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Loyalty & Gamification - The Growth Weekly - Issue #8

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The Growth Grind

January 23 · Issue #8 · View online

Your update on Growth news! 🚀


Hi you! 👋🏻
Welcome back to The Growth Weekly. I hope you’ve been liking the content so far. As always let me know what you think!
This week’s issue has been kickstarted by a reflection we had with a client on gamification & loyalty.

Loyalty & Gamification
What does it mean if a customer is loyal to your product? Does it mean that they return to use your product often? Does it mean that they’re not inclined to use your competitors product?
Does Starbucks care if you have a Douwe Egberts coffee every once in a while?
Does Starbucks care if you have a Douwe Egberts coffee every once in a while?
For example, does Starbucks care if you have a Douwe Egberts coffee every once in a while? They probably don’t. But that’s quite different for banks or telco companies.
We were asked to help a company in designing gamification for loyalty. But how do you do that? What’s the behavioral patterns at play?
So I explored this statement in the past week:
Loyalty = Habit-forming x Defensibility
Churn as the lack of both habit-forming or defensibility.
Churn as the lack of both habit-forming or defensibility.
To explore the habit forming part, we went all the way back to B.F. Skinner. His concept of operant conditioning laid the groundwork for habit forming practices. Certainly if you learn all about variable reward schedules, you can make people adopt certain behaviors very quickly. 🎰
But what you end up creating, is a rewarding system. It will work, but if you take away the (variable) reward, the behavior will die out over time.
Rewarding is creating behavior through operant conditioning.
Rewarding is creating behavior through operant conditioning.
I’ve written about defensibility a while back. It’s all about decreasing the likelihood that a user churns. This can be done, for example, by creating in-product value that is untransferable. Think about the musical preferences that fuel your Spotify recommendations.
But if you focus on defensibility for the sake of keeping your user where he is, you’ll end up in the world of dark patterns and trapping. Try deleting your Amazon account if you want to know what I mean.
Trapping as the exponent of focussing too much on pure defensibility.
Trapping as the exponent of focussing too much on pure defensibility.
So what you’ll need to create loyalty is a combination of both. It’s the most efficient way you will be able to redeem the benefits on your efforts.
Think about airlines. They combine occasional upgrades (variable rewards) with untransferable benefits that come with the gathering of air miles (defensibility). This really creates powerful loyalty programs. 🛩
Loyalty as the combination of habit forming and defensibility.
Loyalty as the combination of habit forming and defensibility.
And You?
How would your product benefit from increasing both habit forming and defensibility?
Let me know!
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