Gamification in Loyalty Programs: Impact on Intrinsic Motivation and Consumers' Needs for Competence and Relatedness

Gamification in Loyalty Programs: Impact on Intrinsic Motivation and Consumers' Needs for Competence and Relatedness

João Pedro Oliveira, Paulo Botelho Pires
DOI: 10.4018/978-1-6684-5523-4.ch007
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Abstract

This research identifies the benefits that occur from the use of gamification in loyalty programs, particularly the degree of need satisfaction of competence and relatedness of individuals, as well as their intrinsic motivation to participate in the program. These may be preponderant factors for the engagement and loyalty of customers. The research was based on a questionnaire created around a leading European sports nutrition online shop, through which the influence of the gamification elements already existing in the shop was analyzed, as well as the influence of the introduction of new gamification elements on the behavior of customers. The results show that the inclusion of gamification elements does not influence the need satisfaction of competence and relatedness of individuals and that also does not influence their intrinsic motivation to participate in the activities. Its use in an online shop context is therefore ineffective.
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Introduction

Changes in consumer needs, as well as their behavior, raised new challenges to organizations (Gomez-Suarez et al., 2017; Martinez-Ruiz et al., 2017). Once they have acknowledged customer behaviors and patterns, marketing strategies were adapted, particularly how they communicate with the customers and the type of value delivered to them (Martinez-Ruiz et al., 2017; Verhoef et al., 2010). One of the strategies used to strengthen the relationship with customers is the use of gamification (Werbach and Hunter, 2012; Yang et al., 2017). Gamification is the use of elements characteristic of games in a distinctive context (Deterding et al., 2011), and in recent years it has become widely used in the business environment and in applications to improve learning or physical activities (Bunchball, 2010; Deterding et al., 2011; Seaborn and Fels, 2015).

Profound innovations have allowed for significant improvement of the games which triggered a massive societal embrace of the gaming world (Association, 2017; McGonigal, 2011; Newzoo, 2017). Thus, game mechanics quickly were internalized by society (Bunchball, 2010; Mora et al., 2015) and many organizations saw gamification as an opportunity to create competitive advantages, using it in their business strategy (Bunchball, 2010; Werbach and Hunter, 2012; Yang et al., 2017).

Since gamification is still a relatively new concept (Hamari et al., 2014; Werbach and Hunter, 2012; Yang et al., 2017), the scope for scientific research is still very broad (Seaborn and Fels, 2015; Yang et al., 2017). One of the overlooked topics focuses on the effect of their use on consumers' needs for autonomy, competence, and relatedness, needs that are advocated by Ryan and Deci (2000) as primary human needs. Therefore, it is pertinent to explore this aspect, as well as its effect on customers' intrinsic motivation because if gamification can stimulate intrinsic motivation, then its use may prove very useful, as it leads to customer loyalty that is not exclusively dependent on the promotions and rewards that the brand provides them. This study is also relevant because the number of gamers increases year by year, as well as the revenues from game sales (Association, 2017; Newzoo, 2017, 2021). It is a fact that consumers are increasingly adopting this type of entertainment and therefore the use of game mechanics and elements can become increasingly advantageous in the business environment.

This study has two main objectives. The first is to verify in a loyalty program context whether the introduction of specific elements normally associated with games, such as leaderboards and rewards, may have a positive effect on the satisfaction of two of the three needs mentioned by Ryan and Deci (2000) as essential to the human being: the needs of competence and relatedness of consumers. The second objective of the study is to analyze whether the need satisfaction of competence and relatedness positively influences the intrinsic motivation of consumers to participate in loyalty programs.

Key Terms in this Chapter

Gamification: The application of elements of game playing (e.g., points, scoring, competition with others, etc.) to other areas of activity, typically as an online marketing technique to encourage engagement with a product.

Need for Relatedness: Individuals' inherent propensity to feel connected to others.

Customer Loyalty: Measure of a customer's likeliness to do repeat business with an organization or brand.

Customer Satisfaction: Measurement that determines how happy customers are with an organization's products, services, and capabilities.

Customer Engagement: That focuses on improving the commitment that customers have with a brand by delivering personalized messages and interacting with customers across channels.

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