Guest Blog by ReferralCandy: Can Gamification Increase Customer Loyalty?
Friday, February 15, 2019Lauren Macdonald
Gamification is the application of game playing incorporated into everyday life. Businesses have started to gamify their marketing efforts in order to engage customers more. Gamification is a strategy that motivates the customer through gaming techniques.
Games are the only force in the known universe that can get people to take actions against their self-interest, in a predictable way, without using force. – Gabe Zimmermann
When gamification is successful, it motivates the players to take action. It will also break tasks into manageable chunks and give the users a cue to complete tasks. Gamification can increase marketing ROI as customers share their accomplishments with their friends and family.
Gamification Plays on Customers’ Competitive Spirit
Gamification taps into the psychological aspects of our life. It plays on the customers’ competitive spirit. Gamification can take a mundane task, such as buying fast food and put a competitive spin on it. This can make even the simplest purchase a little more exciting.
Whether it is collecting the latest token from your favorite store or going on a hike to earn points off your next purchase, we all like to outperform our friends. Gamification gives you the ability to compete with your buddies even if it is just in loyalty points.
Gamification is great news for business and marketers. Customer activity online grows by an average of 68% and social sharing jumps by 22% with gamification, according to Giga Information reports. Incorporating a gamification strategy can help to reduce marketing costs as customers share their activities more and expand the reach of advertisements.
Gamification Introduces Goals and Milestones
Gamification is extremely effective at creating specific customer behaviors that are desired. These can be as simple as filling out registration forms, making purchases, taking surveys or creating referrals.
TechValidate discovered that 30% of companies that used gamification improved registration conversion rates by more than 50%.
The average coffee drinker doesn’t go into Starbucks with the goal of drinking ten coffees or purchasing a dozen muffins. However, when you introduce gamified loyalty programs, customers may set those goals and return over and over to meet them.
Red Robin has a loyalty program that sets goals for your burger consumption. They reward their customers with a $20 gift card if they come in five times in the five weeks after signing up for the loyalty program. Red Robin is setting the goal for the customer and helping to create a habit of coming to their restaurant each week.
Gamification Improves Customer Retention
Customers return not only because they love your products, but also to play the game. McDonald’s has been using gamification with its Monopoly game since 1987. The game is responsible for a significant lift in same-store sales. It works by bringing customers back who may have eaten at another burger joint. The customers receive discounts that get them to return over and over.
McDonald’s saw an increase in sales by 5.6% in 2010 in its USA program. Many people were engaged just to buy tickets. Their program was so popular that in 2014, McDonald’s doled out over $500 million in prizes.
McDonald’s consumers have admitted going to eat there every day to collect the tokens for their Monopoly board. The game can be as addicting as the food. The combination of a quick meal and the possibility of winning $1m or even more cheap food is very enticing.
The Monopoly game pieces have many free food items that keep customers returning. However, it usually encourages the customers to spend a bit more to get a complete meal. Rarely will you have a customer come in for a free burger and leave without also buying some fries and a drink.
Read more: 8 Ways to Retain Customers
Gamification Increases Marketing ROI
As customers get more and more excited about participating in games, they tend to share their accomplishments and achievements with their family and friends. A like or share on Twitter or Facebook can now increase a company’s marketing efforts as the reach increases with each person that shares their progress.
Gamification strategies can lead to a 100% to 150% increase in engagement metrics or even more. With the right strategy, your customer base will be motivated to refer their friends and family as well as share their progress in the game.
The clothing company, Moosejaw, used an innovative gamified system which increased sales 76% through gamified activities, including 240k social media impressions. This resulted in an impressive 560% ROI from initial marketing expenditures.
Domino’s Pizza increased their sales revenue by 30% with their game app that allows customers to create their own pizza. The app increases the customer’s engagement in the ordering process, which in turn increased sales.
Teleflora gamified its store with a social engagement scheme offering points for actions, increasing traffic from Facebook by 105% and conversion rates by 92%. They created giveaways and the entries required customers to like, comment and share their social media posts.
Tips for Gamification Marketing
First and foremost, you should know your audience. This will help you determine what type of gameplay activities that will engage them. If your customer base is full of millennials, you may want to select a different type of game than you would for the Baby Boomer crowd.
Test out other games that have been done in your industry. If there is a game that has had a lot of success, you may want to pattern your game after it. There is a reason that it succeeded. Likewise, if a game flopped, don’t assume that you will have the magic touch to bring it to life.
Establish the incentives. You can even gamify this process if you like. Create an online poll asking your customers what types of rewards that would motivate them. You can give them a bonus point for participating in the survey.
Set goals and timelines. Make sure that your game has a start date and an end date. This will help you measure the success or failure of your gamification strategy.
As you can see, gamification is increasing customer engagement, tapping into the the competitive psychology of customers and helping to increase the marketing ROI. The more competitive the game, the better participation and customer engagement you will receive. A gamification strategy can definitely increase customer loyalty as it motivates and incentivizes customers to return to play. This will improve your sales with the right promotions.