Loyalty Register glossary
Gamification
The use of game mechanics, such as challenges, progress bars, badges and streaks, in a loyalty program to encourage specific behaviors.
Gamification is the use of game mechanics in a loyalty program to encourage particular behaviors: challenges, progress bars, badges, streaks, levels, games of chance and leaderboards. It turns a target, such as three visits in a month or trying a new product, into a visible goal with a reward at the end.
Updated · By Loyalty Register Editorial TeamRelated terms
Which game mechanics do loyalty programs use?
Challenges or missions that pay a bonus for completing a set of actions. Progress indicators that show how close a member is to the next reward or tier. Streaks for repeated visits, badges and collections, instant-win games, and levels that reflect activity. Category challenges, such as buying from three departments, are a common way to broaden what members buy.
Why does it work?
Visible progress makes a goal feel closer, and a clear target with a deadline gives members a reason to act now. Challenges can be aimed at specific segments and behaviors, so they are more precise than a general bonus. They also give the program something new to tell members about, which supports engagement between purchases.
What are the risks?
Mechanics that do not lead to a meaningful reward feel like decoration and are soon ignored. Complex or very frequent challenges cause fatigue. Games of chance can raise legal issues, because sweepstakes and contest rules vary by place, so check them with counsel. And like any bonus, challenges can reward behavior that would have happened anyway: a member who already visits weekly collects the points for a three-visit challenge without changing anything.
How do you measure gamification?
Tie each mechanic to a behavior you want and measure the change against a control group that did not receive the challenge. In a hypothetical challenge that awards 100 points for each of three visits, with points worth 1 cent, the reward costs $3 per member who completes it. Compare that with the incremental visits and spend the challenge produced. Track completion rates and repeat participation by segment, and retire mechanics that do not change behavior.