[co-authored by Emily Murphy]

In recent inquiries and discussions with clients about intelligence-driven loyalty, my researcher Emily Murphy and I have gotten a lot of questions about gamification. Specifically, how they should — or shouldn’t — be incorporating it into their loyalty programs and strategies. Gamification is a pretty hot buzzword right now, and no matter what industry you’re in, you’ve probably noticed it being thrown around. Broadly, gamification is the application of gaming principles to a traditionally non-game activity in order to drive a desired behavior. As it relates to loyalty, gamification provides a way for marketers to encourage loyalty members to engage and to share information about themselves. For example, earning rewards points and badges for sharing products with friends on Twitter, filling out a poll about customer preferences, or checking-in on foursquare and Facebook Places.

Late last week, the newly formed partnership between Starwood Hotels and foursquare caught our eye. According to their website, members of the Starwood Preferred Guest (SPG) program “can collect more than just badges on foursquare” when they link their SPG and foursquare accounts. And while the perks are cool — 250 bonus points per check-in and chances to unlock a hidden Free Resort Night Award —the access to customer data is even more fascinating. When we dug into the fine print of SPG’s foursquare Check In Terms, we found that opting-in gives Starwood the right to receive lots of foursquare user data: from identifying information, badges, and mayorships to all check-in history. It gives them a richer view of how their customers act as it relates to travel and leisure: what cities they visit the most, their most explored categories, and what hotels they frequent — Starwood or not. All of this valuable information about customer behavior gets tied back into their SPG account. It's basically a back-door way to append social data to the customer database, creating a truly cross-channel view of customer activity. Pretty cool right? Right.

Of course, when Emily and I think about this in the context of intelligence-powered loyalty, a few questions come to mind:

  • What is the perceived value of the points? When people are conceivably already on foursquare willing to check in, what is the value of the reward they get in return?
  • How does Starwood plan to use the data? They have the opportunity to cut this data by loyalty level, geography, check-ins at Starwood properties, and check-ins at competitors. If used in the right way, these customer insights could really help Starwood with targeting and offer management as well as provide rich information on share of wallet.

We are planning to write more about gamification and loyalty in an upcoming report. What other examples of loyalty and gamification are you seeing? And what kinds of questions does it raise? We'd love to hear your thoughts here, or join the discussion on the CI community site on the same topic.