Retail TouchPoints: Scoring Loyalty Points with Funware
By Amanda Ferrante
Through a special arrangement, presented here for discussion
is a summary of a current article from the Retail TouchPoints website.
innovator and entrepreneur Gabe Zichermann argues that, while Google has been
a major force in driving the discoverability of brands and retailers online,
the massive concentration of pay-per-click advertising plus the ease of browsing
online has eroded e-tail brand relationships substantially. His new book, Game-Based
Marketing: Inspire Customer Loyalty Through Rewards, Challenges and Contests,
explores the concept of “funware,” a
new model for incorporating and leveraging videogames and game mechanics to
In an interview with Retail TouchPoints, Mr. Zichermann said
companies like Foursquare and Chase as well as the U.S. Army are cutting through
the clutter and creating lasting, durable loyalty through game mechanics like
points, badges, levels, challenges and rewards.
“Funware is the use of game mechanics in non-game contexts, and really
springs from the notion that any consumer experience can be made more fun,
and through fun, more engaging,” said Mr. Zichermann.
One of the simplest “big
picture” ideas for retailers, according
to Mr. Zichermann, is to leverage the lessons of FarmVille, the online virtual
farming game, and refocus loyalty rewards away from discounts and merchandise
to “soft” or virtual goods.
“Example after example shows that consumers are equally motivated by
status as they are by cash or prizes, which means that retailers can offer
cheaper rewards (virtual branded merchandise, early access to new products/services)
in lieu of costly rewards,” said Mr. Zichermann. “Such a switch will
actually improve retention and sociability (especially among younger demographics)
while vastly reducing loyalty program costs.”
For example, in its Chase
Picks Up The Tab promotion, JP Morgan Chase offered a slot-machine style reward
when users paid for items at any merchant with their debit cards. In some cases,
Chase covered the bill. A Foursquare promotion offered special rewards for
Jimmy Choo buyers who acquired specific virtual badges for completing tasks
in a given day. The promotion drove hundreds of thousands of virtual and real
visits for the shoe company.
Mr. Zichermann said the book explores consumer
motivations through a game-playing lens.
“These include user drivers like exploration, socialization, achievement
and killing (not as bad as it sounds),” said Mr. Zichermann. “These
motivations drive each of us, to varying degrees, and at different times.”
added, “The stickiest content for consumers is that which delivers
social status, enabling them to appear smarter, more connected, more successful,
etc., with their friends. Game-based marketing is premised on the notion that
an effective loyalty and reward system in the 21st century is based on social
status: Facebook, Twitter and rewards that emphasize users’ individual
desires to be recognized.”
Discussion Questions: What do you think of video game mechanics and virtual
awards as a driver of online marketing efforts? Is this the way brands can
tap into the socialization aspects of the internet? Can such virtual rewards
be applied to offline customer acquisition and retention efforts?
Marketing Author Shares Insights On Scoring Loyalty Points With Funware – Retail