that the effect of a perceived loss is always stronger than those of a perceived gain. In other words, humans are wired to avoid loss wherever possible, whether real or perceived.

Your bonus points campaign, then, will push customers to return faster in an effort to take advantage of the additional value you’re offering – especially if they’re close to redeeming a reward. With something they really want on the line, customers will be driven to earn as many points as possible, increasing their average order value. The positive emotions associated with those bonus points will then impact their overall perception of your brand, making it both more valuable and more memorable.

Award Customers Trophies with Exclusive Rewards

Why does anyone play a game? The reality is, most of us really want to win, and it’s from that desire that competition is born. However, simply winning isn’t always enough – we also want our efforts to be rewarded. I know whenever I start a new video game, I’m most looking forward to that coveted Congratulations! Screen and will continue playing until I reach it.

While you could argue that rewards of any kind are what your customers are vying for, why stop yourself there? As we discussed earlier, a tiered rewards program is the perfect way to separate your most valuable purchasers (MVPs, if you will) from the rest of your customer base. As purchasing machines, these customers deserve the gold standard of rewards, and you can deliver it with exclusive top tier rewards! Maybe these perks would include special events, early access to sales, or a lower reward redemption threshold – whatever you decide, a tiered program gives you the power to limit these rewards to only your best customers.

With exclusive rewards, it’s like you’re adding a badge or trophy to each of your customers’ experiences with your brand. It’s that extra nudge that will give your best customers the chance to truly feel appreciated and will inspire the next wave of MVPs to step up. This profitable cycle will keep customers engaged, and make the finish line (your top tier) worth it.

Beat the Competition with Gamification

When you turn your rewards program into a game, you offer a brand experience that customers can’t resist “playing”, spiking engagement rates and customer satisfaction. This will act as a valuable switching cost that keeps your customers’ eyes on the ultimate prize: a VIP membership with your outstanding, one of a kind brand.

Guest Post by Kirsten Burkard at Smile.io

Kirsten Burkard is a Rewards Marketing Expert and lead editor of the Smile.io blog. She’s passionate about excellent customer service, art and design, bows, and anything Disney.


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