Gaming is a universal pastime, offering a range of experiences from relaxing to thrilling and competitive. Whether it’s unwinding with Candy Crush, diving into The Last of Us, or enjoying the challenge of Wordle, games provide a much-needed break from the daily grind. Tech-savvy millennials and Gen-Z, spend an average of less than Rs 100 an hour daily on gaming. Hinting at untapped potential for entrepreneurs, who are making the most of this user base by engaging with them through effective loyalty programs.

Crucially, loyalty programs stimulate referral marketing, nurturing a positive community and driving organic growth as players invite others to join. An illustrative example is the exponential growth of Wordle, a simple word game that spreads rapidly through word-of-mouth, demonstrating how organic engagement can lead to significant success. A game that began with 90 users, grew to have millions of users and was eventually bought by the New York Times. To embark on establishing and managing effective loyalty programs and referral marketing, gaming brands can follow outlined steps tailored to their objectives.

With India’s gaming market expected to reach $8.6 billion by 2027, how can gaming brands embark on the journey towards setting up and managing the perfect loyalty program and referral marketing?

Zeroing in on your goals

While ‘growth’ may be the universal goal for all brands, the way to get there may differ – it could be through enhancing player retention, fostering a community, attracting new players, or a combination of these. But before one does that, it is important to invest a little time and effort into thoroughly researching precedents within the industry and gaining a sharp understanding of the player base’s motivations and preferences.

Design the Loyalty Program

A successful loyalty program offers tailored rewards based on player engagement and spending. For example, RuneScape’s Membership Loyalty Programme rewards players with loyalty points as an additional reward for maintaining their subscriptions. Several key elements contribute to a successful loyalty program. These include a points system for in-game purchases or time spent, tiered rewards unlocking exclusive benefits as players progress, such as in-game items, discounts, and early access. Personalized offers tailored to user preferences and patterns, supported by feedback loops, enhance program performance.

Implement Referral Marketing

The power of recommendations from friends and family is significant, forming the foundation of referral marketing, also known as word-of-mouth marketing. This approach utilizes existing players to attract new users cost-effectively. Developing attractive and personalized incentives targeted at players interested in the game’s genre or mechanics enhances conversion rates. Additionally, limited-time offers, gamification elements, and community events can boost effectiveness. According to research by Nielsen, 92% of consumers believe suggestions from friends and family more than advertising. A great example of how effective referral marketing can be is Fortnite’s ‘Refer a Friend’ program where players could send invitations to friends, and the referrer and the referred friend received in-game rewards.

Technology for the win

It is no secret that technology has been a transformative force for customer engagement and how brands communicate with them. That being said, it is the selection of the right tool that is the challenge and is crucial for the success of running and managing a successful loyalty and referral marketing campaign. The tools should be able to track player activity, manage points, automate reward distribution, etc. For instance, the right tech integration can make omnichannel or multi-channel communication seamless and increase player engagement. Adda52 for example, leveraged an optimal tech platform to boost mobile app engagement and stickiness and increase the number of repeat active cash game players. They were faced with the challenge of bonus management and customer segmentation. With consistent use of technology, Adda52 saw 85%+ players engage in repeat cash games, and over 20% growth in overall revenue.

Spread the word

It is a necessary step to drive engagement and participation among players. The key is to spread awareness understandably, highlighting the benefits of participation and guidelines with as little ambiguity as possible. The second is to ensure that the communication is carpet-bombed across every communication channel – emails, social media, in-game notifications, and what have you!

Monitor, Analyze, and Optimize

Regularly monitoring the performance of your loyalty program and referral marketing efforts is essential, to gather deeper insight into which incentives or reward structures are most effective, and gives a clear indication as to which channels are performing better. This information better equips brands to enhance not only the gaming experience, but also continuously better marketing and communications strategies, and improve elements of the loyalty and referral marketing program as well. Nothing works better than continuous evolution and improvement to drive quality conversions and improve retention.

Engage and Communicate

Maintaining regular communication with your players about their progress in the loyalty program and reminding them of the rewards they can earn is a great way to keep players engaged. Interacting with players through social media, in-game events, and newsletters to keep them excited and motivated can make a real difference. The more personalized the communication, the more effective it is for players. For example, ZenGaming was able to leverage contextual onsite notifications and emails to keep players engaged and ensured that communications were triggered at critical points in the player journey, resulting in a 26% uplift in day 1 retention, and a 97.1% day-2 return rate.

Keep an eye on the prize: What’s your ROI?

Metrics such as player engagement, average spending, referral conversion rates, etc., can be used to calculate the return on investment (ROI) of your loyalty program and referral marketing. This data can then be analyzed and used to develop strategies for increasing the effectiveness of these programs or for course-correcting if necessary. Funnel analysis, especially Bottom of The Funnel metrics, is a powerful tool for measuring ROI.

Last but not the least, stay compliant

The most important step is ensuring that your loyalty program and referral marketing efforts comply with relevant regulations, including data privacy and consumer protection laws. Doing so increases the credibility of these programs and the players’ trust in them.

By implementing these referral marketing strategies and fostering a community of engaged players, you can turn your game into a magnet for new users and cultivate a loyal following that fuels the growth of your game for years to come.