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How do you use gamification and incentives to boost customer retention?

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Customer retention is the ability to keep your existing customers loyal and engaged with your brand. It is a key factor for business growth and profitability, as retaining customers is cheaper and more profitable than acquiring new ones. But how do you keep your customers interested and satisfied in a competitive and dynamic market? One way is to use gamification and incentives, which are strategies that apply game elements and rewards to motivate and influence customer behavior. In this article, we will explore how gamification and incentives can help you boost customer retention and how to implement them effectively.

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Ro?ann “Roxy” N.

HealthTech Founder & Elected-Official | Special Advisor on Emerging Technology, Geoeconomics, and Democracy | Board…

1 What is gamification?

Gamification is the use of game design principles and mechanics to create engaging and fun experiences for customers. Gamification can include elements such as points, badges, levels, leaderboards, challenges, quests, feedback, and rewards. Gamification can help you increase customer retention by enhancing customer satisfaction, loyalty, engagement, and advocacy. Gamification can also help you collect valuable data and insights on customer preferences, behavior, and feedback, which can help you improve your products and services.

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Ro?ann “Roxy” N.

HealthTech Founder & Elected-Official | Special Advisor on Emerging Technology, Geoeconomics, and Democracy | Board Member
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Gamification is stellar for measuring customer behavior to understand what might be driving user engagement. When most companies deploy gamification tactics it is usually targeted at new customer acquisition vs a form of customer retention for existing users. LinkedIn articles and badges are a form of that. These features drive user engagement because your level of engagement is predicated on how much you participate in order to obtain a badge of honor. For LinkedIn this helps support the platforms push on using SMEs to driving meaningful conversations and create a more fruitful environment where original thought matters.

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2 What are incentives?

Incentives are rewards or benefits that you offer to customers to encourage them to perform certain actions or behaviors. Incentives can be monetary, such as discounts, coupons, cashback, or freebies, or non-monetary, such as recognition, status, access, or social proof. Incentives can help you boost customer retention by increasing customer value, satisfaction, loyalty, and referrals. Incentives can also help you attract new customers and generate word-of-mouth marketing.

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Mik Krams

Founder at Trace.Space
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We increase prices about every year but we let our customers stay on legacy pricing. They can commit for up to three years if they prepay.

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3 How to use gamification and incentives together?

Gamification and incentives can work well together to create a powerful customer retention strategy. Gamification can provide the structure and context for incentives, while incentives can provide the motivation and reward for gamification. For example, you can use gamification to create a loyalty program that rewards customers with points, badges, and levels for making purchases, leaving reviews, or referring friends. You can then use incentives to allow customers to redeem their points for discounts, free products, or exclusive access. This way, you can create a cycle of positive reinforcement and feedback that keeps customers engaged and loyal.

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Sherry Yin

CEO at Zhuzhou Sunshine New Material Technology Co.,Ltd (STEEL FIBER) Include melt extract steel fiber, cold draw stainless steel fiber, hook end carbon steel fiber, micro copper coated steel fiber etc(steel-fiber.net)
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Communication is essential in any customer retention strategy. Industrial enterprises should communicate regularly with customers to keep them engaged and informed about new products, services, and incentives. This can be done through email marketing, social media, or other channels that customers prefer.

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Ro?ann “Roxy” N.

HealthTech Founder & Elected-Official | Special Advisor on Emerging Technology, Geoeconomics, and Democracy | Board Member
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Think of it like this. Gamification drives user behavior, incentives reward that desired user behavior. This model amplifies customer retention subconsciously by promoting a subtle behavior change.

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Sihani Kaluarachchi

Marketing Coordinator | Business Strategist | Customer-Centric Leader | AML & KYC Compliance | BSc (Hons) | PGD in Business Management | Reading for MBA
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Incentives combined with gamification have the potential to greatly improve client retention. We can create a loyalty program in which users can track their progress through a digital platform and receive points for every purchase or interaction. Incorporating gaming features like leaderboards, achievements, and levels gives the experience a sense of growth and competition. Customers are interested and driven when they are given tailored prizes or access to special benefits when they meet specific goals or finish particular challenges. This strategy encourages customers to return frequently and show loyalty by making their experiences with our organization more engaging and pleasant.

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4 How to design effective gamification and incentives?

Designing effective gamification and incentives requires an understanding of customers, goals, and metrics. To start, segment customers based on demographics, psychographics, behavior, and needs. Identify what motivates, challenges, frustrates, and delights them. Collect data and insights through surveys, interviews, analytics, and feedback. Define objectives and desired outcomes for the customer retention strategy. Choose KPIs that align with goals and reflect customer retention performance. Track and analyze metrics regularly and adjust the strategy accordingly. Experiment with different gamification and incentive elements and combinations and use A/B testing, user testing, and feedback to evaluate and optimize the strategy. Keep the strategy fresh and relevant by updating and adding new elements and incentives.

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Ro?ann “Roxy” N.

HealthTech Founder & Elected-Official | Special Advisor on Emerging Technology, Geoeconomics, and Democracy | Board Member
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This is all logical and tactical advice which is great but in simpler words think about what behavior change or behavior pattern you are looking to see from your users. Now let's take a step back and go back the our customer journey mapping days and align the desired user behavior with that exercise. Now create objectives or goals rather on what outcome you are seeking for the user to be able to align it with KPIs that would be associated so that you can track/evaluate accordingly.

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5 Examples of gamification and incentives in action

Many brands use gamification and incentives to boost customer retention. For example, Starbucks has a loyalty program that rewards customers with stars for purchases, which can be redeemed for free drinks, food, or merchandise. Duolingo is a language learning app that uses gamification to make learning fun and engaging, with points, badges, streaks, and achievements for completing lessons, quizzes, and challenges. Nike also uses gamification and incentives to motivate and inspire customers to stay fit and healthy, with the Nike Run Club and Nike Training Club apps. These apps allow users to track their activity, set goals, join challenges, share their progress, and access exclusive content and products.

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Ro?ann “Roxy” N.

HealthTech Founder & Elected-Official | Special Advisor on Emerging Technology, Geoeconomics, and Democracy | Board Member
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LinkedIn has a gamification strategy that awards users with badges who participate in sharing thoughtful comments on these articles and get upvoted a certain amount of times by users for comments that they find insightful = gamification right here.

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How do you use gamification and incentives to boost customer retention?

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1 What is gamification?

2 What are incentives?

3 How to use gamification and incentives together?

4 How to design effective gamification and incentives?

5 Examples of gamification and incentives in action

Business Strategy

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How do you use gamification and incentives to boost customer retention?

1

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3

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1 What is gamification?

2 What are incentives?

3 How to use gamification and incentives together?

4 How to design effective gamification and incentives?

5 Examples of gamification and incentives in action

Business Strategy

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