Gamification can be defined as “the use of game design techniques and mechanics to solve problems and engage audiences to generate desired behavior.” Gartner Group estimates that up to 50% of all companies will use gamification by 2015. Whether a bank wants to sell more products, increase card spending, educate their customers, or make their loyalty program increase retention by heightening customer engagement, gamification can help achieve these objectives.
Banking rewards are traditionally related to packaged accounts and credit cards. Customers with a certain asset size and/or number of products qualify for a packaged account, which typically grants lower fees and interest charges or added services such as concierge service compared to not having a packaged account. This does not really engage the customer, but builds a negative barrier to switching. Credit cards have traditionally relied on spending related rewards; in whether as flat or tiered cash back or point-based bonuses on spending.
Airline and fuel loyalty programs are traditionally tiered based on spending levels, and while there are certainly cases of customers that work hard to reach and maintain the higher tiers of these programs (e.g. going on “air miles runs”), this is not really a fun, engaging and brand-strengthening approach to building loyalty and desired customer behavior. So how can banks and cards be smarter than simply offer generic spend-based point rewards?
The first thing a bank or card program manager should ask is “What do we want to achieve”? Do we want to attract more customers, increase loyalty, cross-sell more products, increase a desired behavior, decrease an undesired behavior, educate our customers etc. Once we know, we can set objectives for our program and work to drive customers to those goals through fun and rewarding engagement using elements such as achievement points and badges, mini-games, leader boards, progress bars and other game elements.
To make card spending more interesting, one could give the cardholder achievement rewards for using the card in 5, 10 or 25 different MCCs in a certain period, at certain partner retailers, or for example in one or more different countries or continents. If the card issuer is facing fraud problems, educate cardholders by rewarding them with points for completing educational programs in the form of viewing instructional videos and then doing mini games such as quizzes. If we want to increase cross-sales, we could give new customers bonus points for signing up to new products, such as id theft insurance. These are just a few examples of how banks and card issuers can use gamification to drive desired behavior.
This blog post is an excerpt from MACAW Card Bulletin 41: Differentiation with Gamification. If you would like to subscribe to the MACAW Card Bulletin or hire MACAW to help your organization exploit the potential of gamification to reach your sales and marketing goals, please call +47 412 69 669 or e-mail post@macawresearch.com.
