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Promotion Gamification:
How and Why It Works

Find out why an increasing number of brands are

gamifying their promotions

info@talon.one Talon.One GmbH www.talon.one

A deep dive into the world of gamified promotions

Discover how to sell more while also giving your

customers a much more enjoyable shopping
experience.
WHAT’S INSIDE

What is Gamification? 04

How Does It Work? 05

Inspiration From Southeast Asia 06

Tiered/Daily Rewards 07

Target-Based Rewards 08

Loyalty Tiers 09

Stamps & Badges 10

Gamified Experiences 11

Shopping Gamification 13

Gamified Loyalty Programs 14

Talon.One’s Solution 15
What is
Gamification?
Gamification allows brands to give
their customers a much more
rewarding shopping experience.

Gamification is a concept that many brands
use to improve the shopping experience for
their customers. While most of the newest
and most creative gamified promotions are
digital, the idea of gamification has been
around for a long time.
In fact, gamification has been around in
some form or another as long as modern
promotions have been a thing. Take coupons
and prize giveaways, for example.
Early promotions were limited by various
factors. But now that we, for the most part,
live and shop online, the possibilities for
gamification are almost unlimited.
There are some great examples out there
that can provide inspiration for any business
looking to give customers a more engaging
shopping experience.
Let’s take a look.

They’re some of the most common

Over 70% of consumers
promotion techniques, but they still rely on are more likely to
gamification to attract customers. Physical
recommend a brand if
coupons often resemble money to give
them an aesthetic appeal. Meanwhile, prize it has a good loyalty
giveaways are gamified from head to toe. program. -Bond

Promotion Gamification: How and Why It Works 4

Gamification: How
Does it Work?
Gamification positively reinforces
buying behavior with rewards and
game-like features.

Compared to other promotional techniques,

The key to effective gamification
gamification taps into the brain’s reward
mechanism to encourage sales. Just like Nowadays the majority of all gamified
normal promotions, gamification uses promotional campaigns are set up and run
attractive deals and discounts to win over digitally. This means that choosing which
customers’ wallets. platform you use to run your promotions is
one of the most crucial decisions for anyone
What sets it apart is the additional ‘gamified’ looking to run their own gamified sales
mechanisms that trigger the brain’s promotions. Before you launch your first
dopamine reward system. This is usually campaign, you need to consider which
triggered when we experience something techniques you want to use.
exciting or complete an achievement.
Because gamification makes use of a
This reward mechanism is what makes number of different promotion techniques,
games fun and rewarding. But it can also be the best option is usually one that’s more
triggered by incorporating elements of versatile. It’s this interconnection of different
games into the shopping experience. promotion features that gets results.

The value of the worldwide gamification

market is forecast to be $11.94 billion in 2021.
- Statista

Promotion Gamification: How and Why It Works 5

Inspiration From
Southeast Asia
Gamified promotions are hugely
popular in Southeast Asia, where
brands use them to great effect.
When it comes to gamified promotions and
shopping experiences in general, one region
in particular is way ahead of the game.
Brands throughout Southeast Asia
incorporate gamification into many different
aspects of their shopping experience.
There’s a lot that brands in other regions can
learn from the Southeast Asian way of
gamifying promotions. It helps sell more
while also increasing brand reputation in the
eyes of existing and potential customers.
Gamified shopping experiences help
brands bring a degree of excitement that
online shopping typically used to lack.
69% of individuals in Southeast Asia regularly
shop online with a mobile device. The global
average is just 53% - Globalwebindex 2019
Promotion Gamification: How and Why It Works
In Southeast Asia, gamification is common
practice among luxury and mainstream
brands alike. Consumers in the region are
now used to interacting with gamified
features when they go to shop online and
when they shop in store.
In fact, gamification is now so prevalent that
brands can risk falling behind competitors if
they lack gamification in at least some small
part of their marketing/sales operation. This
is partly because mobile purchases are
significantly more common in Southeast
Asia than the global average. And where
there are lots of online shoppers, there are
countless opportunities for gamification.
6
Tiered/Daily
Rewards
Rewards, points and incentives can
be given to customers periodically to
encourage repeat purchases.
Daily rewards may not be the flashiest
gamification technique, but they’re very
effective at encouraging customers to spend
regularly. To work they need to be part of a
properly implemented loyalty program.
This type of gamification involves giving
customers points or rewards for daily/regular
interactions with a brand. The interactions
involved aren’t necessarily just purchases,
they could also be visiting an online store or
using an app. For every completed action,
the customer gains points or rewards. These
rewards usually accumulate as the customer
returns and completes additional actions
over a given timeframe. This technique
serves two main purposes - pushing
customers towards a brand’s own
business objectives, and also rewarding
them for their loyalty.
Promotion Gamification: How and Why It Works
Achieving business goals
You can steer customers towards certain
behaviors and/or purchases depending on
what incentives you offer them. For example,
if you want to get rid of excess stock of one
particular product, you could include a 50%
discount on that product as a reward that
your customers can work towards, e.g. after
using your app four days in a row.
Rewarding customers
Daily rewards are also a great way to give
back to your customers and make them feel
valued. Depending on the type of rewards
you include, which customer segments you
target, and which loyalty tiers you focus on,
you can improve brand loyalty among any
specific customer group.
7
Target-Based
Rewards
Rewards, points and incentives can
also be tied to targets to encourage
customers to spend.
In a similar way to daily rewards,
target-based rewards use clear goals to
encourage customers to complete certain
actions or behaviors. Where daily rewards
focus on regular interaction with customers,
target-based rewards set specific goals
related to spend and other customer actions.
Most of the time this kind of reward is linked
as part of a loyalty scheme to track customer
progress in relation to the promotional goals.
For example, a brand may run a promotion
that offers customers a $20 coupon for every
$200 they spend. This is a simple promotion
in itself. But they could add additional
targets to increase the incentive over a
longer period of time.
Promotion Gamification: How and Why It Works
This initial offer could be altered as follows:
● Target: $400 spend over two months
● Reward: $40 coupon + 50% for every
additional $200 spent
This new offer adds a clear incentive for
customers to up their spend over the two
month period, as the coupon amount
offered with every additional $200 spent
increases significantly.
Again, target-based rewards don’t just have
to be related to the amount of money
customers spend. You could also link the
rewards to Facebook likes, number of friends
referred, number of different product
categories bought, etc.
8
Loyalty Tiers

Loyalty tiers are essential to keep

customers interested in the rewards
you have on offer.

Loyalty tiers are another very important

mechanism that can be used to encourage
customers to work towards any specific
target. A loyalty program with a single tier The consecutive tiered rewards could look
will be much less effective than one with like this:
multiple tiers where each have their own
unique perks and incentives. ● Bronze Tier - 20% off $200+ shops
● Silver Tier - 25% off $200+ shops
The key is to offer increasing incentives as ● Gold Tier - 30% off $200 shops
customers rise through the ranks of your
loyalty programs. This way customers know
what they’re working towards and they To facilitate movement between different
know what they’ll be getting once they’ve tiers, this mechanism needs to be tied to a
reached their goal. loyalty points system. Creating your own
branded points system can aid your

The incentive of larger gamification experience significantly.

Instead of using simple unbranded credits or
discounts encourages a real-world currency, you can design your

customers to stick with own loyalty currency to fit your overall brand

image or loyalty program-specific
a brand over a longer messaging.
period of time.

Promotion Gamification: How and Why It Works 9

Stamps & Badges
Stamps and badges are a popular
gamification method that help bring
out customers’ inner collector.
Gamification options have been increased
massively thanks to the rise of digital
technology and shopping. But there’s still a
significant role for gamification in offline
situations too.
Take a simple stamp loyalty card as a basic
example. Many establishments, like coffee
shops, offer customers a free drink after
they’ve bought X amount of coffees. This is
effectively the physical version of
tiered/daily rewards mentioned earlier.
Coffee Card
Free
Coffee!
Promotion Gamification: How and Why It Works
This type of promotion is easy to implement
digitally. But giving customers a stamp card
where they can see their progress and watch
stamps being added in person makes this
gamification technique more tangible.
This is the same idea behind special edition
products that are only available to top
customers. Collectable badges and stamps
can also be replicated digitally to evoke
the the same feelings when customers shop
online. Just like games give players awards
and badges for completing certain
objectives, businesses can set up badges for
customers when they complete certain
actions. For example:
10
Gamified
Experiences
Many brands now use gamified
experiences to increase their brand
visibility.

The gamification examples we’ve talked

Gamified apps
about so far are usually employed to
encourage some form of purchase Gamified experiences are most commonly
behaviour or customer action that tangibly served to customers via app. Rather than
benefits the business. But sometimes incorporating a game into an online
gamification is simply used to provide webstore or store app, standalone apps
users with an exciting or fun experience, specifically for gamified experiences allow
without explicitly trying to encourage a brands to draw a clear line between the
purchase or exchange of money. experience and their sales operation.

This gamification technique is particularly
popular among luxury brands, where brand
image and customer loyalty is a more
important consideration than in many other
business models. Again, this type
gamified promotion is big in Southeast Asia,
where luxury brands have a big presence
among middle class consumers.
A ‘gamified experience’ can be one of many
different things, from apps, to contests or
real life games.
Take Nike’s ‘Nike Run Club’ for example. Nike
created a full, standalone app with a range of
special features specifically for runners.
Rather than being geared towards selling
of Nike’s products, the primary purpose of the
app is to provide a fun, engaging user
experience. There aren’t any obvious
purchase options in the app. Instead, it’s part
of a wider, longer-term marketing strategy
that aims to increase Nike’s brand image.
Importantly, the app is free and you don’t
have to be a Nike customer to use it.

Promotion Gamification: How and Why It Works 11

Arcade-style games
While most of the gamified experiences
created by brands are now digital, there are
still many examples of real-life physical
games or experiences that are also designed
for the same purpose. This type
gamification is particularly popular in China
where it has proven a hit with the millennial
and Gen Z age groups.
Many brands have created their
versions of classic arcade games
customers can play to win products. For
example, Chanel developed a series of
arcade games which toured Asia as the
‘Coco Game Center’ back in 2018. Customers
could play a claw game to win samples of
Chanel’s new lipstick colours, a driving game
and even a Chanel-themed Guitar Hero-style
music game.
Chanel invested a significant amount of
money to create the Coco Game Center and
transport it to numerous cities across Asia.
But it’s a prime example of the power of
marketing and brand awareness, as it’s
still being talked about as an excellent
marketing campaign two years later.
Promotion Gamification: How and Why It Works
Competitions & giveaways
Many brands also use gamification to make
competitions and prize giveaways more
attractive. Prize giveaways are one of the
oldest forms of gamification because they’re
of simple to run and immediately eye-catching
to consumers. But, with the help of digital
platforms, modern prize competitions can
be made even more exciting.
own There are all sort of ways you can add
that additional elements to a standard prize
giveaway. For example, you could add some
sort of location rule via a geofence to get
customers to travel to certain locations in
order to participate.
Alternatively, you could offer customers free
entry into a prize giveaway, but only if
they’ve spent a certain amount of money
with you over the past two months. This way
you’re introducing an additional incentive to
encourage customers to spend. You’ll also be
able to balance the cost of your prize
giveaway with the amount of money you
expect to gain from increased sales. The key
to making this kind of gamified promotion
more effective is creativity.
12
Shopping
Gamification
Smaller gamification techniques can
be employed throughout your online
store.
Reactive messages

Alongside larger gamification mechanisms, While they’re not gamification in the typical
like loyalty programs and target-based sense, many brands use personalised
rewards, there are a number of smaller, more messages to encourage certain user
subtle techniques that are commonly used behaviours. This type of promotion can help
by businesses to add a level of gamification frame a brand in a positive light because it
to their online experience. shows that they’re reacting to the user’s
behaviour in real time. For example, if a user
Gamified webpages has items in their cart, but they’re taking a
while to complete the purchase, you could
Brands often gamify their websites or apps apply a discount to their cart and let them
with interactive graphic elements, know via a custom notification. The logic for
personalized messages and other subtle this promotion would look like this:
techniques to make the user experience
more enjoyable. These techniques often go ● IF customer has ≥$70 worth of items
under the radar, but they can play a in cart
significant role when it comes to spreading a
● AND no purchase completion within
positive brand image and encouraging 20 minutes
customers to shop with you.
● THEN apply 10% discount to current
cart
Small features like this all add to the
● AND custom notification: ‘For a
general user experience and their limited time only: 10% off everything
satisfaction with a brand. in your current cart!’

Promotion Gamification: How and Why It Works 13

Gamified Loyalty
Programs
Loyalty programs form the basis of all
good gamified promotions because
they track customer achievements.

All of the separate gamification techniques
we’ve already discussed can be combined as
part of a loyalty program to give customers
the ultimate gamified shopping experience.
To successfully gamify objectives and targets
over a longer timeframe, you need some
way to track and store customers’ progress.
That’s why loyalty programs are ideal.
They can track customer profiles, loyalty
points, loyalty tiers, collectable badges
and much more.
Working out how you want to fit each of
these separate elements together under one
loyalty program can take a bit of planning.
But the payoff can be significant. According
to Harvard Business Review, increasing
customer retention by just 5% can increase
profits by 25% - 95%.
In conclusion
There are many different gamification
elements that brands can incorporate into

Rather than simply adding gamified their online and offline operations. But

elements to an online shop where user data generally, the more interlinked these

is less available, tying the gamification to a elements are, the better. That’s because the

loyalty program allows you to build a much data they provide about customer trends

better picture of the kinds of products, and shopping habits is highly valuable when

promotions, and gamified elements each of it comes to planning ahead and increasing

your customers is interested in. your sales in the long term.

Promotion Gamification: How and Why It Works 14

Talon.One’s
Solution
The Promotion Engine allows you to
tailor loyalty programs as much, or as
little as you need to.

Setting up and running all the gamification

examples mentioned above is quick and
simple using Talon.One’s Campaign
Manager. Loyalty programs can be
combined with any other incentive you like
to offer the most relevant and compelling
rewards to your customers.
With the Promotion Engine you can adapt
the inputs and outcomes of your campaigns
to meet your current business goals, and
adjust them accordingly using the wide
variety of customization options.
Many promotion services are restrictive in
their customizability and the number of
integration options they offer.
At Talon.One we understand how important
these options are when it comes to creating
promotional campaigns that provide value
to your business.
We don’t limit the functionality of our
software, because we understand that the
ability to personalize is key to building and
running successful promotional campaigns,
whether you’ve opted for referrals, coupons,
loyalty programs or all of the above.

Book a demo online today and discover how to

build a loyalty program with Talon.One.

Promotion Gamification: How and Why It Works 15

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