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The convergence of Loyalty Marketing and Gamification

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The convergence of Loyalty Marketing and Gamification
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I’m thinking a lot about where the convergence between Loyalty Marketing and Gamification will have the most impact for marketers. My participation as a judge in the LoyaltyGames has me focused on this subject, as did my presentation last month at Gabe Zichermann’s GSummit. My topic was titled “Beyond the transaction, Could Loyalty’s next act be Gamification?”

The format was Ted-like in that presenters had a tightly defined 21 minutes to present, with Q&A deferred to networking sessions throughout the day. Attendees to the event remained highly engaged as the steady turnover of presenters with fresh material kept everyone’s attention. Here’s a link to the conference video site if you want a first hand view of the GSummit, an event that I’m sure to include in my 2015 calendar and suggest that you should too.

I set out to take attendees on an adventure, to play a collaborative game. Call it the Clue version of “Loyalty Marketing”. You might remember Clue, the old school murder mystery board game. Well, it has been refreshed and relaunched, now carrying the persona of “the mystery you love to solve again and again…only now its more intense”!!!

That’s about where the state of Loyalty Marketing sits today. It’s a familiar game, but it’s still a mystery to some people. There are widely distributed clues and well understood rules of the game, but players tend to arrive at vastly different conclusions after playing for a while.

One Clue that we have is that making loyalty programs more “contextual” could be the key to engaging today’s digitally connected consumer and find renewed success with data-driven marketing. Another is that by blending the study of human behavior with the discipline of behavior psychology, marketers could unlock a new generation of customer marketing strategies.

To release wisdom about the future of loyalty marketing, I asked the group gathered to define their “WorldView” of loyalty marketing. A worldview is defined as the overall perspective from which one sees and interprets the world, formed through a collection of beliefs and experiences. Clearly, each delegate’s worldview of loyalty marketing plays a pivotal role in setting expectations for loyalty marketing programs in the future and framing whether ramification will be central to loyalty’s next act.

If the delegate’s worldview of loyalty is to define the category by the reward programs I would call “One Percenters”, then you might be justly disappointed with the state of the loyalty world today. These programs typically feature an imbalance between reward and recognition with points rewarded for customer purchases, while only cursory effort is made to leverage any data collected to deliver personalized offers or to better understand customer preferences. The earning mechanism in this genre of program fully transparent, many times reducing the impact of the program to just a notch above a punch card program. We concluded that this genre of program should rightfully be defined as rewards programs rather than loyalty programs.

Loyalty programs in their highest form should represent a more complete embodiment of the potential for data-driven marketing. Data should be carefully curated for collection and customers should be able to recognize that the brand sponsor is “listening” to them via the data they have collected. Ultimately this form of customer marketing program should be the result of a well formed customer strategy, with less of a requirement to categorize it as a “loyalty program”.

We talked about the definition of Contextual Loyalty in a recent interview with LoadFactor.tv which you can find here. In the GSummit talk, I mentioned that top brands in the 2014 Brand Keys Customer Loyalty Engagement Index across 13 industry verticals all had some form of explicitly defined and executed customer strategy, highlighting Amazon, Lowe’s, Panera Bread and Caribou Coffee as examples of Contextual Loyalty.

To conclude our game of Loyalty Clue, we asked what is takes to make loyalty programs “Contextual”? I suggested to the group that the first step on this transformational journey was to change the vocabulary we use in describing our objectives with data driven customer marketing. For example, we need to replace last generation words such as target, inform, transact, reward, and recognize with a new set of words that more directly describe what we are hoping to accomplish for and with the customers we address in marketing programs.

Why not consider to engage, encourage, and challenge our customers? Or, we could just tease, surprise, and delight them. We certainly want them to join, to achieve and to journey with our brands. Most importantly, to build the long term loyalty that most set as a holy grail of marketing, we should consider how to honor and respect customers, creating bilateral trust in the relationship.

Discussion of this new vocabulary drew the most interest from attendees of all that we covered. At the end of the collaborative game played at the GSummit, I recommended a self-examination of institutional loyalty marketing worldview as a good place to kickoff a journey of change.

We know that serving our customers is a game that will never end and now is the time to consider how you will incorporate the principles of gamification into the next version of your customer loyalty strategy.

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