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Leading in Local: Game Mechanics Can Help Drive Customer Loyalty

I am at the BIA/Kelsey Leading in Local conference in Austin, Texas and I got to hear an interesting session Wednesday led by Seth Priebatsch, CEO of LevelUp.  Seth is an avid gamer and during his discussion I was surprised to hear how he is using game mechanics in his business in order to drive customer loyalty for his clients.  His company is a mobile payment platform with over a million users and 5,000 participating merchant locations and at the core of their business are three game mechanic techniques:

  1. Sunken Reward: Reward given based on visit to location or discovery which is proving to be more compelling than coupons.
  2. Progression Dynamic:  Completing an activity over and over again to gain rewards. This drives loyalty by reinforcing repeat customer behavior.
  3. Appointment Dynamic: Customers must return at a predetermined time to take action on a discount/deal. Potentially drives business during slow periods/seasons.

According to Seth, these techniques are often found in games that he plays and he saw an opportunity to use these techniques in the business world.  In addition, he shared some statistics that further support why it is no surprise that game mechanics are showing up in the business world. For instance, the average age of a gamer is 35 and 34% of heads of households play games.

Seth also talked about how credit cards typically charge a small flat fee per transaction, but technology and legislation are driving mobile payment transaction costs down to zero.  Having no transaction cost has been a differentiator for LevelUp’s success.

LevelUp trades the cost of moving money for transactional data, which creates opportunities for them to assist clients with insights mined from the data.  It was interesting to hear about transaction marketing and just how powerful the insights are in helping SMBs win more customers and get more revenue out of each one.

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