Online Marketing: Loyalty Games?
Gamification is generating plenty of buzz right now. But with so much hype in the headlines, it's no surprise many marketers remain uncertain about exactly what gamification is and how they can use it to help improve their marketing campaigns. To help clear up the confusion, here are the fundamentals of gamification and an explanation why it can significantly improve your online marketing campaigns.
First, it's important to understand this: Gamification is not about games. Granted, when individuals interact with a gamified experience, they might be exposed to things like badges, points, levels and leaderboards. They might be rewarded for completing certain tasks, and they might even accumulate enough points to earn special perks, discounts, etc.
But these "trappings" don't define gamification. The definition of gamification is much more straightforward—it's simply about motivating people through data.
To put it in marketing terms, gamification engines capture the data your customers generate as they interact with you online and use that data to motivate high-value interactions that drive more sales, nurture loyalty and improve the customer experience.
It's Not About Games
Analysts estimate customer acquisition already costs four- to six-times more than customer retention—and the gap is bound to grow in the years ahead (opens as a PDF).
To be successful, marketers need to engage customers, retain their interest and drive true loyalty. But significant challenges stand in your way.
It's time to update traditional marketing strategies and push forward to a new generation of loyalty. Technological advances enable what we call "Loyalty 3.0," a way to drive deeper, ongoing relationships with your customers. Loyalty 3.0 requires three essential components: motivation, Big Data and gamification. By combining these three components, companies can nurture customer relationships, reward high-value interactions and ultimately drive more revenue for the business.
How Gamification Works
Entertainment companies like USA Network have been pioneers in this space. USA Network knew its detective comedy/drama "Psych" had a young, loyal fanbase active online. So the network amped-up engagement by creating "Club Psych," a digital loyalty program that spanned all of their online, as well as on-air content. Fans were encouraged to consume, create and share content, as well as compete and collaborate with fellow fans—and, all the while, the data stream was captured and analyzed to inform even higher levels of engagement. Viewership across all the content soared. Within one year, website traffic increased by 30 percent.
More and more, consumer brands are using gamification to boost their other marketing initiatives, as well.
In 2011, the consumer food products supplier Chiquita Brands partnered with Twentieth Century Fox Film Corp. to promote the animated movie "Rio" and drive consumer engagement with a variety of Chiquita products. Consumers who logged onto the "Make Your Way to Rio" website could earn their banana sticker "badges" by accomplishing goals, such as watching movie clips, sharing recipes, playing games and reviewing product information. Most important of all, the badges were a key component in driving participation in the "Make Your Way to Rio" Sweepstakes. During this marketing campaign, the "Make Your Way to Rio" website received more than 1 million pageviews and had 800,000 unique site visits and 5.6 million word-of-mouth impressions. What's more, Chiquita now better understands the types of content its customers prefer, when and how they like to interact and which marketing messages resonate—and the company significantly increased the size of its marketing database, too.
Kraft Canada created the "First Taste" program to enable its fans to interact with each other while also enjoying exclusive, early access to new recipes, products and ideas from Kraft experts. Members earned points for trying and rating products, making and bookmarking recipes, writing and commenting on blogs and sharing with other members, friends and family on social networks and by email. The points were then redeemable for product coupons, kitchen gear and designs to customize members' pages. With "First Taste," Kraft engaged fans in a community where it could solicit their real-time opinions on both existing products and new concepts.
As these examples from USA Network, Chiquita Brands and Kraft Canada—and scores of others—show, today's customers want meaningful brand interactions that lead to personalized incentives based on what they value. Once you incorporate gamification, you'll find you can actually influence online conversations, reward high-value interactions and ultimately, drive sales and more revenue for your business.
Rajat Paharia is founder and chief product officer at Redwood City, Calif.-based gamification platform provider Bunchball. Reach him at email@example.com. Download the first chapter of "Loyalty 3.0" for free at Loyalty30.com.