Loyalty programmes are a common way of retaining customers. In most instances, businesses opt for a simple points system that equates to money off future purchases.
The problem with a points-based loyalty programme is they’re at their most successful when customers make routine purchases.
Food, fuel and other staple purchases are all purchases that work well with a points-based loyalty programme. Because customers make regular purchases they can see the reward points building gradually.
The gratification is there. And again when they see their weekly shop reduced by 10% or more.
On average, your customers are members of 14 loyalty schemes but they’ll only engage with 6 of them. To make sure yours is one of those 6 it needs to do more than just give money off a purchase…eventually.
While discounts are a good draw, it’s the engagement component that’ll make your loyalty programme a success. Gamification is an excellent place to start.
Gamification works on applying gaming principles to customer behaviour. Point scoring, levelling up, competition and other traits can all be applied to how your customers shop.
However, for your loyalty programme to work you need to fully understand how your customers behave.
Luckily for you, your business has first-party data ranging from average spend to the products they like. Using a customer data platform to get a clear view of your customers and their behaviour is essential.
The Single Customer View provides you with the foundation on which your loyalty programme can be built.
Understanding how your customers interact with your website, your products and services will inform who best to gamify your loyalty programme.
Pulling together your product and transactional data is essential. This is what will determine the kind of rewards customers get from levelling up.
A customer data platform allows you to create highly personalised communications. This is because you can essentially craft messages that reflect each of your customers’ needs and wants.
The most successful loyalty programmes use these personalised communications to share content just for their members.
This sense of belonging can be a powerful driver, especially when loyal customers are given early access to sales. Or even exclusive sales.
Inside information on upcoming products or a members-only blog all serve to create a tribal feeling for your customers.
Once your customers feel part of the club they will not only engage with your loyalty programme but will be naturally predisposed to spend more.
Within the context of a gamified loyalty programme, you can build a narrative for each customer. This can be based on celebrating their progress, remarking on their most recent reward and how close they are to the next one.
Creating these touch points creates a sense of excitement and accomplishment as they gain rewards.
For your gamified loyalty programme to work, you need to create the right balance of challenge and reward. If the rewards are too hard to earn or cost too much money, customers will lose interest.
You can use the data in your Single Customer View to tailor rewards to each customer. That way customers who spend less aren’t priced out of the loyalty programme.
These customers will inevitably step up their spending with you and find another business that doesn’t exclude them.
In practice, your customers don’t need to know their experiences are tailored proportionally to their spending habits.
Similarly, if you have a league table, there’s nothing stopping you from having multiple league tables. These can be invisible to anyone outside of that league and again, these can be broken down by spend.
The benefit of this approach is everyone feels the same level of engagement. Everyone has a chance of earning rewards.
One of the most satisfying elements of a video game or a classic RPG is when your character levels up.
They get a profile buff, new equipment and new attacks to prepare them for the next stage of the game. The more levels they climb the more powerful they become.
While your customers won’t be slaying dragons (hopefully), they will be killing their reward thresholds. Or at least, they should be.
An essential component of a successful gamified loyalty programme is realistic reward thresholds.
Again, these should be tailored to your customers’ spending habits and average order value. And, like any good RPG, those thresholds gradually extend as they work their way up the ranks.
Assuming your loyalty programme drives engagement and increases both the average spend and the frequency of spend, these goals will be hit with ease.
If customers struggle to hit those thresholds they will lose interest, no matter how tantalising the rewards are.
Just as your character gets cool weapons and armour for progressing in the game, your customers need suitable rewards.
It doesn’t have to be anything quite so exciting as the Crown of Command or an enchanted blade. But the rewards you offer need to feel:
Your customers need to feel like they can realistically reach the thresholds you set. Some businesses place time limits of 30 days to hit the next threshold or risk losing their progress.
This is a two-edged sword. While it creates urgency and might drive sales, you also run the risk of driving away customers. It won’t take many instances of a customer losing out to disengage from the programme and possibly your brand.
The rewards need to be desirable. That is to say, your customers perceive them as worth having. Where you can sustain interest is by seeding especially good rewards throughout. This gives your customers something to work towards whether it’s a high-value gift card or a free item.
Any free products you offer can be tailored to your customers based on their interests and shopping history with you.
The customers need to feel reaching the reward was worth it. This sense of achievement is important as without it they won’t feel the drive to work towards the next reward.
Your ability to sustain your customers’ engagement through value is what will ultimately make your gamified loyalty programme a success.
Rewarding your most loyal customers can have a powerful impact on your customer base. For one thing, it drives a little healthy competition. Which has the added benefit of driving up sales.
Thanks to your customer data platform you can easily identify who your top-spending customers are.
It’s an easy thing to reward them on a monthly or quarterly basis. It’s up to you what those rewards look like but the grander the gesture the more goodwill you’ll earn.
Also the more likely they are to talk about it.
Happy customers will share their experiences. Loyal customers will shout it from the rooftops. They will share on social media and tell their friends and family.
Aside from ensuring future sales from that customer, their experience will attract new ones.
Gamification of loyalty programmes can prove successful, providing you focus on delivering value.
Remember, the majority of loyalty programmes customers sign up to go ignored. This is sometimes because they’re pressured into signing up. In the majority of cases, it’s because the programme isn’t worth their time or effort.
Delivering a highly personalised, customisable loyalty programme is what your customers expect. Adding in gamification with regular rewards and prizes is next level.
With careful planning and a robust customer data platform, you can create a sustained and engaging gamified loyalty programme.
To learn more about how a customer data and engagement platform can help you to build your loyalty programme, get in touch with the team to request a demo.
About Xtremepush
Xtremepush is the world’s leading customer data and engagement data platform. We work with various top brands within the eCommerce industry. Schedule a personalised demo of our platform to learn more about how we can help your brand drive repeat customers and increase revenue.