A simple guide on how to set up a loyalty program and introduce some gamification elements

1. LOYALTY PROGRAM AND
GAMIFICATION – A SIMPLE GUIDE
Massimo Bellato

2. OVERVIEW
• With a loyalty program you can understand users behaviour, needs and you
can influence their purchasing history and future interaction with your brand
and your company.
• Customer loyalty is a pillar and a must have strategy to increase your
business development rating.
• In every company, customer acquisition is 5 to 10 times more expensive than
loyalty activities and it creates more revenue on the long period.
• Based on a regular average cart value in every ecommerce envronment, a
loyal customer could make 60% more purchases than a new user.

3. MAIN GOALS
Increased
Revenue
Retain
Customers Target
Marketing
Behaviours
Increase
Spend &
Frequency
Build Brand
LoyaltyBuild
Customer
Relationship
Differentiate
vs.
Competition
Acquire
New
Customers
Gain
Customer
Insight

4. ACTIVATION PATH
Step 1:
Loyalty
basic
actions
•Returning
customers
•Acquisti/ven
dite
ricorrenti
Step 2:
Points
System
•User
retention
•Build visibility
and
advocacy
•Build WOM
through
Social
media
channels
Step 3:
Tier system
•Brand
Awareness
•Returning
customers
•Long-term
loyalty
Step 4:
Gamification
& Badging
•Engagement
•DB
segmentation

5. LOYALTY PROGRAM – BASIC
ACTIONS
•The first step to take is to set-up proper incentives and pay-back to your
customers. You could give them products, premium features or discounts on
your items catalogue.
• You’ve to focus on few goals:
• Increase the rate of user first purchase conversion
• Member get Member virality
• Increase purchase retention
• Increase the average cart value

6. Coupon €
20
Coupon
€ 5/ registered
friend
Coupon € 10
LOYALTY PROGRAM BASIC –
BASIC ACTIONS
For every user interaction inside your website, you should send him a triggered
email with the reward alert. You’ve to consider only few and fundamental
basic actions because every discount you give will be added to your CPA
(Cost per Acquisition) or CPS (Cost per sale)
User sign up
Every 250 € of
purchases
Friends invitation (E-
mail, referral codes
or friend from fb,
gmail, ecc…)
1° purchase of
invited friend
Coupon € 5

7. SCORE SYSTEM
The rewarding system is only the first step on our path; With a score system you
can assign few points to every user for every action taken
Sales
Social
(Community
interactions)
Tier System
Gamificati
on
Score
System

8. SCOREBOARD & RANKING
For every action on your website, you’ve to choose wisely the number of points
to assign and the importance of that action.
Sign UP 3 30
Feedback 2 20
Purchase 3 50
Sharing
(prodotto,
look, ecc…)
1 5
Add to
wishlist 1 5
Invite friends
(per friend
registered)
2 10
Commentin
g a product
or a look
1 5
Follow 10
users 1 5
Action Rank Points
Virtual Wallet

9. VIRTUAL WALLET
•All the points earned will be cumulated inside a virtual wallet; Users could gain
more reward and prizes using that points.
Virtual
Wallet:
115
points
Sign Up
Product Upload
Purchase
Upload look
Sharing products on
facebook (like)

10. SCORE SYSTEM REWARD
Using score points with a virtual wallet, may give access to a series of real
benefit that will encourage the user to reiterate new actions:
• 200 points: € 5
• 500 points: € 10
• 600 points: Free Shipping on your next purchase
• 700 points: € 15
• 800 points: Visibility of one of its prod in the 'featured homepage area »
• 1000 points: € 20

11. If your userbase is large enough and if the previous loyalty steps are working,
you can introduce a Tier system loyalty program to grant for every user a
permanent benefit insider your website.
User make
some actions
User collect
points earned
inside his
wallet
User could
spend that
point to earn
benefits
Sum of the
points spent
Establish user
ranks
Permanent
benefit
TIER SYSTEM

12. MULTILEVEL SYSTEM
Novice user 0 – 4999
Junior user 5.000
Expert User 20.000
Guru 50.000
Level Points used

13. REWARD EXAMPLES
Tier system is used to reward the most loyal users and more active inside the
community; the benefits deriving from the level reached will be permanent
and it will affect the user perception to others. Here you can find few exaples
for a fashion brand tier system:
• Fashionist: Invitation to the halls preview of Private Brand: the user is notified
before any other products that will be on sale in advance of receiving a
newsletter through which to purchase the products already discounted
• Trendsetter: Free shipping on orders over € 200
• Style Guru: 5% discount on purchases over € 150

14. GAMIFICATION & BADGING
The playful aspect is an environmental aspect that , if introduced, allows you
to entice users to make more willingly the required actions.
Through the badges , users are identified and profiled and exposed in a public
rank that could be used to push competitiveness among them.
In this case, in addition to achieving tangible prizes , there will be some badges
(Foursquare like) that will identify each user on the basis of the actions taken
and progress achieved.

15. MAIN GOALS
The main goals to achieve through the introduction of badging system are
different:
• User base profiling
• User engagement
• Active user increasing
• Brand Awareness
• Word of mouth

16. BASIC BADGE SYSTEM
The first group of badges could be related to your tier system rank.
Guru
Junior
User
Novice
User

17. ADVANCED BADGE SYSTEM
You can evolve your badge system creating some advanced badges related
to more complex actions of the user:
• Brand followed (if you’re an e-commerce)
• Number of products purchased
• Number of likes or reshars
• Number of posts (in a forum or a community)

18. GAMIFICATION PLATFORM