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Gamification in Loyalty Programs

Updated on September 28, 2022
Gamification in loyalty programs - Smartico

With the rise of the internet and mobile technology, loyalty programs have become more important than ever before. They give customers a reason to spend their money with you while also helping you keep track of who is spending how much, when, and on what product or service. Loyalty programs have been around for quite some time, but they’re not all created equal some are better than others when it comes to building customer loyalty and encouraging repeat purchases over time.

Gamification, what is it?

Gamification is the process of applying game thinking and game mechanics to engage people in solving problems. It’s a way to use game design techniques in non-game contexts.

Gamification can be used by designers or developers who want to increase engagement and interaction with their audience, or it can be used by companies who want to incentivize desired behaviors within their customers (such as loyalty).

Structure and elements of gamification

Before you start thinking of ways to gamify a loyalty program, it’s important to know what gamification is. Gamification is the use of game elements in non-gaming contexts. These elements include:

  • Points – like in a video game or mobile app, points are a way of tracking progress and moving forward through levels. They’re also used to reward customers for their loyalty with different types of rewards that increase in value as they gain points.


  • Leaderboards – see who else has earned the most points over time or within an event (like an Olympics). Leaderboards can be one-dimensional (you rank based on points) or two-dimensional (you rank based on both quantity and quality). Either way, leaderboards can help motivate players by competing against their friends or against other people in general who have similar interests.


  • Badges – badges are achievements earned by completing tasks, such as making purchases from certain merchants or performing any number of other actions related to your business’ services/products/services, etc… Badges may come with additional benefits attached (e..g., additional discounts) which makes them more valuable than simple status symbols since they offer tangible benefits as well as recognition for doing good work!

Goals, objectives, and benefits of gamification

But why is gamification such effective? What makes it so powerful? And how can you use it to improve your loyalty programs and customer retention, engagement, and experience? Let’s examine the reasons why:

  • Gamification is inherently fun. It’s a way to engage users by making them feel good about themselves by earning rewards or badges. Gamers know that they’re going to have an enjoyable experience when they play a game. The same principle applies when using gamification in loyalty programs: if you make people feel like they’re having fun while participating in your program, they’ll be more likely to come back again and again!


  • Gamification can be used as a reward system for customers who achieve certain milestones (e.g., reaching certain levels of points or spending money) or for those who complete specific tasks (e.g., signing up for the rewards program). This allows organizations better control over their promotions by allowing them to determine what actions are rewarded with points/rewards rather than relying solely on promotional offers from third-party suppliers (i.e., no longer needing outside help).

What is loyalty technology?

Loyalty technology is a broad category that encompasses the hardware and software used to manage a loyalty program. It includes:

  • Customer loyalty management solutions, allow companies to analyze and improve their loyalty programs via data analytics.


  • Loyalty marketing platforms, help brands develop new ways to engage customers through social media and mobile apps.


  • Loyalty analytics software analyzes point-of-sale data collected from customers’ purchases and offers insights into how they can improve their programs for better customer retention rates.

How to implement gamification in loyalty programs?

Now that you know the importance of gamification in loyalty programs, let’s discuss how to implement it.

There are several ways to go about it:

  • You can use an existing loyalty program and add a game layer on top of it. This way, your customers will get all the benefits of having a good loyalty program without having to make any major changes or investments.


  • You can create and design your gamified system from scratch. This method may be more expensive than adding a game layer to an existing system, but it will give you more control over what goes into your program and how everything works together. If you’re feeling ambitious, this is probably the best option for creating something truly unique!

Benefits of implementing gamification in a loyalty program.

  • Increased brand loyalty. The most obvious benefit of gamification is increased brand loyalty. Studies have shown that customers who engage with brands in a fun way are more loyal than those who don’t because they feel like the brand is taking good care of them and creating an experience that makes them happy. This leads to:


  • Purchase frequency and size. Gamified companies see an average purchase frequency increase of 15% over non-gamified companies, as well as 47% more purchases per year overall. This can be attributed to customers wanting to get better at the game and progress further through it, which means they’ll shop more often if they’re constantly earning points or other rewards for their purchases.


  • Customer engagement & referrals. Gamification also increases customer engagement by keeping them coming back for more and not just in terms of shopping; you’ll also see an increase in word-of-mouth referrals from existing customers who want others to join in on the fun! That’s because people tend to be drawn towards things that are rewarding (like getting free stuff), so when someone has earned something cool like a discount or extra points for their next purchase because they referred someone else…they’ll want everyone else around them too!

What technology is used in loyalty programs?

  • Customer data.
  • Personalization.
  • Analytics.
  • Rewards.
  • Mobile.
  • Social media integration is another key advantage of loyalty programs that gamification can help with, as well as conversion rate optimization (CRO).

Implementing gamification in a loyalty program will increase the brand loyalty of your customers and even encourage them to spend more money. The idea is based on rewarding your customers for their actions and interactions with your brand, which ultimately leads to higher profits for you.

Looking for a company for your loyalty program?

The best option is to choose Smartico is a Gamification and CRM platform that enables companies to create and manage loyalty programs, as well as build Gamified processes. In addition, we boost Gamification with comprehensive omnichannel CRM Automation campaigns that support real-time engagements.


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