Loyalty programs aim to entice you with games
If collecting and redeeming points on a credit card or loyalty card has ever felt like a game to you, you are definitely on to something.
More and more of Canada's major retailers, banks and entertainment companies have been attaching game mechanics such as points, leaderboards and badges to their loyalty program mobile apps to make them more enticing to consumers. The concept is called gamification, and though it only started gaining wide popularity as a marketing strategy in 2010, the idea is as old as frequent flyer programs such as Air Miles and Aeroplan, which are widely considered the first gamification concepts.
"Gamification is simply the use of game mechanics and game ideas in something we wouldn't normally consider a game at all," says Neil Randall, director of the Games Institute, a lab dedicated to researching games and game-related technologies at the University of Waterloo. "You don't have to know you're playing a game, but you are following rules toward very specific goals, which makes the activity game-like."
Solving a ‘sticky' problem
The latest example of gamification is the new mPlay and Pay mobile app from Canadian Tire. Launched in September 2015, the app is available exclusively to Canadian Tire Options MasterCard holders.
You can use the app for regular banking purposes, such as checking your account balances and payment history, or to make contactless purchases at specific Canadian Tire locations. Then it has gaming elements, such as earning badges when you use the app to pay or when you switch to online statements.
Those badges aren't just digital achievements. For every 10 badges you acquire, you receive ten times the Canadian Tire money you collect over the next 10 days. If you pay for purchases with your MasterCard, you get 10 times the money spent in Canadian Tire money as well. Added up, it works out to 8 per cent cash back on all Canadian Tire purchases.
"In classic gamification ... you're doing something more enjoyable and, companies hope, more engaging than simply going to a website and looking around," says Randall. "It's a way for companies to improve what web developers used to call ‘stickiness' and keep people engaged and interacting with a brand for as long as possible."
For loyalty programs, stickiness translates into participation.
"From a marketing standpoint, as soon as you're participating in something, you have an ownership stake in it," says Randall. "I don't care if you're racking up loyalty points on a credit card or redeeming free groceries at the grocery store, you buy into it and you keep going back because there's a benefit at the end and gamification takes that benefit a few steps further."
Gaming doesn't necessarily mean spending
Before, gamification wasn't advertised - airline points programs rewarded users with tangible prizes, but they weren't marketed as "games," even though that's what they boiled down to.
Now, companies that use gamification are more upfront about it. Canadian Tire put a hockey game right into its app and Cineplex Odeon movie theatres host a mobile game called Time Play, which is played on the big screen between audience members.
Gamification isn't always about getting you to spend money. Sometimes, it's just getting your eyes on the brand. For instance, the games from Canadian Tire and Cineplex Odeon don't make you spend money to play, but they give you incentives to spend more on their products (by offering extra Canadian Tire money or motivation to visit the theater). More importantly for marketers, the games attempt to engage you more with the brand.
"Branding 101 is keep the brand in front of people's eyes and if you're using a smartphone with access to myriad apps, the big question for these companies is, ‘How do we get the consumer to access our app even once and cut through the clutter?'" says Randall. "Gamification plays on the idea that games keep bringing you back and compel you to keep playing."
But not everyone likes games. According to the Entertainment Software Association of Canada, 54 per cent of Canadians are gamers (people who play games at least every four weeks), meaning 46 per cent don't play.
"Games aren't for everyone," says Randall. "It's not a one-size-fits-all idea, that's where gamification has fallen off the rails a bit. There is this idea that we're all going to be really excited after getting a badge for something and the fact is, we're not."
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