Gamification in Loyalty Programs: Top examples to Learn From

In an incredibly competitive marketplace, a well-thought-out loyalty program is not just a perk but an essential tool for building customer trust and loyalty. As businesses compete for the consumers’ attention, the challenge lies in not only attracting but also retaining customers. Traditional loyalty programs, while useful, often lack the engagement factor that keeps customers interested. This is where gamification comes into play. By incorporating game-like features, you can captivate customer attention more effectively. This strategy not only encourages repeat business but also improves the overall customer experience. After all, the allure of games lies in their ability to offer fun and interactive experiences – a quality that can transform the way customers perceive and interact with loyalty programs.

Here's what we are going to cover:

1. Gamification and Loyalty
2. Gamification in Loyalty Programs: Examples

Gamification and Loyalty

When I was a kid, the SEGA Genesis and PS1 represented the pinnacle of entertainment. This was because they offered something entirely unique. They transported you to another reality. These consoles allowed you to control characters on the screen and challenge the “computer” or play with your friends and family. What’s more, these consoles had an array of amazing games. I still remember playing Metal Gear Solid and Twisted Metal 2 on the PS1, as well as Mortal Kombat on the SEGA Genesis. Those were the days.

So, why do people love games? The answer is simple: they are fun and engaging. Games excite people and stimulate all the right areas of the brain. Therefore, it's not surprising that businesses incorporate game-like features into their marketing strategies. 

Using gamification techniques in marketing can result in a 48% increase in customer engagement, and in some cases, it can even double. 

Good amusement and a well-deserved reward are two things that everyone enjoys. 

Gamification in customer loyalty programs works by adding game-like elements to the shopping experience to make it more engaging and fun for customers. 

Businesses that have implemented gamified loyalty programs observe a 22% improvement in retaining their customers and a 15% rise in brand awareness. 

Think of gamification as transforming shopping into a mini adventure or a fun quest. For example, customers may receive points from a store for each purchase they make. This can be similar to earning points in a game. These points can then be used for discounts or special offers, much like leveling up in a game to unlock new rewards. 

Furthermore, companies may set tasks or objectives for their customers, like “purchase three products from this category and earn extra points” which adds an element of strategy and achievement. Some programs also use leaderboards, badges, friend referral challenges, or quizzes to foster a sense of competition and accomplishment. 

The goal of all this is to make the shopping experience more enjoyable, encouraging customers to keep coming back, much like players returning to their favorite game to beat their high score or complete the next level. This way, shopping isn’t just about buying necessities - it’s also about having fun and earning rewards along the way. 

Gamification in Loyalty Programs: Examples

Gamified loyalty programs are transforming shopping into an engaging and enjoyable experience. Here's a glimpse into how these strategies not only enhance customer involvement but also significantly boost retention:

01. Xbox Rewards

It's no surprise that Xbox is on our list of the best examples of gamified loyalty programs. Xbox serves as an exemplary case of gamification within a loyalty scheme. Xbox Rewards is part of the larger Microsoft Rewards Program. By encouraging users to interact with other Microsoft services and products, this integration broadens the ecosystem within which users can earn and spend points. Xbox gamified loyalty programs motivate players to gain rewards through accomplishing different challenges within the game, making purchases in the Xbox Store, taking part in surveys and quizzes, and engaging in other gaming-related activities. This clear connection between gaming behavior and rewards creates a sense of achievement and encourages continued participation. Points can be redeemed for various rewards, including Xbox gift cards, game passes, sweepstakes entries, and even donations to causes. This variety caters to different user preferences, making the program appealing to a broader audience. 

These programs work because they appeal to people’s innate drive for advancement, success, and rewards. By gamifying their experience, users feel more motivated to engage with their Xbox and its content, as they can see tangible rewards for their actions. This not only increases customer loyalty but also boosts sales and time spent on the platform.

02. Sephora

With stores all over the globe, Sephora has become one of the biggest beauty retailers from its humble beginnings as a French perfume shop. The well-known beauty and cosmetics retailer has integrated elements of gamification into their loyalty program. Sephora offers various quizzes on its website and mobile app. Quizzes are an effective method to personalize the shopping experience for your customers, and they also serve as a fun and engaging way to reward them. These quizzes are usually about beauty products, skincare routines, or makeup preferences. For example, a quiz might help you find the right foundation shade or recommend skincare products based on your skin type. The results from these quizzes help personalize product recommendations. This makes the shopping experience more tailored to individual preferences and needs, increasing customer satisfaction. 

By taking these quizzes, you can frequently earn rewards from Sephora's Beauty Insider Program. Members can earn points for taking quizzes, which can then be redeemed for rewards like product samples, special discounts, or exclusive experiences.

Sephora's quizzes are an interactive way to engage customers, offering personalized recommendations and integrating with their loyalty program to enhance the shopping experience through gamification.

In 2023, the company introduced “Beauty Insider Challenges,” a new approach to the program that incorporates gamification elements. This feature offers exciting “challenges” or enjoyable quests for members to earn extra points. These activities include both online and offline tasks, and not all of them require purchases. 

03. Simply Be Perks

Online fashion retailer Simply Be specializes in plus-size women's clothing. Promoting body positivity, they celebrate women for everything that makes them unique. Their rewards program, known as “Simply Be Perks,” is designed to make shopping both engaging and enjoyable. They motivate members to share photos of themselves dressed in their preferred outfits or reveal the contents of their monthly gift box on social media in exchange for points. 

They’ve developed a program tailored to the needs of their loyal customers. By incorporating gamification elements such as contests, social sharing, and friend referrals into the program, they have been able to engage and retain their customers more effectively.

04. Victoria’s Secret PINK REWARDS

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Victoria’s Secret PINK REWARDS is a good example of effective gamification in a loyalty program. They developed a separate app for its loyalty program. This gamification rewards program effectively engages customers through interactive and rewarding experiences. 

The program has 3 tiered levels: Member, Silver, Gold. Higher tiers give more exclusive benefits, and the tiers are determined by annual expenditure amounts. When a customer joins, they are immediately put into the Member tier. The Silver Tier requires an annual spend of $300, while the Gold tier requires $750. With each purchase, members earn points. If a customer uses the Victoria’s Secret Credit Card, they can earn points more quickly. For example, Gold level card holders earn 15 points for every dollar spent. What’s more, the app allows them to collect valuable customer data and increase website traffic. 

For those managing a Shopify store and looking to delve into the dynamic world of gamified loyalty programs, tools like Growave offer a compelling solution. With its seamless integration into the Shopify platform, Growave increases customer engagement through customizable rewards, interactive challenges, and a sophisticated tiered program. This system rewards customers based on their level of engagement, which adds a sense of excitement and exclusivity. By incorporating these features, Growave adeptly brings the principles of gamification to life in loyalty programs, encouraging repeat business and fostering a sense of community around a brand, all while making the customer experience enjoyable and interactive.

05. KFC REWARDS ARCADE

In the UK, KFC has introduced the KFC Rewards Arcade, offering customers an equal opportunity to win free KFC menu items. This is one of the best gamification loyalty program examples. The KFC Rewards loyalty program exemplifies the transformative power of gamification, turning an ordinary dining experience into an enthralling journey. 

Indeed, gamification in loyalty programs, like KFC's Rewards Arcade, represents a modern shift in customer engagement. By offering instant rewards and interactive experiences, these programs not only meet evolving customer expectations but also create a unique brand identity, standing out in a competitive market. 

To get started, you need to download the KFC App and sign up. When purchasing KFC food at the front counter, kiosk, drive-thru, online, or through the KFC Delivery on the KFC app, users should ensure to scan the QR code on their app to receive an invitation to play. 

In the UK, customers who spend over £3, will be invited to participate in a game. This invitation will be sent via a push notification to those who have consented to receive it, or it will appear on the homepage of the KFC App.

KFC has truly nailed it with its innovative KFC Rewards Arcade. The app has gained remarkable popularity among customers, thanks to its gamified loyalty experience that encourages repeat visits. 

06. adiClub

Everyone knows the three stripes of Adidas. The universally recognized brand requires no introduction. Adidas offers a loyalty program known as adiClub, where members can accumulate points, advance through different levels, and gain access to unique rewards, special promotions, events, and additional exclusive benefits.  

adiClub uses a points-based system, where members earn points for various activities such as purchases, product reviews, and physical activities. This is a traditional gamification technique, similar to earning points or scores in a game. 

Adidas places significant importance on environmental, social, and governance(ESG) initiatives and motivates its loyal customers to engage in mutually beneficial activities. For example, adiClub includes game-like elements in its activities to help environmental efforts. One example is the "Run for the Oceans" campaign. The challenge involved people running for a certain number of minutes. In return, Adidas cleaned up beaches and coastal areas around the world. Now the event is over but their journey to end plastic waste isn’t.

Shared values play a key role in fostering long-term relationships between a brand and its customers. Because loyalty programs are more than just a tool for customer retention and engagement. They also serve as a testament to the brand's commitment to these shared values and sustainable practices. 

In addition to that, adiClub is a four-tiered loyalty program. Members can progress through 4 different levels based on the points they accumulate. Each level offers increased benefits, creating a sense of progression similar to leveling up in a game. The ability to redeem points for rewards, exclusive products, and experiences adds an element of reward-based motivation, encouraging continued engagement and participation. 

This gamified loyalty program encourages members to engage in various activities, both online (like shopping and reviewing) and offline (like running and training). 

Conclusion

Customer engagement tactics have evolved significantly with the introduction of gamification into loyalty programs. This article has highlighted how adding game-like elements to loyalty programs not only engages customers but also enriches their overall experience with the brand. The examples of successful gamified loyalty programs show their effectiveness in building interactive and strong relationships between businesses and customers.  

Gamification in loyalty programs is more than just a marketing tactic, they are an effective approach to cultivating lasting customer connections. They transform traditional loyalty programs into engaging experiences that resonate deeply with your customers. As this trend continues to grow, companies that use these creative strategies are likely to gain increased customer loyalty and will stand out in a crowded market.