Customer loyalty looks to gamification

Traditional customer loyalty programmes are based on rewarding customer behaviour in order to build up a relationship between the retailer and the customer. However, the established method of collecting points to earn prizes does have a shelf life. As a result, retailers and brands are looking to gamification and how it can be integrated into CRM systems and marketing programmes.

The conventional method of rewarding customers with points does work and has proved to be highly effective for some retailers. However this traditional method  does have its limitations, in that it has become commonplace amongst big retailers and therefore, no longer offers a point of differentiation. The competitive advantage of having a standard points loyalty scheme has waned and such systems do not always provide the retailer the kind of in-depth understanding they require to maximise the effectiveness of segmentation and therefore, sales.

Gamification can be defined as the use of game design techniques and mechanics to help engage with audiences. One of the most popular forms of gamification currentlyis FourSquare, which has over ten million users. Users can claim ‘Mayorships’, unlock’ badges’, and on a more standard level, receive special offers and rewards such as discounts to specific retailers, while also tracking against friends via a leader board. All of this makes gamification as a mechanic for a CRM programme much more engaging and appealing to certain users.

It could be argued that not everyone has access to the internet or Smartphone’s and gamification will only appeal to particular age groups and therefore is possibly limited in its effectiveness. However, if you consider how rapidly Smartphone usage is  growing and that access to the internet is more widespread than ever, it is impossible to ignore this as a new possible CRM platform.

The biggest challenge faced by retailer with established CRM programmes is how to integrate gamification into existing programmes and to decide whether or not they feel it is appropriate for their target audience and product mix. There is little doubt, however, that retailers who are able to embrace a more interactive CRM mechanic will engage their customers more readily than with the tired points schemes of old. Deborah Stone, Managing Director of The Stone Consultancy comments: ‘Smart technology is changing how people deal with the world across all elements, not just online. Gamification is an exciting development for retailers to consider when moving their strategy forward.’

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