Enhancing a loyalty program with gamification
30 JULY 2014 6:24 AM
Restructuring your loyalty program through the concept of “gamification” might make it addictive to consumers.
The Web and software world has embraced “gamification” during the past few years as websites and mobile apps find ever-craftier ways to incorporate gaming mechanics into their platforms. The goal is simple: heighten consumer interaction by making the platform more exciting. It’s something video games do especially well. By capitalizing upon our desire for instant gratification, these systems can go from amusing to addictive.
When was the last time you heard a loyalty program described as addictive? Certainly, in the hotel industry, probably never. Most of the time, these programs are supplemental to emotional consumer drivers: Guests select a hotel brand with the loyalty program seldom acting as the primary reason for continued brand affinity. In this sense, they are afterthoughts and rarely take center stage with the product.
Part of the problem is that the hotel landscape is saturated with loyalty programs; it’s almost mandatory that every property be affiliated or have its own customer recognition plan. Consumers typically join multiple loyalty programs for each of the brands they regularly shop, which dilutes the significance of any single entity. In doing so, they don’t give much thought to adhering predominately to only one brand.
But what if you could design a loyalty program that was so enticing, it became a talking point on par with the main features and amenities offered by your brand? What if your loyalty program commanded the attention of its users and actually deterred them from looking elsewhere?
When we talk about gamifying a product, part of what’s implied is customization: the ability to modify what each individual receives from loyalty program membership to suit his or her particular needs. One size does not fit all because the services you provide will not be of equal benefit to all members.
Take 24-hour gym facility access to loyalty members as an example. This is a great feature to have, and no doubt customers love and maybe even brag about having it available. But how many guests would actually use the service, especially during the graveyard shift? Yes, people take comfort in having options available to them like access to a gym at all hours, but only utilization of these benefits will truly impact satisfaction over the long run.
Loyalty a la carte
Think of loyalty program customization as loyalty a la carte. Guests can choose, for instance, three benefits to receive from a list of 10 (think free Wi-Fi, complimentary buffet breakfast, dry cleaning, shuttle service access and so on). And because they are selecting what best appeals to them, they will have a higher degree of fulfillment as they are the ones in the pilot seats of their experiences. Furthermore, it’s a way to differentiate your loyalty program while potentially cutting costs at the same time.
You could also add in a premium section (such as a complimentary dinner, free spa treatment, session with a personal trainer and so on), and customers would have the choice of two from the initial list of 10 plus one premium extra. This premium section also could be used as an incentive for splitting your loyalty program into the free version and those who pay a monthly subscription, with only the latter receiving access to the upper-tier options. In the app world, this bifurcation of services is often called “freemium.”
It’s easy to sign someone up for loyalty membership. But this is the equivalent of getting your foot in the door; more is needed to keep customers’ interest. A la carte bonus menus can act as the hook to obtain this retention. It draws attention to the loyalty program every time guests stay with you because they might decide to reconfigure their selected modifiers to better suit the needs of that specific trip.
Learning from the best
Gamification is customization taken a step further. And if you want to learn how to gamify an a la carte system, you need only look to possibly the most addictive video game series around, “Call of Duty” and its perks system. The gist of it is the more you play the more perks, or character enhancements, you can access, but in application it’s far more elegant than that.
To hark back to the abovementioned a la carte example, suppose that instead of free loyalty membership giving you the ability to choose three out of 10 potential benefits, it only gave the option of two out of five. But, once you stayed, say, five nights, the last five modifiers would be unlocked, and then when you stayed another five nights you would be able to select three out of those 10 perks. Beyond this, you might even add another five lucrative bonuses that are only available to those guests who have stayed 20 total nights with you.
The key here is that the system is cumulative. It’s different from a “stay five nights, get one night free” promotion in that once the complimentary room night is achieved, the game resets and customers have little incentive to play again to obtain the reward a second time (apart from the fact that they think your product is superior to all others around). With an a la carte perks system that unlocks at set increments, there’s a higher degree of emotional investment on the part of the guest. Each time guests check their loyalty program profile, they’ll know exactly where they stand and what they need to “level up.”
Moreover, such a program would allow you to redefine and pay special attention to your VIPs. The potential benefits for someone who has stayed with you for 150 roomnights would be vastly different from a guest who has only been with you for six. This stratification would also allow you to better classify the importance of each guest and deliver unexpected and personally meaningful rewards to those who are especially loyal.
Of course, there’s the issue of reward costs. How do you balance the costs of redemption? Or, more importantly, who does the balancing: the brand or each individual property? How do you find parity when different hotels have different owners? This is a critical impediment to any gamification upgrades to your loyalty program and something that will require ample arbitration. But with the proper rewards stratification, a compromise can be reached.
The bottom line
My reason for introducing the notion of gamifying your loyalty program is due to the severe lack of consumer faithfulness. The word usually denotes someone who allies predominately with one brand and only one brand. Nowadays, membership in a loyalty program does nothing to deter customers from going elsewhere at anytime. So, in order to justify the naming and bring loyalty back into the program, you need to design something that catches and commands attention, especially among the growing numbers of millennial consumers. Having incrementally unlocked levels within your newly gamified loyalty program might be just the trick.
Larry Mogelonsky is the president and founder of LMA Communications Inc., an award-winning, full service communications agency focused on the hospitality industry (est. 1991). Larry is also the developer of Inn at a Glance hospitality software. As a recognized expert in marketing services, his experience encompasses Four Seasons Hotels & Resorts and Preferred Hotels & Resorts, as well as numerous independent properties throughout North America, Europe and Asia. Larry is a registered professional engineer, and received his MBA from McMaster University. He’s also an associate of G7 Hospitality, a member of Cayuga Hospitality Advisors and Laguna Strategic Advisors. Larry’s latest anthology book entitled “Llamas Rule” and his first book “Are You an Ostrich or a Llama?” are available at Amazon and Barnes & Noble.
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