Loyalty programs – is it just a game?

There are many dimensions to the psychology of loyalty programs and one that is of particular interest to me is the role of gamification – both in the design of programs or as a tactical element of interaction.

I like this definition of gamification from badgeville.com

Gamification is the concept of applying game mechanics and game design techniques to engage and motivate people to achieve their goals.
Gamification
taps into the basic desires and needs of the users impulses which revolve around the idea of Status and Achievement.

So do loyalty programs, specifically those points based with tiers and status structures, have any of these elements?

1. Yes, they engage and motivate people to achieve their goals (based on levels of tiered benefits)
2. Yes, they tap into the basic desires and needs of the users (member’s) impulses which revolve around the idea of status and achievement.

From birth, we are wired and motivated to engage with stories as we are to play games. Digging into the motivating forces of games is where the fun really begins.

In Dr Jason Fox’s book ‘Game Changer’, he identifies the 3 core elements of game design as (in summary):

Goals = reward
Rules = challenge
Feedback = stimulation

When designing your loyalty program, think about these 3 core elements, from the members’ point of view:

Goals = what rewards/status/tiers are your members working towards?
Rules = how will they get to these rewards ie what do you expect them to do or buy and how challenging or easy will you make it?
Feedback = how and how often do you keep them informed of their progress?

I like acronyms, so for me it is always easy to remember the “GRF” of loyalty program structures.

In ‘for love or money 2016’ we researched gamification within the 24 ingredients to a successful loyalty program and found that 36% of members see “participating in loyalty games for rewards” as an important ingredient.

So, whether you design your program with the core elements of game design (GRF) or create a loyalty game as a tactical interaction element, you are tapping into the powerful motivational force of gaming!

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