Why Loyalty Programs Should Add Badges (Badgification)
Loyalty program gamification is one of the newest innovations in customer engagement. Loyalty programs have typically relied on a core value proposition around earning points: the basic “do-get” concept. Members earn based on their spending and receive some sort of reward. But today’s customers expect more in return for their loyalty. They now seek out programs that elevate the experience and provide fun and entertainment.
4 Reasons Why Loyalty Programs Need Badges
Over the last several years, gamification has emerged as an option for programs to do more than the simple “do-get.” The program can layer in different gamification concepts such as badgification which allows members to earn and collect badges, receive special recognition, compete against other members, and more. And these features can offer up considerable value to a loyalty program:
- Behavior change — Loyalty programs are geared towards encouraging members to shop more. By adding the ability to earn badges, you can tap into their competitive nature. Being able to collect unique badges or badges that unlock new opportunities and experiences will encourage members to complete the desired task. That could be making a transaction, completing a promotion, filling out a survey, or more.
- Margin savings — Customers are definitely motivated by discounts but badges can also incent incremental purchases, spend, or completion of the desired activity, typically at a much lower cost. Rewarding members with a unique or exclusive badge can reduce your program's dependency on discounts which cut into the margin.
- Points liability — With fairly recent accounting changes for loyalty programs, many companies have increased their focus on reducing the point liability associated with their loyalty programs. Badges can be an alternative to points as they can encourage transactions or activity, but the badge does not convert to a reward, therefore not increasing program liability.
- Appeal to younger shoppers — Gen Y and Millennials tend to seek programs that provide more instant gratification for their activity. They’re less willing to save up for extended periods of time to reach some elusive reward. Layering badges into your program can help to add an array of fun and easy options for providing that immediate payoff. For example, achieving a specific badge could unlock an exclusive invitation to a private members-only event. Or X number of badges are required before advancing to a “premium” experience in the program. Vendors can even jump into the game and offer limited-time badges or ones that are tied to a specific product purchase.
More Ways to Improve Your Loyalty Program
Today’s customers expect more from loyalty than just your basic points offering. Make it fun for them! There are many other ways you can gamify your loyalty program. Create a leaderboard so members can see who’s on top. Surprise and delight members who achieve various badges or milestones. And this does not mean you have to toss out an existing program. There are lots of ways to layer these features into an existing program. Badgification can not only encourage members to shop and engage but it may even help you earn a badge from your CFO for the “Most Profitable Program.”
Brierley offers FAST Track modules and consulting opportunities such as our Loyalty Ideation Workshops where we can help your organization exploring gamification options for your program. Additional modules include Program Health Assessment, CX/MX Journey Mapping, Demographic Profiling, and many more. To learn more, contact us or call 214-743-5454.