If you were asked to define the term “gamification,” would you be able to? Chances are that even if you couldn’t, you’ve heard the word used at least a couple times in recent memory. Gamification is an exciting trend that is quickly becoming the focus of many conversations about rewards and retention marketing, and for good reason! Gamification seems to be everywhere, with an increasing number of rewards programs incorporating it into their structure and reaping the benefits it offers.
But what does gamification mean? Going back to our original question, how do you define “gamification?” Rajat Paharia, author of Loyalty 3.0, describes it as:
The process of taking something that already exists – a website, an enterprise application, an online community – and integrating game mechanics into it to motivate participation, engagement, and loyalty.
Rajat Paharia (Loyalty 3.0)
In other words, gamification isn’t about building something new, but rather amplifying something that already works by applying data-driven engagement techniques to motivate users and create value.
When we think about it this way, the mechanics that drive gamification sound an awful lot like the same ones that enhance VIP reward tiers. Leveraging customer motivations like status and achievement, VIP tiers are a proven way to boost program engagement and increase success. As a result, they’re the perfect vehicle for incorporating gamification into your business model.
Why Gamification is the Perfect Fit for VIP Tiers
A typical VIP rewards program is looking to achieve one or more of the following goals:
- Increase program enrolment rate (number of signups)
- Increase sales and revenue with repeat purchases
- Encourage customer commitment with status and achievement rewards
- Develop more brand advocates who become powerful marketers
With VIP tiers, you can get customers to perform profitable actions by incentivizing them with both tangible and intangible rewards. These rewards are so effective because they leverage three key psychological factors that govern both gamification and rewards.
Using Scarcity to Build Valuable Status
Scarcity is the secret weapon of gamification and, by extension, VIP tiers. People always want something that’s rare or uncommon, making a tiered program’s upper status highly desirable for all types of customers.
When you structure your program’s highest tier to include the least amount of customers you get to take advantage of the Local Ladder Effect, which influences people’s desire to know where they stand in relation to their peers. If they know they’re lower on the VIP ladder, they’ll be motivated to do whatever it takes to reach that higher status - especially if it comes with exclusive rewards, additional benefits, and one-of-a-kind experiences. If they’re on the high end, they’ll be motivated to retain that status.
The idea of status-based motivation is one of the key mechanics behind gamification. Think about any of the video or computer games you might have played - most of them have some sort of leaderboard or scorekeeping system. In the context of a rewards program, your highest tier becomes the top of the metaphorical leaderboard, letting customers identify their status within your brand community and track their progress as they improve. With this transparent information, customers become increasingly motivated to do one of three things:
- Increase their “lead” over others
- Maintain their current status
- Chase victory to attain the highest status
Regardless of where any given customer finds themselves, they’re met with a challenge to keep striving for the top, which boosts program engagement and participation rates. This prestige power is one of the mechanics that makes video games so addicting, and can quickly have your customers showing the same kind of commitment to your program.
Encouraging Consistency with Level Systems
The concept of scarcity creating value plays directly into the second psychological principle of gamification: consistency. In general, people work very hard to present a consistent image of themselves because change is often perceived as negative. Whether it’s a comment on our weight or discussion of a new fashion choice, it’s very disheartening to know that the image we built for ourselves has changed.
As a result, customers who are promoted to VIPs are going to want to stay that way for fear of risking a change in the way they’re perceived by others.
This group of “others” also includes the brand they’re engaged with. If they know they’re seen as being the “best” or most valuable customers, they’re going to be more invested in the brand and their identity within it. These factors make consistency a very easy principle to capitalize with gamification.
Now you may be wondering how gamification encourages consistency. After all, the scarcity principle demonstrates that gamification is often about upward progression - a fact that should inherently change the way they’re perceived in your program’s structure, right?
While this is true, you can combine the powers of scarcity and consistency by making use of program “levels.” Similar to adventure games like Super Mario Bros or Mega Man, you can treat each of your program’s tiers as levels shoppers can “unlock” by completing a variety of valuable actions. This type of progression will set customers up to continue seeking the positive emotion associated with unlocking your highest VIP status, playing to their desire for consistency.
This combination of upward progression and consistency make levels extremely effective. Customers are able to establish a consistent identity for themselves in each level but are still challenged to move up. When they do, they are able to find a new consistency that keeps them motivated until their next progression. This keeps customers from wildly swinging from tier to tier, and ensures they always feel like they belong in the group they’re in.
Making Consensus Visual
When our peers agree, we’re more likely to subscribe to a similar line of thinking. This is known as the consensus principle, or groupthink - a psychological effect that is extremely impactful in the world of ecommerce. User-generated content (like customer reviews and social sharing) are becoming extremely important to many brands’ acquisition strategies, and can be used to motivate all sorts of customer behaviors.
In the case of your VIP program, this is extremely helpful. Today’s customer loves to share their experiences and today’s technology gives them all the tools to do just that - especially if something good happened to them! As customers are inducted to your highest VIP tier, they’ll want to share about their achievement with their friends and family. When others start to see others in their circle sharing about your VIP status, they’ll trust that this is a goal they should be pursuing, too!
Programs like Sephora’s VIB Rouge and Starbucks’ Starbucks Rewards are great examples of visual consensus at work. Just search for #VIBRouge or #starbucksgoldcard on Twitter or Instagram to see the power of consensus in action, as customers all over the world share the joy of finally receiving elite rewards membership!
As you can see, visual platforms like Instagram are extremely desirable for customers looking to share their VIP success. Not only is it easy to digest, but it’s also indisputable, shareable likeable evidence of their accomplishments. These user-generated pieces of content become the rewards counterpart to the badges and awards used to identify top performers in a video game. While they might not function the exact same way, they do both serve to separate their best customers from the rest, identifying them in highly visible, public ways.
How to Incorporate Gamification Mechanics Into a VIP Loyalty Program
Now that we know why gamification and VIP tiers work so well together, it’s time to get these different mechanics incorporated into your own VIP rewards program. While there are a number of different ways of doing it, we’re going to focus on three quick and easy ways that can unlock the benefits of gamification in your VIP program.
Improve Enrolment with an Explainer Page
As we mentioned earlier, improving enrolment rates is a primary goal for many VIP programs. Upfront, this might seem like a really difficult or expensive task - how can you start encouraging more customers to enroll without increasing your acquisition spend?
If you find yourself asking this question, remember that your VIP program is part of a larger retention strategy! As a result, you’ll be happy to discover that there’s no need to reassess your budget. Instead, all you need to do is clearly outline your program’s benefits with a well-designed VIP explainer page. This explainer page is similar to a game manual that gets customers excited to play - by providing them with the guidelines they need to get started, they’re better equipped to succeed.
Your explainer page should be focused on educating your customers on the benefits of your VIP program, how to join, and how to interact with it. This would include a clear illustration of the different levels, how to move from one to the next, and what is unlocked in each tier. Customers should be able to understand how your tiers work at a glance, so make this page highly visual!
oVertone does this extremely well with their Color Club Rewards page. Using simple, branded icons and clear copy, the hair care brand is able to easily show customers what each of the tiers are, how much you need to spend to reach each level, and what you can do to move from one level to the next. In addition, they’ve clearly outlined which benefits are available at each level, making each subsequent tier more valuable than the last with additional perks and rewards.
Each of these pieces of information are what will motivate your customers to seek each successive status and maintain them over a longer period of time. With a clear idea of what they’re missing out on by not being in the higher tiers, your explainer page will help you boost your program’s scarcity effect and promote an elite sense of status your customers will be dying to get their hands on.
Prompt Repeat Purchases with Easy to Measure Progress
A VIP program is only truly effective if customers are motivated to spend more or spend more often to reach higher and higher tiers. This is why increasing repeat sales is often cited as a program’s number one goal. The trick, of course, is getting customers to commit to making ongoing purchases with your store.
This is where the consistency principle of gamification comes in. Since your program members will want to maintain their VIP status, they will be more willing to make purchases at your store than first-time visitors. However, don’t take this desire for granted! Goals are always more motivating if you can see and track your progress. That’s why many health and fitness apps visually track results like weight loss, run speed, or miles walked.
In your VIP loyalty program, customers are much more likely to pursue and maintain higher tier status if they can see both where they currently stand and how much further they need to go.
A visual progress bar is a highly effective way of communicating this information. Natural Home has done a beautiful job of customizing their rewards modal (built with the help of Smile.io) to reflect both their brand and how close each customer is to their next reward. These visual cues help root each shopper in the brand experience, keeping them focused on reaching their next goal.
Having a customer’s program status so close at hand helps invest them even deeper into your brand and how they see themselves in relation to it. By keeping their elite status readily available, customers will be reminded of the value they stand to lose (and gain) by completing valuable actions, increasing your engagement and repeat purchases at the same time.
Encourage Brand Advocacy with Social Cues
The last - but certainly not least - way that you can incorporate gamification into your VIP program is with social rewards.
We’ve already talked about how much people like to share their achievements online, and if your top tier feels exclusive they will most definitely want to brag about that achievement. So give them an outlet! Reward your customers for following your brand on Instagram, sharing your store on Twitter, or leaving a product review. Each of these actions help contribute to the brand identity you’re building online and provide valuable social proof that can mean the difference between new customers checking out your store or passing it by.
Skullsplitter Dice has done a beautiful job of giving their customers ample opportunity to become brand advocates. From Likes to Follows to Shares, their program’s “Quests” cover every area of the social spectrum, giving customers a number of ways to spread their marketing reach and brag about the Gold Pieces they’ve earned as a member.
Making it easy for your members to contribute to the social conversation around your brand will move you closer to achieving your brand ambassador goals. With an expanded marketing reach, your brand’s social proof will increase exponentially and your program will continue to grow - all without increasing your ad spend.
Gaming the VIP System with Gamification
Gamification is an incredibly powerful tool if you understand the rules of the game. By leveraging your program’s goals and the psychological factors behind them, you can use gamification to improve your repeat purchase rate, increase your program enrolment rate, and develop impactful brand advocates that take your program to the next level.
With a professional explainer page, progress bar, and social rewards, your VIP program can go from barely surviving to outstandingly thriving - all it takes is a little gamification. Customer loyalty isn’t a game, but that doesn’t mean you can’t win.