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Insight/ Emerging Media

Restaurant.com Bakes Gamification Into Its Loyalty Strategy

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by Christopher Krohn
President & CMO
Restaurant.com

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Article Highlights:

  • Restaurant.com’s strategic goals were to both reward loyal customers and motivate new ones.
  • Don’t jump on the gamification bandwagon simply because it’s cool. Start with a business conversation.
  • Design your gamification program by first considering your customers’ reality, and then work backward.

Restaurant.com is considered by many to be the original online dining deal site, paving the way for a new genre of e-commerce that only recently has reached maturity.

Unlike typical single-deal-a-day-sites, Restaurant.com offers 50,000-plus daily deals. Customers use our certificates to give as gifts, enjoy savings on dining out themselves, and discover new dining experiences where they live or as they travel.

At Restaurant.com, we have taken a close look at how we can customize our loyalty program to increase both customer acquisition and repeat purchases. Leveraging the company’s experience, we’ve also broadened our efforts to introduce innovative technologies into the marketing mix.

Last year, we began exploring ways to enhance our relationship with our large loyal customer base—those who make repeat purchases—and new strategies to expand the value proposition of our brand. Our challenge was twofold:

1. Historically, we’d been a one-size-fits-all company, treating all of our customers the same, from those making their first $10 purchase to those who spent $500 or more with us over the past three months. We recognized that it was time to begin customizing both our communications and our offers to members based on their lifetime value, account history, and life cycle.

2. Our core value proposition had always been the savings, but the idea of discovery—finding new and exciting dining experiences—became an increasingly vital part of our brand. We aimed to create more excitement and incentives around this idea.

After investigating several traditional loyalty programs—your typical earn-and-burn points systems—we discovered gamification as a more optimal way to achieve our strategic goals, while creating a more fun and engaging environment for our customers. We began working with Badgeville, which introduced us to the neurology and psychology behind gamification as a loyalty strategy.

Leveraging Badgeville’s Behavior Platform to power our Restaurant.com Rewards program, implemented earlier this year, we offer tangible customer rewards, but also leverage the “fun rush” customers experience when they “win.” We create even more powerful incentives, while avoiding the management overhead and financial implications of a traditional points program. As an added bonus, the Badgeville platform integrated quickly and easily into our existing site, allowing us to add the program with relatively little IT investment.

Gamification In Action
With Restaurant.com Rewards, customers earn points, badges, and rewards for completing specific tasks and missions. For example, our most popular badge is the “Sherlock Holmes,” which customers earn simply by searching for a restaurant. The most popular mission is “Creation Station” that challenges members to create an account, visit our home page, and search for a restaurant to earn rewards for completing all three steps.

Already, we’ve been very pleased with the adoption rate among our members. In just the first month, we’ve seen more than 100,000 active members each week. Of those, 71 percent have earned more than two badges, while 60 percent have three or more. In all, Restaurant.com Rewards members have earned more than 230,000 badges and more than 12 million points.

While it’s still early in our program, we’ve received great feedback from our customers, and positive comments in our social media channels and from our customer service points of contact. Perhaps even better: We haven’t received a single complaint or concern. For a marketer, that’s a huge win. From a technical standpoint, the program launched without a single bug report, so we’re very pleased with the integration on the IT front.

Over the course of the program, we’ll track not only customer activity, but also how this translates to direct sales metrics, including repeat purchase rate, customer lifetime value, retention, and other key performance indicators.

Lessons Learned             
We’re often asked by colleagues in the industry what advice we can share with companies exploring a gamification strategy. While each situation is unique, here are some lessons we’ve learned in launching Restaurant.com Rewards that may help set the stage for a successful implementation in virtually any industry:

1. Start by defining a clear set of objectives. Don’t jump on the gamification bandwagon simply because it’s the latest cool thing. Start with a business conversation: What business problem do you want to solve? As with any solution, don’t fill your toolbox with tools for which you have no practical use. Start from a strategic perspective and then identify tactics to help you achieve those goals.

2. Understand your target customers and what motivates them to use your product versus your competitors. Too often, brands design campaigns around a financial goal, and most fall flat because they failed to consider the customer’s perspective. It’s critical to define badges, levels, and missions that work in your favor from a CRM/lifetime value perspective and speak to your customers’ desires. Design your gamification program for mutual benefit by first considering your customers’ reality, and then work backward.

3. Gear the content to your brand. It seems obvious, but the content has to make sense with your brand positioning and message. For example, we don’t reward customers with airline miles for discovering a new restaurant. We reward them with the ChocoBerry Bliss Badge for shopping, sharing, and eating, “The Critic” status for writing reviews, and “The Social Maven” badge for those who share our deals on social media.

4. Consider partnering with a platform provider. Unless you’re a $10 billion e-commerce company, most of us are dealing with constrained IT resources. Tackling the build process on your own gamification system may not be the best allocation of those resources. Platform providers like Badgeville can offer customizable solutions that easily integrate with your existing site, allowing you and your team to focus on tasks that contribute to your core value proposition.

Take A Test Drive
I encourage anyone considering a gamification system to first participate in one to see how it works. Gaining this first-person perspective gives you an opportunity to experience those little dopamine hits the way your customers will—and that’s something you can’t get from a vendor demo. Participating in a gamification experience is the best way to see just how effective a well-designed rewards system can be at creating a win-win for you and your customers that boosts loyalty and fosters long-term relationships with real revenue results.

About Christopher Krohn

Christopher Krohn is president and chief marketing officer at online daily deal site Restaurant.com. The company offers savings at tens of thousands restaurants nationwide with more than 50,000 gift certificate options. To date, Restaurant.com customers have saved more than $500 million through its gift certificate program.

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