The prevalence of mobile engagement has had a significant impact on the rewards industry over the past 5 years. Achievement rewards has been a loyalty trend on the rise and is primarily fueled by the growth of mobile first user experiences.
Achievement rewards are incentives that are triggered and served to a user based on a specific action they have completed or threshold they have surpassed.
The most common application for achievement rewards is to serve them as an ad unit without requiring the user to exchange any type of currency to obtain it. In this application, the user’s actions serve as the ‘banked value’ that is being exchanged for the reward.
This use case is primarily used by traditional publishers, commonly within mobile apps, due to the simplicity of its structure and monetization potential. Mobile advertising companies such as Kiip, SessionM and The Mobile Majority (aka PaeDae) have helped popularize the approach.
Why is it working?
The growth of the achievement reward vertical alone is testament to its success. A few of the factors contributing to it include:
- Ease of implementation – These rewards remove the need for a company to register members, track their ongoing actions, value those actions, price rewards, and a handful of other strategic initiatives that go along with building a proprietary loyalty program. All you need to do is track a single action or threshold and serve a reward once that criteria is met.
Low user expectations – These reward types are generally unexpected by the user. As such, they can easily surpass the user’s preconceived expectations, even if the rewards are sub par.
Ad unit compatibility – With mobile real estate at a premium, it’s certainly an advantage that these rewards won’t need a dedicated section in your app/site. A well designed and implemented achievement component should be compatible with your ad server, making it easy to administer, track and monetize.
Turning it up a notch
I find it hard to escape the feeling that engagement and advertising dollars are being left on the table with this approach. While its current manifestation may drive increased retention after the user receives a reward, its hard to see how it encourages users before that point. Below are a few thoughts on how to bridge the divide:
- Define the rules of engagement – Let your users know how they go about earning these rewards. If there is a specific action or engagement path you want them to take, define it and reward them for following it.
Track their progress – Reinforce their actions along the way by showing them progress and communicating milestones. Have them start the challenge with progress already banked for added motivation.
Introduce member choice – Offering members a choice between two or more rewards will greatly improve their experience (along with providing awesome behavioral insights). If you are confident in your rewards offering, let them select a reward upfront to maximize their ‘lock-in’.
Traditional loyalty program applications
I am excited to see how this innovation to the loyalty industry will be applied to traditional earn and burn schemes in the upcoming years. A few initial applications that come to mind include:
- Earn promotions – The most obvious adaptation would be to replicate the functionality with the member earning points that can be used towards any reward. It can be argued that this is old news, dating back to the frequent flyer bonus miles and status accelerator promotions. Either way, there is definitely room for growth here.
Reward discounts – Rewarding members with a points discount for a specific reward or set of rewards would be a great way drive points usage and promote specific partners while maintaining the integrity of your program structure.
Locked rewards – If your goal is solely focused on engagement, without concern for promoting specific partners, using a lock/unlock mechanism may be the way to go. In this scenario, certain rewards would be locked for the member until they reach the pre-determined achievement trigger.
Any way you slice it, achievement rewards are at the forefront of rewards program innovation. As long as programs are keeping it simple, building value for their members and communicating it well, they can’t lose.