Saturday, 28 August 2010

Loyalty Marketing - it's all a game. So play it.

Ted Turner famously said "Life is a game. Money is how we keep score."

How well you play it depends on understanding the rules and Albert Einstein said "You have to learn the rules of the game. And then you have to play better than anyone else."

In marketing it would be true to say "Loyalty is a game. Points are how we keep score."

Points are accumulated - the more points the better the prize. Points don't just mean prizes though, points can earn tiers and these open up additional benefits.

If a loyalty programme was a video game, then tiers would be like a new level - letting you unlock secret rooms like the "airport lounge" or giving you a new weapon such as "priority queuing". The monthly statement would be your end of level score sheet - letting you know how well you did by showing you your current and cumulative score, and on the better programmes, highlighting which puzzles you unlocked in the form of promotions achieved.

However, if loyalty was a game then in the words of Seth Priebatsch from SCVNGER - it would suck.

Seth makes a really interesting and inspirational speech at TEDtalks when he describes building the game layer on the real world - and how loyalty programmes are the forerunners to this.

What really interests me about this as a loyalty marketer is that we've been doing this for a long time - we just haven't recognised it as an industry - and haven't maximised it's benefits.

If you played a video game though which had no real direction, only recognised you when you happened to stumble upon something, had little or no challenges, took 12 months to get to the next level and 18 months before you got a reward - few but the most die-hards would play it.

Yet this is what many loyalty programmes are like.

For example, we know who's playing well. We have people tiered based on their frequency, value and recency. We have them segmented based on the products they buy, the promotions they use, the web pages they visit.

We know everything - and yet we hide it.

Foursquare on the other hand knows when I've visited a venue with a photo-booth 3 times and shouts about it, giving me a reward for it in the form of a badge. It knows if I'm out late, shopping locally or shopping with friends - and rewards me for it. It's a game for me and better still a competition with friends - creating social currency and influence - even if it's just a bit of fun.

When it comes to tiering, we make it very hard for a very small number of people to make it to each tier. This is for good reason as the benefits opened up at each tier cost a lot to fulfil.

However, if you take the monetary value out of a reward/benefit and replace this with social value, then you can emulate games like FarmVille and Mafia Wars which are engaging and influencing over 80m people with 40+ tiers/levels - something I wrote about previously saying:-

[They] create a really well designed journey which drives early engagement, rewards interaction, encourages peer comparison and recognises increased experience.

Adding a gaming layer to loyalty - or at least making the existing game play better - is probably the most important change to loyalty marketing since it moved from paper stamps to computerised points.

This is great for consumers, great for brands and great for loyalty.

Lets play.

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