Showing posts with label Rewards. Show all posts
Showing posts with label Rewards. Show all posts

Sunday, November 20, 2011

Gamification – Crowdsourcing that Engages Your Customers

The author is a graduate student of Integrated Marketing Communications at Northwestern University, where she focuses on digital marketing and data analytics.

During my summer residency with the Marketing Store, I spent a lot of time working on loyalty program development and generating interesting ideas to appeal and engage customers. That was the first time I learned about the term "Gamification", and I have been actively following it since then.

As a marketer, gamification is a topic that you might want to start paying attention to. Why? Because gamification is a hot trend right now, just look at Google Trends. Gamification taps into the over 200 million people that play reward based online games. Moreover, investors have taken notice that it has a rapid-growing list of agencies are beginning to help their clients “do gamification.”

But what is it?

Simply, gamification is the act of applying the things that make games interesting to non-game activities. It does not necessary have to be a “game,” it just needs to add some fun components and game mechanics into your content or marketing applications to increase engagement, drive loyalty, and influence customers to complete a behavior. Some of the techniques include achievement “badges,” levels, leader boards, virtual currency, etc. (Check out this post from Rick Liebling as well as the Wikipedia definition for gamification)

The process of gamification identifies what makes games compelling and important to us and uses those techniques to motivate behavioral changes in areas that are not traditionally considered to be fun. One of the more famous gamification examples is ‘The Fun Theory’ campaign by Volkswagen which motivated people to use the stairs instead of an escalator by making the experience more playful.
Another great example is the LinkedIn progress bar, which shows how companies can use simple gamification achievement level techniques to successfully get customers to complete a set of behaviors. LinkedIn wants their users to provide as much data as possible, but users either do not know how much information is enough or are not motivated to fill in the gaps. The feature of progress bar, which is visible while editing your profile page, encourages users to move toward 100% profile completeness.

Nobody wants to see that they are only 65% complete. Thus, this percentage bar triggers the behavior that drives us toward a higher level, which means providing more information on the LinkedIn profile.

In addition, Starbucks also incorporated game mechanics into its popular loyalty program “My Starbucks Rewards.” They understand that the Starbucks brand is not just a place to get a cup of gourmet coffee, but a center for socializing and a lifestyle that customers want to possess. In a never-ending quest to stay connected to the customers and keep them coming back, Starbucks has incorporated the program with multiple reward levels and designated certain perks to be rewarded for each level. They use a progression tracker that keeps consumers incentivized to collect the “badges” of different Starbucks levels and continually engage with the brand.

From the examples above, we can see brands across the spectrum are using gamification in clever and unexpected ways, successfully provoking their customers toward an action. However, besides identifying gamification as a strategy for your company, brand, or app, it is also important to note the reason for considering gamification. Starting from the business goal, you should also think about the behavior you are trying to drive and decide what the story you want to tell. What type of game stays true to your brand while delivering a better experience for your customer? Then you can leverage the tool of game mechanics to engineer a path to your goals, create an interactive campaign, and engage your customers. Welcome to gamification!

Alice Ya-Ching Lee (@aliceyclee)
IMC Graduate Student at Northwestern University

Loyalty Programs: Driving Incremental Revenue?


I recently discovered that the 3rd largest retailer and #1 pharmacy in the nation has plans to roll out a massive loyalty program next year. Walgreens is currently running a pilot of Walgreens Rewards in Richmond, Kansas City, and Portland. The program is based on points that can be redeemed for substantial rewards like gift cards and merchandise. Even though Walgreens is late to market behind the competition, the program seems to build a relationship with the customer over time. In comparison, CVS ExtraCare Rewards are only good for a limited time and more difficult to keep track of. The program will be tweaked based on the results of the pilot, but it seems very easy to participate and rewards customers for behavior that they would be doing anyways. This got me thinking about loyalty programs and wondering if they actually drive incremental sales.
For me, loyalty programs work. I continue to go to Starbucks over any other coffee shop so that I can get closer to a free cup of coffee. I also added a credit card to my Chase account to get double the points from Chase Rewards. If I can be rewarded for behavior that I am already doing, I am likely to increase that behavior. I suspect this is probably true of many other consumers as well. In my opinion, there are a few best practices that will help create a successful loyalty program that drives incremental sales. After all, it costs 5-7x more to acquire a new customer than it costs to keep the ones you already have. So why not give them a reason to stay?

  1. Most important is ease of use. Customers don’t want to be bothered to think about their points. They should be easy to keep track of and just as easy to redeem.
  2. Collect data. Use the data from member profiles to target messages, offers and optimize rewards.
  3. Create an experience. Encourage your members to share their stories, pictures, etc. related to your loyalty program. This will increase engagement and allow you to have meaningful conversations you’re your loyal customers. This can also help to establish passionate brand advocates.
  4. It’s all about value. Customers will remain loyal and increase their spend if they feel they are getting a true value out of the rewards. An example is Southwest recently enhanced their Rapid Rewards program by allowing members to earn points for shopping at retail partners.  Consumers want the greatest value they can get out of each dollar they spend.

What rewards programs are you loyal to?



Jessica Wesley
M.S. Candidate, Integrated Marketing Communications
Northwestern University
@jeswesley