James Walker, Railsr product manager (Rewards-as-a-Service) takes a close look at how companies are rethinking the way they reward their users.
eSports, mobile gaming and traditional entertainment gambling together make up the majority of the consumer gaming industry. In the US, mobile gaming alone is expected to be worth $80Bn by 2030. 1
Their demographic appeal is, of course, diverse. The average age of a mobile gamer is 362 versus. 51 for someone who physically frequents casinos3. Consumers live in different parts of the country. They have differing median incomes. And, this is reflected in how and where brands target their scarce marketing dollars.
But, many gaming organizations have common metrics they are trying to drive. This includes low cost of acquisition, high engagement, high percentage of users committing a first spend, high repurchase rates and high retention. And building loyalty is the common denominator that underpins all of these. If you get that right, the other metrics take care of themselves.
Despite their differing products and demographic targets, gaming companies are converging in how they reward to build loyalty. Industry norms are cross pollinating and both are taking best practices from behavioural science to nudge users toward activities they want to see more of.
Keeping it small and often
It is long held wisdom that small, consistent and attainable rewards are more likely to keep a long tail of users engaged, over one-off prizes for hitting major milestones. Even if a user does nothing else, it creates habits, keeps your brand top of mind, and gives you opportunities to market other products.
Across digital platforms, it’s common to offer users micro-rewards simply for logging in. Think learning streaks on DuoLingo, or attainment badges with Wordle. Digital casinos and mobile gaming are increasingly offering micro-dosing of rewards for repetitive use. Giving users badges, prizes and points just for turning up. This places less emphasis on traditional discounts (an extrinsic motivator), and focuses on intrinsic motivators that are proven to better sustain long term loyalty.
Gamifying redemption
Redeeming points for rewards has traditionally been static: users collect points and select from a catalogue of redemption items. This causes existing loyal customers to be fairly compensated, but does little to cause less loyal customers to convert. By gamifying redemption, gaming companies can increase the perceived value of their points, by giving users opportunities to win bigger prizes, without spending more. In the world of eSports, this manifests in loot boxes, in physical casinos, its spins on a prize wheel, and in mobile gaming, mystery prizes. This is being used as a powerful mechanic to increase uptake of a rewards program.
Time bounding loyalty
Tiering a user base according to loyalty is nothing new. Users who are most loyal qualify for a highest tier of benefits and the least quality for the least benefits. This is commonly held amongst casinos who offer their highest value users complimentary valet service, VIP experiences upgrades, extra plays and free rooms. And Airlines, who offer lounge access, free upgrades and discounts to their frequent flyers. But, your platinum status will of course time out if you haven’t flown in a year.
In eSports and mobile gaming, this is increasingly being adopted in the form of “Seasons” - think Call of Duty’s “Warzone”. Every few months, a new season of a game will be released, overwriting previous progress. Within each season, users are encouraged to earn points to move up loyalty tiers and gain new rewards, new skins and new access. After a period, the season times out and users can no longer gain these rewards. By timing out loyalty tiers and available rewards, this creates artificial scarcity that can drive immediate engagement.
Targeted segmentation
Across all forms of gaming, organizations are becoming increasingly sophisticated in segmenting users and leveraging demographic and behavioural data to build more complete views of their users. This allows organizations to define their highest value user segments and more importantly, those that have potential to be high value, but are not. This may be because they use a competitor, or are not fully engaged. Gaming organizations are using personalised rewards, discounts and promotions to accurately target these segments. This maximises the efficacy of dollars spent on rewards. As organizations get to grips with their data, they are trading in blunt instruments for surgical tools.
Engaging users away from the platform
Gaming companies of all types are increasingly concerned with how they keep their brand top of mind whilst users are away from their platform. It’s easy for users to slip away when there is high friction to engage. In eSports this might be developing new lines of short video content, in mobile gaming, by collaborating with other apps, or in physical casinos, by offering discounts at partner retailers.
Increasingly, gaming organizations are turning to their own financial products to help them achieve off-platform engagement. Financial products can be used on a daily basis, are a high touchpoint and generate invaluable user data. In return, a user can spend and earn rewards points toward a reward program they already derive value from. This is a win-win for gaming organizations and their users.
Despite differences in their target audiences, gaming brands are looking to each other and best practices in other industries to build rewards programs that are cost efficient, targeted and drive loyalty. We at Railsr are seeing a trend in adoption of embedded financial experiences to support these meaningful rewards programs and increase user engagement.
If you’re interested in learning more about how we can help build loyalty in gaming, our experts are on hand to provide advice and show how Railsr can help!
For anyone wishing to meet the Railsr team at Money 20/20 USA, please see here.
References:
https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.829.1462&rep=rep1&type=pdf#:~:text=In%20terms%20of%20gender%20distribution,gambling%20counterparts%20(51.2%20years).