Gamification & Retention

By AdStation | April 22nd, 2016 | Categories: AdStation

In a world with so many options, retailers and companies are looking for alternative ways to retain their customers. In doing so they are thinking outside the box and combining the fun of gaming with the ability to gain and retain loyal customers.

Retention can be costly, so if a company can keep a customer happy and come back through traditional outlets, that is great but unlikely. A study showed that by increasing customer retention rates by a mere 5%, a business has the potential for increasing its profits between 25% and 95%. But, with so many options for consumers that are getting harder and harder to do.

One of the key components of retention is listening to your customers and giving them what they feel is a good incentive to keep coming back. Whether that is in the form of a loyalty program or discount, customized communication or something entertaining, it is important to make your customers feel important.  That feeling of importance or belonging will foster an ongoing relationship between you, building brand loyalty.

So, what better way to incentivize your customer than introducing gamification? What might that be, you ask? Gamification, in a nutshell, is the introduction “of game-thinking in non-game contexts.”  It’s the process of borrowing pieces of games and applying them to areas of business, allowing one’s competitive nature to thrive.

By introducing games to the consumer cycle, you are adding a non-traditional component to your marketing pyramid.  This, not only makes your company unique, but it allows for your most loyal customers to further increase their engagement with your brand.  This increased engagement will also increase the likelihood of consumer reviews, positive word-of-mouth, and unpaid advertising through social media shares.  All by adding a game.

One example of gamification that has been proven to work is the rewards program through Starbucks. They reward you for purchasing through their app, at their stores, buying products online and/or at your regular grocer.  They get you excited about their brand and engage you on several levels. Add to that the gaming aspect of ‘winning’ free stuff, and you have a marketing campaign that has paid for itself in droves.  And they even market it by stating “Play Starbucks for Life”, and the link is labeled ‘Join to Play’.  Who doesn’t want to play a game?!

Another example is going to the grocery store and being rewarded ‘points’ for buying things you need.  Chains are rewarding your purchasing behavior in various ways, knowing that you have options on where to shop, they are rewarding you for picking their doors to walk through.  Those points can mean dollars off on a future visit or cents off on the gas, but regardless of what it is, you are being rewarded for being a regular customer.  You are a pawn in the marketing chess game and retailers are using incentives to get you in the door and to keep coming back.

Using simple gaming tactics can increase brand loyalty, which increases the bottom line. Companies that are actively engaged with their current clients are increasing that customer’s lifetime value, which is often more profitable than looking and luring in new customers.  As we mentioned, customer acquisition and retention are expensive, so increasing your current customer's loyalty, and therefore return rate is a highly profitable way to do business.