What Happens when Old World Loyalty Meets Gamification? Let the Loyalty Gamification Begin!

One of the hottest topics in loyalty and technology right now is Gamification - the technique of applying game mechanics to non-game situations, like health and education.

Although the evolution of gamification ranges from green stamps, to frequent flyer programs, to virtual games like Farmville, and furthermore, there are hypotheses on turning everyday reality into games, very few has asked the key question - how can we apply the principles of gamification back into traditional loyalty points programs, such as AAdvantage and Airmiles? What would that look like?

Well, remember, that the most common method of communicating with members is the monthly points statement. So that’s the best place to let the gamification begin. A glimpse at the future is shown below.

1. Virtual currency: Traditional loyalty programs already use virtual currency, which is a core principle of gamification. Surveys have indicated that cardholders look forward to their account statements - so show them their account balances. And for the convenience of your cardholders, display the cardholder's account number too. When someone is redeeming their points online, they're more likely to search for their account number through their emails than to dig out cards from their wallets.

2. Progression: Show your cardholders where they are in relation to their redemption goals. Many cardholders have already set mental redemption goals, but you can formalize that by giving them an opportunity to set goals during enrolment or through your website. Display their progression as a percentage of points towards the desired goal since it’s a human instinct to want 100%.

3. Levelling: From a loyalty perspective, levelling is typically known as a loyalty class or tier, such as the transition from silver to gold. In most cases, levels are a simple way of referring to a certain amount of points, just like how a yard is another way of saying three feet (keep in mind that in some games, levelling and the virtual currency is not correlated, e.g., you collect coins in Mario Bros., but that doesn’t get you to the next level). Let your cardholders know if they're close to levelling up to the next loyalty tier. Encourage them to spend more by giving them suggestions on how they can accelerate to the next level.

4. Personalized Promotions: Increase engagement with your cardholders by displaying things that they've indicated that they like or prefer. You can still display the same core offer to all your members, but be sure to tailor each message to each group of cardholders using their preferences. For example, if you want to increase bookings at a particular resort, you can highlight the great golfing that's available to members who are golfers, but highlight the spa for members who are spa-goers. The key is to tailor the offer message to increase the probability of a click-through.

5. Leader Boards: Leader boards are a staple in great games – everything from Pac-man to Angry Birds. Leader boards create a sense of achievement, excitement, and a competitive community. On the other hand, typical Loyalty programs are often very secluded and anti-social so the opportunity to improve them is tremendous. It won’t be trivial since there may be privacy issues when it comes to displaying leaders because points are tied closely to actual spending. However, in the brave new world, a cardholder would be able to see where they rank relative to their peers in their region or at a store they frequent.

6. Bonusing: Be creative with bonusing. Give bonus points for behaviours other than purchasing a certain product or buying at a particular time. For example, you can give away bonus points for completing profiles and surveys, for "liking" your Facebook page or for answering questions on Twitter. Use bonus points as a way to increase brand engagement, but use them carefully to prevent inflation of your virtual currency.

7. Lottery: These points are based on fundamental issues in human motivation – the value of a surprise (or random reward) has an exceptionally strong impact in creating repetitive behaviour. So keep your cardholders guessing by injecting a bit of randomness in your program. Examples of this are the age-old swipe-and-win or a more specific implementation such as the Chase Picks up the Tab promo where Chase Bank randomly pays for entire purchases made with Chase cards on behalf of their cardholders – in fact, they claim that they do this every five minutes!

8. Status: Status is usually tied to tiering in traditional loyalty programs, e.g., Elite status in AAdvantage. In traditional loyalty programs, levelling is a predictable course to achieving status since more purchasing means more points, and in turn, more points means higher levels and status. However, we should learn from social gaming applications like Foursquare and Gowalla where status is achieved through social competition instead of predictable levelling. For example, a member can be crowned the "mayor" of a location with special privileges if they frequent the location more than others. Keep your status competition hyper-local (i.e., down to the location level) so that the attaining the status looks achievable.

There are many more game mechanics that you can use in a loyalty program, but this is a start to bridge new world gamification to old world loyalty.