Industry Update
Opinion Article26 January 2015

Gamifying your loyalty program

By Larry Mogelonsky, Managing Director Hotel Mogel Consulting Limited

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The web and software world has embraced 'gamification' over the past few years as websites and mobile apps find ever-craftier ways to incorporate gaming mechanics into their platforms. The goal is simple: heighten consumer interaction by making the platform more exciting. It's something that video games do especially well; by capitalizing upon our desire for instant gratification, these systems can go from amusing to addictive.

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When was the last time you heard of a loyalty program described as addictive? In a hotel context, probably never. Most of the time, these programs are supplemental to emotional consumer drivers; guests select a hotel brand with the loyalty program seldom acting as the primary reason for continued brand affinity.

What if you could design a loyalty program that was so enticing, it became a talking point on par with the main features and amenities offered by your brand? What if your loyalty program commanded the attention of its users and actually deterred them from looking elsewhere? When we talk about gamifying a product, part of what's implied is personal customization – the ability to modify what each individual receives from loyalty program membership to suit his or her particular needs.

Loyalty a la carte

Think of loyalty program customization as loyalty a la carte. Guests can choose, for instance, three benefits to receive from a list of ten (think free WiFi, complimentary buffet breakfast, dry cleaning and shuttle service access). And because they are selecting what best appeals to them, they will have a higher degree of fulfillment as they are the ones in the pilot seats of their experiences.

You could also add in a premium section (such as a complimentary dinner, free spa treatment, session with a personal trainer and so on) and customers would have the choice of two from the initial list of ten plus one premium extra. This premium section could also be used as an incentive for splitting your loyalty program into the free version and the one for those who pay a monthly subscription, with only the latter receiving access to the upper-tier options. In the app world, this bifurcation of services is often called "freemium."

It's easy to sign someone up for loyalty membership. But this is the equivalent of getting your foot in the door – more is needed to keep consumers' interests. A la carte bonus menus can act as the hook to obtain this retention.

Learning from the best

Gamification is customization taken a step further. If you want to learn how to gamify an a la carte system, you need only look to possibly the most addictive video game series around – "Call of Duty" and its perks system. The gist of it is that the more you play the more perks, or character enhancements, you can access. But in application, it's far more elegant than that.

To hark back to the abovementioned a la carte example, suppose that instead of free loyalty membership giving you the ability to choose three out of ten potential benefits, it only gave the option of two out of five. But, once you have stayed, say, five nights, the last five modifiers would be unlocked, and then when you stayed another five nights you would be able to select three out of those 10 perks. Beyond this, you might even add another five lucrative bonuses that are only available to those guests who have stayed 20 total nights with you.

The key here is that the system is cumulative. It's different from a 'stay five nights get one night free' promotion in that once the complimentary room night is achieved, the game resets and customers have little incentive to play again to obtain the reward a second time (apart from the fact that they think your product is superior to all others around). With an a la carte perks system that unlocks at set increments, there's a higher degree of emotional investment on the part of the guest. Each time a person checks their loyalty program profile, they'll know exactly where they stand and what they need to level up.

Then there's the issue of reward costs. How do you balance the costs of redemption? Or, more importantly, who does the balancing, the brand or each individual property? How do you find parity when different hotels have different owners? This is a critical impediment to any gamification upgrades to your loyalty program and something that will require ample does of arbitration. But with the proper rewards stratification, a compromise can be reached.

The bottom line

Loyalty usually denotes someone who allies predominately with one brand and only one brand. Nowadays, membership in a loyalty program does nothing to deter customers from going elsewhere at anytime. You need to design something that catches and commands attention, especially amongst the growing numbers of millennial consumers. Having incrementally unlocked levels within your newly gamified loyalty program may be just the trick.

Larry Mogelonsky

The world’s most published writers in hospitality, Larry Mogelonsky is the managing director of Hotel Mogel Consulting Limited. His experience encompasses hotel properties around the world, both branded and independent, and ranging from luxury and boutique to select-service. Larry also sits on several boards for companies focused on hotel technology.

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