In today’s fast-paced, highly competitive retail landscape, brands need data-driven personalization strategies to foster user engagement and stand out from the competition. Marketers who recognize and address shoppers’ individual needs see increases in sales, decreases in costs, and higher levels of brand awareness and customer loyalty. One of the biggest elements of personalization is motivating consumers through meaningful rewards. Now more than ever, brands are turning to gamification to give shoppers the unique incentives that they’re looking for. What is gamification marketing, and how does it work?

Gamification is the practice of using game mechanics in a non-gaming context to encourage user engagement. It creates a fun, interactive, and memorable experience for people while giving companies the opportunity to share content and collect information. Gamification can be used in many different contexts, such as health, education, and finance. For example, users might receive a reward for running a certain number of miles or learning a certain number of vocabulary terms. Finance apps can help users visualize their spendings and savings, and rewards them for completing financial goals through interactive challenges. Recently, game mechanics have become especially popular in business and marketing. Due to the demand for enriched customer experiences, the global gamification market is projected to reach $40 billion by 2024.

In gamification marketing, brands use a combination of the following game mechanics:

• Goals are objectives that customers work towards in order to receive a reward in return. For example, brands might ask users to complete a survey, watch a video, or make a purchase to qualify for a prize.

• Limits create a sense of urgency that incentivizes users to act as quickly as possible. This can include a limited number of participants, a limited window of time, or a limited number of prizes.

• Points give customers a clear understanding of their progression, especially if they’re working towards a goal with multiple steps or a reward of high value. For example, brands might ask users to watch three videos worth ten points each to earn enough for a reward.

• Leaderboards motivate users to compete against one another, driving higher engagement rates. Participants might also be separated into ranked tiers based on their performance, such as how many goals they’ve completed or how many rewards they’ve redeemed.

• Rewards like badges, physical gifts, and digital prizes provide users with an incentive to engage with a brand’s gamification marketing efforts. It gives them positive reinforcement, a sense of accomplishment, and a deeper connection with the brand.

Creates brand awareness and user engagement

While many marketing strategies focus on driving acquisition and sales, gamification marketing primarily focuses on creating fun, memorable experiences for consumers. Gamification helps brands get people’s attention and educate them about their products and services without being overly sales-centric. It also motivates user engagement through activities and rewards. For example, customers may not want to open an email about a new product launch or click a banner ad about an online sale. However, they might be more interested in playing a spin-and-win wheel or answering a quiz for the chance to win brand merchandise, digital rewards, free products, and so on.

Drives lead generation, conversions, and sales

As gamification fosters awareness and engagement, it also leads to higher brand recall, increasing lead generation, customer acquisition, and sales. 88% of marketers say that gamification marketing and other types of interactive content help them stand out from their competitors, eventually resulting in them becoming consumers’ preferred brand. Game mechanics also improve clickthrough rates and other desired conversions, as users are more likely to respond to call-to-actions that offer experiences and incentives than call-to-actions that try to sell them something. Brands can use gamification marketing throughout the buyer’s journey to turn qualified leads into loyal customers and eventually, into brand advocates.

Fosters user retention and customer loyalty

Personalization fosters user retention and customer loyalty through trust and emotional connections, where consumers feel seen and understood as individuals by a brand. Gamification can be a form of personalized marketing if brands offer a variety of experiences and rewards, as it gives audiences the power of choice based on their own interests. They’re more likely to engage with a brand that lets them pick their reward over a brand that offers the same reward to everyone. It also fulfills people’s need for instant gratification through immediate returns, which keeps them coming back for more. Lastly, gamification marketing helps brands retain loyal customers through positive sentiment, sustained engagement, and compelling experiences. Gamified marketing efforts that incorporate customer segmentation and personalization proves to audiences that brands genuinely care about maintaining a long-term relationship with them.

Captures consumers’ zero-party and first-party data

Zero-party and first-party data are key to executing effective marketing strategies, as data helps brands better understand their audience’s needs, preferences, and behaviors. Gamification marketing increases a brand’s chances of successfully capturing consumer data, as customers are more willing to provide their information when they receive something in return. For example, brands can ask users to provide their email address to receive a digital scratch card or to complete a feedback survey in exchange for a discount code. Gamification marketing is also fully compliant with data privacy policies, reducing the risk of monetary fines and legal action. Consumers knowingly and willingly provide their data with explicit consent when engaging with a brand’s game mechanics.

Time, resources, and development

While gamification marketing can lead to higher consumer engagement and user retention, resulting in increased sales and revenue, initial development can be costly. Some game mechanics, such as quizzes and scratch cards, are relatively simple to create. However, if brands want to build complex games and programs, they potentially need a lot of additional resources. To navigate the risks, marketers should start small before investing in more complicated gamification efforts. For example, they could start with a spin-and-win wheel, then add a points-based system when they’ve acquired a certain number of users or reached a desired return on investment.

Risk of overcomplication and oversaturation

Gamification runs the risk of becoming overcomplicated, especially if brands try to incorporate as many game mechanics as they can into a single marketing campaign. Customers may also feel overwhelmed if brands try to gameify all of their marketing efforts. This can negatively affect a brand’s sales, engagement, and reputation. Users don’t want to navigate complex journeys just to earn one reward or play a game every time they interact with a brand. Marketers should strike a balance between their company’s goals and their audience’s interests, with an emphasis on creating frictionless, consumer-centric experiences. Gamification marketing should be simple, fun, and valuable for users first, brands second.

Develop buyer personas and brand objectives

Customer segmentation helps brands appeal to different audiences and understand what they want out of their gamification marketing efforts. Marketers need to know what kinds of game mechanics, objectives, and rewards will excite people and get them to engage with their brand. For example, are they more interested in playing instant win games or earning points over longer periods of time? Are they more motivated to win free products, special offers, or brand merchandise?

Brands also need to set goals to give their gamification marketing campaigns a clear direction and purpose. If they want to educate audiences, they can ask users to participate in a free trial or watch a product demonstration video in exchange for a reward. For example, TENA®’s Consumer Rewards Program members can watch product videos to earn points, which are then redeemed for digital Visa prepaid cards. If they want to increase brand awareness, they can ask consumers to share their social posts and tag their friends to enter a sweepstakes contest. They can also increase sales by offering discounts and bundles or capture consumer first-party data through polls and surveys. Specific gamification objectives help brands create targeted messaging and content that adds value for themselves and their consumers.

Prioritize design, functionality, and simplicity

In gamification marketing, brands need to focus on the user experience by investing thorough amounts of time and resources into development and testing. To start, marketers should set a minimal number of rules and low barriers to entry to encourage higher participation rates. They can also practice progressive profiling by asking for small amounts of information over time, rather than all at once, to avoid overwhelming users during their initial touchpoint.

When done correctly, gamification marketing should be easy to understand and easy to navigate. Brands need to avoid including too many design elements or game mechanics that may create friction. For example, McDonald’s Monopoly sweepstakes promotion takes a familiar board game and simplifies the rules to make it easy for consumers to participate. Rather than buying and selling properties, customers only need to purchase specially-marked menu items to earn “game pieces”, which gives them a 1 in 5 chance of winning a prize.

Create an engaged and dedicated community

Gamification is a great way to encourage communication, participation, and friendly competition among a brand’s followers. Consumers are more motivated to engage with a brand when they see other people getting involved, creating an active and engaged brand community. Some are driven by competition and the opportunity to win something based on luck or skill, while others are driven by collaboration and the opportunity to form connections with like-minded people. Dedicated brand communities foster user retention and consumer loyalty, leading to increased sales, revenue, and customer lifetime value.

Marketers can develop brand communities through competitive and collaborative game mechanics, such as leaderboards and team-building incentives. For example, brands might ask consumers to achieve a certain rank or complete a goal with other users to qualify for a reward. Nike’s running tracker app, Nike Run Club, lets users share their running statistics with friends; they can leave likes and comments on other people’s posts, furthering the social aspect of the app. It also features weekly and monthly challenges, where users are ranked on a leaderboard according to metrics like distance and time, and win badges for reaching specific milestones.

Capture and leverage user data

As mentioned previously, brands need to collect consumer zero-party and first-party data to create effective data-driven marketing strategies. Data helps marketers better understand their users and design personalized customer journeys from start to finish. Gamification marketing makes the data collection process feel more organic and gives consumers an incentive to provide their information. Rather than simply asking people to create an account or join their mailing list, brands can ask users to provide their email address or answer a questionnaire to participate in an instant win game or to receive a reward.

Brands can use game mechanics to build detailed customer segments and profiles. For example, leaderboards help them identify the most engaged users, while badges and rewards help them identify the most effective incentives. They can also ask users to answer polls, quizzes, and surveys to earn points or receive rewards, providing deeper insights into their interests and behaviors. Universal’s All-Access Rewards loyalty program features a survey in which members answer how they learn about new movies, what movie genres they like, how many movies they’ve purchased over a period of time, and so on. Once they complete the survey, they earn points that can be redeemed for physical and digital rewards.

Gamification marketing is one of the most effective ways to capture user data, as it provides value to both company and consumer at the same time. Customers receive rewards for giving their zero-party and first-party data without feeling like they’re being marketed or sold to, while brands gain meaningful insights that lead to stronger personalization and targeting strategies.

Marketers can look at the kinds of users that engage with their gamification efforts to determine what motivates them and what might motivate others who are less involved. Data might tell them that people enjoy competing against other users, earning points and badges, or receiving rewards. Data can also help them differentiate between user segments and give them more personalized experiences. For example, if a certain demographic prefers discount codes over free products, brands can create additional discount offers to drive more sales. If another demographic seems especially motivated by leaderboard rankings, brands can add tiers and titles to drive more engagement.

Lastly, gamification marketing also supports other data-driven marketing efforts. Zero-party and first-party data helps marketers design better email campaigns, social media posts, website content, and paid advertisements. Gamification encourages sustained engagement, in which users consistently interact with a brand to complete more objectives and receive more rewards. This gives brands a breadth and depth of data over the course of their audience’s complete path to purchase, from initial awareness to customer acquisition and eventually, consumer loyalty and brand advocacy.

Drive your first-party data collection strategies with gamification marketing

With the increasing number of data policies and privacy concerns, data collection can be a tricky task to navigate. Gamification marketing is the perfect way to engage consumers and capture zero-party and first-party data at the same time. It also helps users feel more connected with brands, leading to increased awareness, sales, and customer loyalty.

Using 3 tier logic’s PLATFORM³, brands can create sweepstakes, contests, and loyalty programs with popular game mechanics like points systems and instant wins to generate interest, engagement, and conversions. Modules like Points & Gamification and Data Capture & Analytics provide marketers with the tools and information they need to build gamification strategies and make strategic business decisions for future promotions. To learn more, book a demo with our team today.