The Evolution of Loyalty

Posted by Maia Rocklin

If used effectively, loyalty programs can generate as much as 20% of a company’s total profits. In addition, 84% of consumers say they’re more inclined to stick with a brand that offers a loyalty program. 

Loyalty programs used to be nearly exclusively a way of offering incentives such as rewards or discounts for frequent purchases from a company, but they have started to evolve. Now, many companies are shifting their focus toward more personalized application-based loyalty programs. 

Gamification: A Key Strategy

Businesses are beginning to employ new types of loyalty programs to maximize results. Gamification is the utilization of game mechanics, behavioral elements, and design techniques in non-gaming contexts, such as loyalty programs. You may have seen this on some applications in the form of badges, points, and leaderboards. 

Gamification systems can appeal to both consumers outside a company and employees inside of one, depending on how you decide to implement them.

Gamifying your company can directly lead toward increased engagement with consumers. Consequently, companies can employ this strategy to build a memorable customer experience and strengthen customers’ connections to your brand. Consumers who feel emotionally connected with a brand have a 306% higher lifetime value, so where there is a chance to reinforce that connection, it is crucial to act quickly and thoughtfully. 

Looking toward the future, gamification speaks to the younger generations through digital applications and games. Topshop, for example, created a digital dating game that allowed everyone to view their company’s clothing in a fun and digestible format. In the game, contestants had to create date-worthy outfits from Topshop’s collection. This appealed to Generation Z specifically by creating something digital, entertaining, and competitive, while still driving Topshop’s sales by advertising through the app.

Gamification for Employees

Gamification systems can also be used internally. Employee engagement is linked to key organizational outcomes. Using a gamification system can drive business performance by engaging and motivating employees, primarily through the following four methods:

  • Engagement: Create a culture of engagement by having employees track their own work progress, understand their strengths and weaknesses, and be directed toward actions that will help them progress and succeed.
  • Learning and Onboarding: A new employee can engage with learning materials such as quizzes and simulations to adapt to their new workplace. It can be similar to a game, where they start at a beginner level and progress from there.
  • Adaptation to Change: Organizations are under pressure to constantly adapt. If employees are unwilling and unmotivated, success is at risk. Therefore, using a gamification system can help to keep employees motivated.
  • Alignment with Organizational Goals: By connecting employees, objectives, and organizational values, a gamification system leverages motivations for feedback, rewards, and achievements.

Gamifying your company comes with a heap of benefits, whether utilized in an external loyalty program or in an internal system with your employees. Or, for maximal results- both. 

Using it Effectively

Over two-thirds of the world’s top 2,000 companies have already embraced gamification, but it takes some time and planning to maximize its benefits. The following are 5 steps to gamify your loyalty program to appeal to your customers (or employees!). 

  1. Figure out what behavior you’re hoping to inspire. Do you want to get people talking about your business or do you want your current customers to stay loyal to your brand?
  2. Map out your “storyline.” What’s the structure? Is there an “end prize” or will they gain prizes along the way?
  3. Keep customers aware of their own (and each other’s) progress. In gaming, people enjoy knowing where they stand. How far away are they from their next prize?
  4. Use social media to your advantage. Promote your loyalty program and spread the word.
  5. Optimize your loyalty program for mobile. Digital apps are fun and easy to use. Make your loyalty program accessible anytime, anywhere.

In following these steps, your gamified system can work wonders when it comes to your brand engagement and customer retention. Keep in mind that creativity is key. 

Annex Cloud, a Customer Marketing Platform

Annex Cloud has been chosen by Iterate as a PilotPass partner. Many of our members use it, so we can speak on its value. Annex Cloud combines customer loyalty, referral marketing, and user generated content solutions to help customers build connections to the brand. In addition, they can help you to implement a gamification feature to take your loyalty programs to the next level. If you’d like to read more and see what else Annex Cloud has to offer, please check it out here

Next Steps

We hope that this article reveals the importance of loyalty programs and offers insight into ways to keep your programs future-forward. If you’re interested in trying out a personalized session on how your business can utilize loyalty programs and gamification to connect with your consumers and employees, please contact us here. 


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