Loyalty 3.0: Forward in All Directions!

AND that’s a wrap!

If you have been following the blog series since its beginning, you now have a pretty clear idea of what Loyalty 3.0 is and how to implement it in your business. No matter how big or small your business is, Loyalty 3.0 is for you and, if implemented correctly, will create the best opportunity for you to connect with your clients and produce true customer loyalty.

As we went through the book, Loyalty 3.0 by Rajat Paharia, we learned the exact steps to creating a successful loyalty program in today’s world. The way that customer loyalty works today is completely different than how businesses previously thought, so businesses need to adapt to their consumers in order to gain their true loyalty. We have now found that instead of creating loyalty programs that are completely based on sales, coupons, and punch cards, businesses must focus on personalized relationship-styled loyalty programs with their customers.

At the beginning of the book, we learned that past loyalty program practices did not meet the mark of creating loyal customers. The customers were not really loyal to the brand or product, but more so loyal to the free products or coupon codes.

Since realizing that coupons and freebies did not successfully make loyal customers, Paharia (2013) explains that there are macro trends that are now dictating how companies form their loyalty programs. These trends include a more relational approach between companies and their employees and customers.

Throughout the rest of the majority of the book, there are three main topics that make up the bulk of Loyalty 3.0. These three concepts are motivation, big data, and gamification.

Motivation is what triggers humans to do things. Paharia explains that there are different types of motivators. There are intrinsic and extrinsic motivators that encourage humans to do things. The difference is where they stem from. Intrinsic motivators have to do with internal motivators. They are focused and given from within. For example, Paharia (2013) lists the five major intrinsic motivators: “autonomy, mastery, purpose, progress, and social interaction” (pp. 24–25). They are motivators that fulfill an internal goal set by the individual person. There are also extrinsic motivators that are external to the person, such as a reward, raise, promotion, etc.

Big Data is another important facet of Loyalty 3.0. Big Data is a large amount of data that is collected and stored. It is a wide variety of data that is used to gather important, and not important, data on customers and users of technology. Big Data can give a lot of important data to businesses that can be used to increase the usage of business products, engage audiences, and meet clientele where they already are.

The last of the three important concepts of Loyalty 3.0 is Gamification. Gamification is not just playing games. Gamification is a concept derived from video game design but implemented into non-gaming contexts. It is used “to increase user engagement, happiness and loyalty” (Rodriguez, 2021, para. 1). It includes using features like giving goals to accomplish, badges to earn, competition, leveling up, etc.

After gamification, Paharia talks through case study examples.

Finally, Paharia wraps up by explaining the need for a road map to successfully design a Loyalty 3.0 program.

Paharia, R. (2013). Loyalty 3.0. McGraw-Hill

Rodriguez, P. (2021). The Ultimate 2022 definition of Gamification. Growth Engineering. https://www.growthengineering.co.uk/definition-of-gamification/