LOYALTY PROGRAM AND GAMIFICATION – a simple guide

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A simple guide on how to set up a loyalty program and introduce some gamification elements

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LOYALTY PROGRAM AND GAMIFICATION – a simple guide

  1. 1. LOYALTY PROGRAM AND GAMIFICATION – A SIMPLE GUIDE Massimo Bellato
  2. 2. OVERVIEW • With a loyalty program you can understand users behaviour, needs and you can influence their purchasing history and future interaction with your brand and your company. • Customer loyalty is a pillar and a must have strategy to increase your business development rating. • In every company, customer acquisition is 5 to 10 times more expensive than loyalty activities and it creates more revenue on the long period. • Based on a regular average cart value in every ecommerce envronment, a loyal customer could make 60% more purchases than a new user.
  3. 3. MAIN GOALS Increased Revenue Retain Customers Target Marketing Behaviours Increase Spend & Frequency Build Brand LoyaltyBuild Customer Relationship Differentiate vs. Competition Acquire New Customers Gain Customer Insight
  4. 4. ACTIVATION PATH Step 1: Loyalty basic actions •Returning customers •Acquisti/ven dite ricorrenti Step 2: Points System •User retention •Build visibility and advocacy •Build WOM through Social media channels Step 3: Tier system •Brand Awareness •Returning customers •Long-term loyalty Step 4: Gamification & Badging •Engagement •DB segmentation
  5. 5. LOYALTY PROGRAM – BASIC ACTIONS •The first step to take is to set-up proper incentives and pay-back to your customers. You could give them products, premium features or discounts on your items catalogue. • You’ve to focus on few goals: • Increase the rate of user first purchase conversion • Member get Member virality • Increase purchase retention • Increase the average cart value
  6. 6. Coupon € 20 Coupon € 5/ registered friend Coupon € 10 LOYALTY PROGRAM BASIC – BASIC ACTIONS For every user interaction inside your website, you should send him a triggered email with the reward alert. You’ve to consider only few and fundamental basic actions because every discount you give will be added to your CPA (Cost per Acquisition) or CPS (Cost per sale) User sign up Every 250 € of purchases Friends invitation (E- mail, referral codes or friend from fb, gmail, ecc…) 1° purchase of invited friend Coupon € 5
  7. 7. SCORE SYSTEM The rewarding system is only the first step on our path; With a score system you can assign few points to every user for every action taken Sales Social (Community interactions) Tier System Gamificati on Score System
  8. 8. SCOREBOARD & RANKING For every action on your website, you’ve to choose wisely the number of points to assign and the importance of that action. Sign UP 3 30 Feedback 2 20 Purchase 3 50 Sharing (prodotto, look, ecc…) 1 5 Add to wishlist 1 5 Invite friends (per friend registered) 2 10 Commentin g a product or a look 1 5 Follow 10 users 1 5 Action Rank Points Virtual Wallet
  9. 9. VIRTUAL WALLET •All the points earned will be cumulated inside a virtual wallet; Users could gain more reward and prizes using that points. Virtual Wallet: 115 points Sign Up Product Upload Purchase Upload look Sharing products on facebook (like)
  10. 10. SCORE SYSTEM REWARD Using score points with a virtual wallet, may give access to a series of real benefit that will encourage the user to reiterate new actions: • 200 points: € 5 • 500 points: € 10 • 600 points: Free Shipping on your next purchase • 700 points: € 15 • 800 points: Visibility of one of its prod in the 'featured homepage area » • 1000 points: € 20
  11. 11. If your userbase is large enough and if the previous loyalty steps are working, you can introduce a Tier system loyalty program to grant for every user a permanent benefit insider your website. User make some actions User collect points earned inside his wallet User could spend that point to earn benefits Sum of the points spent Establish user ranks Permanent benefit TIER SYSTEM
  12. 12. MULTILEVEL SYSTEM Novice user 0 – 4999 Junior user 5.000 Expert User 20.000 Guru 50.000 Level Points used
  13. 13. REWARD EXAMPLES Tier system is used to reward the most loyal users and more active inside the community; the benefits deriving from the level reached will be permanent and it will affect the user perception to others. Here you can find few exaples for a fashion brand tier system: • Fashionist: Invitation to the halls preview of Private Brand: the user is notified before any other products that will be on sale in advance of receiving a newsletter through which to purchase the products already discounted • Trendsetter: Free shipping on orders over € 200 • Style Guru: 5% discount on purchases over € 150
  14. 14. GAMIFICATION & BADGING The playful aspect is an environmental aspect that , if introduced, allows you to entice users to make more willingly the required actions. Through the badges , users are identified and profiled and exposed in a public rank that could be used to push competitiveness among them. In this case, in addition to achieving tangible prizes , there will be some badges (Foursquare like) that will identify each user on the basis of the actions taken and progress achieved.
  15. 15. MAIN GOALS The main goals to achieve through the introduction of badging system are different: • User base profiling • User engagement • Active user increasing • Brand Awareness • Word of mouth
  16. 16. BASIC BADGE SYSTEM The first group of badges could be related to your tier system rank. Guru Junior User Novice User
  17. 17. ADVANCED BADGE SYSTEM You can evolve your badge system creating some advanced badges related to more complex actions of the user: • Brand followed (if you’re an e-commerce) • Number of products purchased • Number of likes or reshars • Number of posts (in a forum or a community)
  18. 18. GAMIFICATION PLATFORM

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