Gamification creates unique opportunities for small businesses to create innovative loyalty programs that are on par with large brands.
For 200 years, enterprising small and medium businesses have been experimenting with loyalty programs. From the 1890s mercantile to the organic coffee shop in your neighborhood, the dominant thinking around small-business loyalty has been to offer buy ten, get one free.
This model has been so successful that over 90% of loyalty programs by sheer number are buy-ten-get-one.
Simplicity rules the day in small business, and the punch card couldn’t be easier to produce and manage (VistaPrint will even give you cards for free). Consumers also immediately understand how the program works, and each stamp or punch is an opportunity to reinforce the store’s message.
But while a 10:1 program is easy and cheap to both implement and manage, small businesses leave a lot of opportunity on the table when they issue punch cards.
Unlike the large-scale airline, hotel, credit card or merchant loyalty programs they emulate, small business loyalty often lacks the critical engagement rewards that users value so highly: a set if benefits I call SAPS: Status, Access, Power and Stuff.
Of course, punch card programs have the free Stuff, but Status (hierarchy markers), Access (rewards they otherwise could not get) and Power (control over others) are stickier benefits that not only cost a fraction of what free stuff does.
As an example, while airlines can offer users access to priority lanes, lounges and better call centers, at minimal incremental cost, a cafe has historically had more limited options. Until now.
With the advent of Gamification, or the use of game thinking & mechanics to engage audiences, an exciting crop of new techniques and services have emerged that level the playing field for small business.
For the first time the cafe, auto-parts shop and small restaurant chain, can deliver engaging loyalty programs that rival the big guys. While loyalty programs still don’t come cheap, they certainly are a lot easier than ever before.
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