Gamification - what loyalty programmes should have been delivering?

The gamification of everything is afoot. Gamification (also known as Funware) is about integrating game mechanics, such as say leader-boards, into non-game environments such as marketing campaigns and health care.

Gamification definition care of Strategic Synergy

The movement is largely lead by professional game designers from the video and online games industries. One of the first industries they've latched onto as examples of games outside of the video game industry are loyalty programmes. These programmes have "points" to keep score with, members can "level up" to more exclusive tiers and pick up "powers" such as airline lounge access while redeeming for rewards along the way.

Gabe Zichermann's view on loyalty systems

But according to these game designers - loyalty and frequent flyer programmes are not always particularly well designed games. They don't do a good job of engaging members on the journey towards redeeming a reward. Gabe Zichermann is one of gamification's leading gurus and he proposes a fifth P be added to the marketing mix - Pleasure. He describes marketing's task today as "creating a long-term engagement with the consumer that moves them along what we call, ‘the player journey’ – the long-term emotional engagement of the user with the brand.”

In Zichermann's motivational hierarchy gamers are after four things in decreasing order of importance and notably for programme operators, increasing order of cost to the provider:

1. Status
2. Access
3. Power
4. Stuff

Status, access and power are areas that frequent flyer programmes excel in. Higher status members can clearly be seen accessing the faster queues, priority check-in and better lounges. Status is only status if it's visible to others. At the same time - most airline frequent flyer programmes offer only elite status and "leveling up" for their very top members. If they were to offer a member early and multiple opportunities to climb through status tiers, they'd be more like games and, according to Zichermann, more engaging.

Stuff in all loyalty programmes are the rewards offered in exchange for points which have a hard cost to the loyalty programme provider. Stuff though is only accessed at the end of the loyalty cycle after much accrual and its impact is trumped by status, access and power.

It's hard to imagine a loyalty programme that reduced the value of the stuff on offer in exchange for more status but one has just launched in the hotel sector. The Global Hotel Alliance is offering a loyalty programme without points but with very clear status, access and power. They have Gold (1 night stay), Platinum (10 nights) and Black (30 nights) tiers to enable early and easy leveling up. Each tier provides progressively better access from free internet at 1 night to surf lessons or helicopter tours for Black.

A well gamified loyalty programme would become a reward in itself. According to Zichermann "It’s the system that’s engaging, not the reward” he says. “That’s what game designers know really well, and this is what gamification is unveiling to the marketing world.”

1 COMMENTS:

Jeremy Sweetman said...

Thank you Simon for your informative article.

Coming from a long heritage of digital communications and (more recently) game design, I'm excited to see the evolution of gamifying one's brand becoming popularized within the media.

As a practitioner, I was lucky enough to attend one of Gabe Zichermann's talks recently and, unquestionably, the concept of gamification couldn't ask for a better advocate. Obviously Gabe isn't alone in his promotion; personalities from both gaming & marketing circles are starting to validate the process of gamifying both brands and experiences.

Honestly, as marketing professionals, the concept of changing (customer) behaviour through 'fun' activity is not new, although despite 'The Horizon Report - 2011' predicting 2-3 years before the concept becomes mainstream thinking (particularly in education), I believe pioneering in this area will ultimately return significant gains and deliver better experiences all round.

Simon, as a leading practitioner within your field, I'm curious how you would evaluate whether brands would be suitable candidates for a gamified experience - beyond the currently accepted loyalty paradigm?

In addition, I'm conscious that circumstances could exist where a gamified experience could ultimately over-shadow the value of the 'thing' being sold e.g. Jet Blue and (in my opinion) Nike+. Hence are interested on your thoughts surrounding this potential scenario?

Thanks in advance for your insight.

Jeremy Sweetman

MARCH 17, 2011 4:47 PM