Mobile Loyalty 10/16/10

Foursquare and Gowalla educated the market on mobile gaming, check-ins and rewards. Facebook is now taking full advantage of the trend with their launch of ‘Places’ and ‘Deals’. As smartphone adoption grows and location based applications proliferate, the gap between online and offline marketing is getting smaller by the day.

Source: Wikipedia.org

The principle is simple: Perform an action, get rewarded and attain new heights:  stuff, power, access and status.  Get a rush of endorphins, an ego boost and bragging rights. We are competitive and territorial by nature and we seek out opportunities to express these traits.  Some of us prefer material possessions,while others are more interested in VIP access. I have been participating in loyalty schemes for years. I make purchases at specific stores with a specific credit card to earn points to get me to my reward goals faster.

A loyalty program does not necessarily have to be a formal card program.  It can simply be a case of visiting the same restaurant where you are friendly with the owner and she rewards you with a free glass of wine or a discount on your meal.  With formal programs, the best ones have SMART (Specific, measurable, attainable, relevant and time-bound) reward targets.

We are all driven by pain and pleasure stimuli and a good loyalty program is one that is designed to condition our behaviour towards achieving a goal that is aligned with a brand’s strategic interests.  Our behavior can be conditioned in a manner similar to what’s been described in Ivan Pavlov’s famous experiment, where he conditions his dogs to salivate in response to specific stimuli.  This is the same way people can form new habits and adapt our behavior and also one reason why Daily Deal websites like Groupon and Grabaseat are so popular (The other reason being an inability to resist a bargain.)

Now game theory is penetrating our lives in new ways. As Springwise.com puts it:

Mobile gaming can help turn something we should do into something we want to do.

For example:  http://www.ridekicks.com rewards you for sharing car rides.  The more you share, the more points you earn towards grandiose titles like King of the Road or Captain Planet.  This is an example of Gamification, an idea that some consider to be the future of marketing.