Everyone wants new business. But sometimes we get so wrapped up in trying to predict what the next great lead-gen tactic will be, we forget that new business doesn't come just from new customers. It also comes from your current customers, and it's a lot cheaper to acquire, to boot.
Most marketers have undoubtedly seen the Bain & Company study that put hard numbers to the new-versus-existing-customer conundrum: it's six to seven times more expensive to gain a new customer than it is to retain an existing one, and a 5% increase in customer retention can boost profit from 25%-95%.
You can always try to make your customers happier by sending them free goodies, responding to emails quicker, and smiling more when you see them, but odds are that any gains you'll see aren't going to move the needle much. It takes more than extra elbow grease on your part—it takes a new approach.
The practice of adding game mechanics to your marketing arsenal will accomplish more than adding a bit of fun: It adds incremental value. Here are three ways to make your existing customers more profitable via "gamification."
Give as often as you take
Haranguing customers with emails, newsletters, and other sales materials that all contain the message "Buy more from us!" can easily lead to customers buying less, as become annoyed and disenchanted with your brand. The value equation for this scenario is unbalanced: customers see more value only if they buy more. However, by applying strategic game mechanics, you can make customers feel as if they're being rewarded immediately and continuously from your communications. In turn, they'll be more inclined to buy because they feel you've been giving them value all along.
One way to start is by looking at your email marketing. What can you do to add more value there? Asking your customers to read your copy is asking them to perform work—often boring work with little or no immediate payoff. So start by cutting your copy in half. Then cut it in half again, and make what's left more focused and interesting.
Next, figure out two things: What is the one action you want the recipient to take after reading this email, and what are you willing to give them for it? If you're trying to get them to make a purchase with a free training incentive, back that train up and do something a little unconventional: Make them earn it. Studies have shown that people actually enjoy something more if they've earned it rather than if they're just given it.
You can foster some emotional buy-in from your customer by including a few obstacles in the path that allow them to earn whatever it is that you're willing to give away for free—free training, extra storage on your cloud-based solution, a unicorn, whatever. These obstacles could be something as simple as completing an entertaining survey or trying out a new add-on service.
A fitness center, for instance, sends a short email challenging members to crack a numerical code included in the email. Those who figure it out within 24 hours earn two free personal training sessions. The email would be only one or two sentences long, and it would provide simple clues. Recipients would be intrigued and motivated to solve the mystery. Once they do, they end up walking away with a shiny new goodie they've earned, and you walk away with an existing customer whose loyalty to your brand just increased or an engaged prospect. In this way, you can bring both current customers and prospective ones closer to an up-sell.
Reward at the intrinsic level
Many companies have adopted a version of the rewards programs pioneered by the hospitality and travel industry decades ago. These marketing efforts typically offer one of two rewards (or even both): promotional rewards, like tchotchkes and discounts, and epic rewards, like a sweepstakes for a free car or vacation. Using the principles of gamification, you can offer yet another set of rewards, ones that video game designers have been tapping into for years.
Typical promotions and loyalty programs are limited because they offer superficial value: namely, stuff. The fleeting thirst for stuff rarely creates sustained revenue or loyalty. People also crave the excitement of a quest, the feeling of accomplishment, and the connection of community collaboration—these are the things you could layer into your marketing efforts instead of pricey giveaways.
Traditional promotions and loyalty programs often fall flat in providing this deeper level of reward, but properly constructed gamification campaigns channel these intrinsic motivators to create sustained, measurable growth.
So instead of giving away another TV as a grand prize, layer in some intrinsic rewards throughout your campaign to add meaning and drive long-lasting engagement. If your open and click-through rates are low, consider a gamified marketing campaign that transparently tracks those behaviors. Then send each customer who reaches a certain level of opens a personalized invitation into your brand's elite membership club. Take it one step further by giving each new member a personal shout-out on Twitter. Both these rewards satisfy the intrinsic human needs of esteem and belonging.
Also, think of the behaviors you want your target to perform, like watching a video that deepens their understanding of your value proposition. Then add game mechanics that reward them for doing so. If the audience fits, consider a countdown timer tied to an interactive training task that delivers a clear sense of accomplishment when they beat the clock to learn a new feature. The upshot? Say hello to a more loyal and profitable customer.
Get inspired by fresh game mechanics
You have dozens of game approaches to choose from. So why do most industries keep using the same two or three? If you are a company that already has a loyalty program in place, spice things up with a fresh gamified spin. Say you're a grocery store and want to collect data on your customers, you might create a loyalty card program that offers discounts on price-inflated products. That approach has become ubiquitous in the category. Get a little creative, and see what you can give your customers besides a few cents off each purchase.
Consider taking a familiar game, like golf, and use those rules to shape the grocery shopping experience. Establish that each aisle is a hole with a hidden product you want your shoppers to buy, and give shoppers clues to what the product may be using simple floor graphics. If they buy one of the items, they get a birdie, two of the items an eagle, and if they don't purchase the item they get a bogey. As the shoppers collect their items over multiple trips, they establish a handicap that applies an incremental discount to their purchases.
* * *
So what's different here from a standard promotion? Primarily, it's the unique combination of game mechanics that fit together to form the intrinsic motivation to play the game: deciphering the clues, completing your scorecard, improving your handicap, etc. It's this difference that sets gamification apart as a fresh way to jump-start sustained growth from your existing customers—and pick up new ones in the process.
No marketer should engage in a gamification campaign simply because it's the newest shiny toy. They should do it for results. Gamification is still in its infancy, but the intrinsic motivators woven into gamified campaigns can be that missing link that keeps existing customers engaged while also bringing new customers into the fold.