To get an overview of the task of gamification for customer retention, let’s take a closer look at what customer retention is all about.
Excerpt on the topic of customer loyalty on Wikipedia:
In addition to measures that serve customer satisfaction and loyalty and go beyond mere customer orientation, most business forms have programs for customer retention, i.e. for winning regular customers from walk-in customers. Traditional customer loyalty initiatives such as bonus and points programs are today supplemented and in some cases even replaced by psychologically based customer relationship management. Psychological customer loyalty measures are proving to be an effective and more customer-oriented way of retaining customers today, in which classic bonus programs will only play a subordinate role in the future. Because people per se do not (or only to a limited extent) act and decide rationally, pricing policy is to be evaluated as a long-term, inefficient means of customer retention.
Can Gamification help with customer retention?
Definitely yes. Gamification is just such a psychological measure. But let’s start today.
If customer retention is carried out with the help of a classic point program, the following problem exists in the meantime:
- Every company can now offer such programs. Service providers like Payback, and others, make it relatively easy to become a partner of such a program. Accordingly, these already exist like sand at the sea. A unique selling proposition looks different.
- Rewards, and that’s all that such point programs offer, have the tendency to lose their effect. We humans quickly get used to new or exciting things and thus possible gifts that we can get thanks to the points we have exchanged also quickly lose their fascinating effect. Apart from the fact that we now get points at every corner (see point 1).
As a consequence, possible rewards have to become bigger and bigger and more exciting. This creates an upward cost spiral for the company that awards points. Not a nice and long-term outlook.
How can gamification for customer retention help?
Gamification is based on the same elements of success that make activities such as games, sports and hobbies so fascinating for people. And one thing can be said for sure: Loyalty, commitment and interaction are challenges that are very well mastered by games, sports and hobbies. That’s where marketing gets quite nervous…
The correct implementation of gamification is not a simple checklist and not a fire-and-forget approach. But there are a few basic mechanisms that can be followed:
In the game, humans face a challenge. Only if he masters it, he advances and now (as a reward) faces another challenge. He thus experiences first-hand how the game offers him the right conditions to become better. The knowledge of this learning experience and that it is the game that enables him to do so is responsible for a strong bond between player and game: the beginning of a wonderful friendship?!
Any progress requires a personal commitment. It is this personal commitment that is important to us humans. Something gets our own handwriting (so it must be good). This is also called the Ikea effect. For those who want to know more, here is the video of Dan Ariely, a professor of behavioural economics.
These two points alone, progress & commitment, can create a much stronger and more lasting bond between customers and companies than any points program.
And we haven’t even really started to go into depth when it comes to game principles. Mechanisms such as story, missions, goals, milestones, or dynamics such as collaboration, competition, or framework conditions such as interactivity, immersion, exploration, and much more, offer the possibilities for complex approaches.
In the end, it means one thing in any case: It’s going in exactly the opposite direction to what marketing is currently tackling. Instead of making it easier and easier for customers to be rewarded and thus making interaction more and more superficial, Gamification is back to depth and connectedness.
From experience, industries that deal with either high-end or luxury products are particularly suitable here, but also entire industries such as tourism, sports, and many more. Especially for the car brands I see a huge potential here, as it is a product that can be emotionally charged very well. This is where Gamification can show its full potential.
Any questions, suggestions or examples? Please write to us.