What drives customer loyalty – Interview with Steve Sims of Badgeville

Today’s interview is with Steve Sims, Chief Design Officer & Founder of Behavior Lab at Badgeville, the number one gamification platform for enterprises. Steve joins me today to talk about Badgeville, the work they do, customer loyalty and the motivation and psychology behind loyalty programmes.

This interview follows on from my recent interview: Customer loyalty is becoming a collective experience – Interview with Steve Abernethy of SquareTrade – and is number 112 in the series of interviews with authors and business leaders that are doing great things, helping businesses innovate, become more social and deliver better service.

Highlights of my interview with Steve:

  • Steve learned a lot about how you can get users/customers to do things, without monetary incentives, through his experience in the online gaming world.
  • To make a good loyalty programme you have to understand your user or customer.
  • Too many programmes are designed with the business in mind and do not take account of what the customer wants.
  • Also, too many businesses kid themselves into thinking that they are designing their programmes for their customers when they are not.
  • If you understand your customers, you can build a programme that allows you to build a deeper relationship at a lower cost and that delivers better results.
  • Incentives do not have to be financially based.
  • People like to feel smart, successful, socially valued and to have tribal affiliation. They also like structure as it eliminates risk and uncertainty.
  • Therefore, all of these things should show up in a programme depending on what the programme’s role is: brand affiliation, advocacy, community etc
  • If you are finding that a competitor is affecting your customers’ loyalty towards you through their price incentives, deals they offer etc then the problem is not with your loyalty programme. It is more to do with the brand affinity that you have with your customers.
  • Loyalty is more than price.
  • Loyalty has a lot to do with exposure and attachment.
  • The action of creating a habit or getting someone hooked on your product has do with need, a trigger/signal to complete an action, the reward they receive on completion of the action and the resultant emotional investment in the product they get. That is a cycle and that cycle tightens over time.
  • Therefore, the more positive experiences you have with a product or service then it creates a habit so when you have that internal crazing for something then you don’t think about it, you just ‘press the button’.
  • The reason that this happens is because people work on a conscious and sub-conscious (habit) level.
  • We live in a world of habits.
  • People pick/use things because of what it says about them but also what it says about what they want to be like.
  • Steve cites Apple and the Toyota Prius as great examples of brands that demand this type of loyalty.
  • Steve distinguishes between the tactical and strategic elements when it comes to building loyalty.
  • He believes that longer term sustained engagement is better, more effective and more valuable than episodic, marketing campaign based loyalty building programmes.
  • Understand people, understand their motivations, understand their context, understand frequency to make your loyalty programme work better.
  • People are always either going towards things that are rewarding to them or away from things that are threatening to them.
  • Therefore, understanding someone’s state of mind when pitching advertising or loyalty is key as it will help create emotional congruency or fit.
  • Habituation is the dulling of novelty.
  • Therefore, if you run the same loyalty promotion programme over and over again then over time novelty and interest falls and any programme will become less and less effective as people become more familiar with it.
  • However, good programmes will have a slower decay as compared to bad programmes.
  • To build loyalty, businesses need to get under the skin of what they really are and what they really mean to their customers.
  • The big trends that are going on right now that businesses should be paying attention to right now are:
    1. The rise in mobile apps;
    2. Making everything about me for everyone (personalisation); and
    3. Always on, always connected.
  • Steve’s shameless plug is for Headspace who he thinks are a great example of a business that understands its customers and builds exceptional loyalty and advocacy.

About Steve (taken from his Badgeville bio)

Steve Sims of BadgevilleSteve Sims is the Chief Design Officer & Founder, Behavior Lab at Badgeville.

Steve has 20 years of experience in game development and production for web, mobile, console and PC systems. He started his gaming career at Electronics Arts and EA Online where he was an Executive Producer and responsible for Madden NFL Football, the #1 selling sports video game franchise in North America, and EA’s earliest forays into the online space including Fantasy Sports and Casual Games. He has worked in the gaming industry since with notable roles including Director of Operations at Gemini Mobile Technologies and Vice President of Product Management and Service Operations at Outspark.

Check out Badgeville at www.badgeville.com, their Behavior Lab at www.badgeville.com/behavior-lab, say Hi on Twiiter @badgeville. Also, you can connect with Steve on LinkedIn here and find him on Twitter @stevebadge

Comments

  1. Interesting interview Adrian.

    The point that got me thinking was:

    The action of creating a habit or getting someone hooked on your product has do with need

    Which is a blindingly obvious statement, but one that is so frequently ignored.

    What do your customers need?

    James

  2. Thanks, Adrian. For me, the point that sticks out the most is this:

    “If you are finding that a competitor is affecting your customers’ loyalty towards you through their price incentives, deals they offer etc then the problem is not with your loyalty programme. It is more to do with the brand affinity that you have with your customers.”

    If your “customer loyalty” is based on price and discounts, I wouldn’t consider that loyalty at all.

    Annette :-)

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