As someone deeply immersed in consumer psychology and crafting customer-centric strategies, I've realized that gamification extends far beyond superficial game mechanics like quests and leaderboards. And the misconception that it's all about spin-the-wheel or scratch cards to meet business goals only skims the surface of the concept.
As a child, I was obsessed with Nintendo’s Mario Brothers video game. As an adult, I am intrigued by the complexity within the simplicity of The Legend of Zelda: Breath of the Wild game. As a loyalty marketing strategist, consumer psychology major, and an occasional gamer, the perspective changes and I see the opportunity to harness the addictive engagement these games foster and apply similar principles to create compelling loyalty programs. The essence of what makes these games so captivating — their ability to hook players with a perfect blend of challenge and reward, as well as the engaging narrative that propels the adventure forward. These can be effectively translated into gamification strategies for loyalty programs.
Firstly, what are gamification strategies in the context of games? Here are 2 examples to explain gamification concepts.
Mario Brothers: Was its success merely due to being a well-designed simple game, or was there more at play? Indeed, the game’s allure can be attributed to its clever use of gamification concepts that deeply motivated players. It incorporated elements like instant feedback through points and sounds (Let’s face it, we all remember the music!), clear goals for each level, and escalating challenges that aligned with player skills. The rewards system, with its coins, power-ups, and extra lives, tapped into players' intrinsic motivations for achievement and progression, while its design promoted exploration and discovery, enhancing a sense of autonomy and curiosity. These strategies not only made Mario Brothers engaging but also encouraged players to return, showcasing the power of effective gamification.
The Legend of Zelda: Breath of the Wild game: The game masterfully incorporates a variety of gamification strategies that engage players on a deep psychological level. The game uses an open-world design that encourages exploration and discovery, tapping into the intrinsic motivations of curiosity and autonomy. This freedom allows players to interact with the game environment in countless ways, fostering a sense of empowerment and creativity. Strategic use of quests and mini-goals provides clear, achievable milestones that address the need for achievement and development, maintaining engagement through a constant sense of progression. The game also leverages the psychological concept of variable rewards; the random nature of discoveries and loot drops stimulates the player’s curiosity and prolongs interest. Additionally, Breath of the Wild's story and characters create a narrative that players care about, which satisfies the human desire for relatedness and connection, further enhancing the emotional investment in the game. This holistic integration of gamification strategies ensures that players are not only entertained but deeply engaged with the game’s world, making it a compelling and immersive experience.
Gamification is about more than just making tasks fun: it involves creating systems that engage people by tapping into their core motivations. This method is rooted in consumer psychology, which helps us understand why people behave in certain ways — whether it’s the drive for achievement, the need for social interaction, or the fear of missing out. By recognizing these psychological triggers, we can design gamification strategies that effectively harness both intrinsic and extrinsic motivators. Fundamentally, gamification is about creating engagement mechanics that function in cyclical loops – triggers, actions, and rewards – these cyclical loops are strategically constructed to steadily migrate customers up the loyalty value chain.
To design gamification mechanics aimed at advancing customers along the loyalty value chain, the focus often leans towards the brand's objectives, such as gathering first-party data or increasing average order frequency or value. However, shifting to a customer-centric rather than brand-centric approach requires a deeper understanding of the psychology that underpins effective gamification, as outlined in Yu-kai Chou’s Octalysis Framework. This framework categorizes human motivation into eight core drives, each contributing to a more engaging and rewarding customer experience. By integrating these motivational drivers into gamification strategies, brands can create a loyalty program that not only aligns with their goals but also deeply resonates with the customers, driving both engagement and loyalty.
Let’s look at the drivers outlined in Yu-kai Chou’s Octalysis Framework along with examples of how brands integrate it into their loyalty programs.
1. Epic Meaning & Calling: Motivating members by connecting them with a larger cause, inspiring participation through purpose and a compelling narrative.
P&G Everyday Rewards (CPG): The program allows members to earn points while simultaneously making a donation to charity, giving consumers a sense of contributing to a greater good with every purchase. This dual benefit not only enhances the shopping experience but also deepens emotional engagement by linking routine actions to impactful, altruistic outcomes.
2. Development & Accomplishment: Providing a sense of progress and achievement, encouraging continued engagement through rewards for milestones.
Nike (Retail & Sports): Nike+ uses fitness goals and challenges that reward users with badges and trophies as they progress, tapping into the user's desire for personal achievement and recognition.
3. Empowerment of Creativity & Feedback: Allowing customers to personalize their experiences and providing feedback that guides their decisions.
Sephora (Beauty & Cosmetics): Beauty Insider members can choose how to spend their accumulated points on a variety of rewards, allowing for personalization and control over the benefits they receive.
4. Ownership & Possession: Giving a tangible sense of ownership over points or virtual goods, enhances the value of customer interactions.
Marriott Bonvoy (Travel & Hospitality) - Marriott Bonvoy's loyalty program effectively leverages the "Ownership & Possession" drive by allowing members to accumulate points through hotel stays, dining, and other experiences. These points can then be redeemed for free nights, room upgrades, and exclusive experiences, giving members a significant sense of ownership over their rewards. This tangible asset encourages continued patronage and deepens loyalty, as members see direct value from their engagement with the brand.
5. Social Influence & Relatedness: Building a community around the brand, creating social ties and fostering relationships among users.
LEGO VIP Program (Retail) - LEGO's VIP loyalty program fosters a sense of community and relatedness by offering members access to exclusive sets, early product releases, and member-only events. The program encourages members to share their creations and participate in community challenges and contests, enhancing engagement and a sense of belonging among LEGO enthusiasts. Members can also earn points not just by purchasing, but by engaging with the community and sharing content, further embedding them into the LEGO culture and connecting them with like-minded fans globally.
6. Scarcity & Impatience: Generating urgency and enhancing engagement through time-limited offers and tasks.
Domino's Pizza (Food & Beverage): Domino's used the gamification strategy of scarcity and impatience through its "Piece of the Pie Rewards" program. Members earned points for each order that could be redeemed for free pizza. However, Domino's occasionally offered limited-time double points events or bonus points for trying new menu items, creating a sense of urgency to order during specific periods. This strategy not only drove sales during promotional times but also encouraged customers to engage regularly with the brand to maximize their rewards.
7. Unpredictability & Curiosity: Keeping engagement alive with unexpected rewards and novel experiences.
Dropbox (Technology & Cloud Storage): Dropbox utilized the gamification strategy of unpredictability and curiosity through its "Dropbox Space Race" and referral programs, where users could earn extra storage space unexpectedly. This included random bonuses for completing certain activities or challenges, and special events where users could gain significantly more space than usual. These surprise elements kept users engaged with the platform, encouraging them to check in often and participate in ongoing promotions to see what new rewards they might unlock.
8. Loss & Avoidance: Encouraging consistent participation by incorporating elements that penalize inactivity or loss of status.
American Airlines AAdvantage (Travel & Hospitality): American Airlines utilizes the gamification strategy of loss and avoidance in its AAdvantage loyalty program by implementing expiration policies on miles. Members must earn or redeem miles at least once every 24 months to keep their account active and prevent mile expiration. This policy motivates members to continuously engage with the airline, either by flying or using an AAdvantage credit card, to maintain their accumulated miles and status benefits, ensuring ongoing loyalty and frequent flyer engagement.
You may have noticed not all the examples above had the quintessential gamification terminologies – Challenges, Streaks, Quests, Boosters, Missions, Milestones, etc. Yes, the terminologies have been inspired by the world of gaming but the strategy behind it is rooted in psychology. At the very core of it, gamification strategies ignite emotions. Emotions that propel behaviour to change. It boils down to human psychology based on theories - Joseph C. Nunes’ and Xavier Dreze’s The Endowed Progress Theory, Clark Hull’s Goal Gradient Effect, Skinner's Conditioning Theory, Deci and Ryan's Self-Determination Theory and so many more. The question is – Are we igniting emotions frequently enough?
At this point, I will reference my previous article, “How the Golden Circle Shapes a Purpose-Driven Program”.
The innermost circle, ‘The Why’ and in our case, ‘The Program Concept’, refers to the narrative of a gamified loyalty program, The Mario Brothers had to save Princess Peach and for a brand, what is the narrative and does it resonate with the essence of your brand’s identity and mission?
The outermost circle, ‘The What’ and in our case, ‘The Program Construct’, refers to all the gamification or loyalty mechanics leveraged to increase the motivation of a member to participate in your program
Lastly, the middle circle - ‘The How’ - and in our case ’The Program Approach’ refers to the way we executive the gamified loyalty program. This is where the magic lies. Or might I say – this is the game-changer!
When reflecting on the effectiveness of our existing gamification mechanics, the essential question I often pose is: Are we achieving the desired business outcomes from our gamification strategies? If not, how do we maximize performance outcomes? This is where the ‘Program Approach’ or ‘The How’ will make all the difference – It is the key that connects ‘The Program Concept’ to ‘The Program Construct’.
In my view, integrating Machine Learning (ML), Artificial Intelligence (AI), and LiveOps into our gamification frameworks can profoundly transform the way we engage with our customers. ML algorithms excel at learning from vast amounts of data from user interactions, user behaviours, purchases and more over time. This eventually helps in predicting customer behaviour. AI complements this with personalized member experiences, recommendations, challenges or rewards, as well as creating meaningful interactions through natural language processing. This enables gamification systems to dynamically adjust challenges and rewards tailored to individual preferences, enhancing the personal relevance of each interaction. Meanwhile, LiveOps contributes to this dynamic environment by allowing for the real-time management and adjustment of gamification features, ensuring that content remains fresh, engaging, and aligned to specific customer segments. Together, these technologies foster a responsive, real-time, interactive platform where gamification becomes more than just a static experience, evolving into an engaging journey that continuously stimulates and retains customer interest.
In summary, gamification is far more than a buzzword; it’s a potent, strategic approach that transforms customer interactions into opportunities for deeper engagement and loyalty. By tapping into both intrinsic and extrinsic motivations and enhancing them with cutting-edge technology, we can create experiences that are not only rewarding but inherently enjoyable. This holistic approach is what makes gamification a key player in the future of customer engagement, driving loyalty and business success.
Written By Mrinalini Chowdhary
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