LEBRON JAMES, LADY GAGA & COCA-COLA HAVE A PROBLEM - A case for building proprietary gamefied loyalty programs Written by Jay Bobo for GoodProduce
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LEBRON JAMES, LADY GAGA
& COCA-COLA HAVE A PROBLEM
A case for building proprietary gamefied loyalty programs
Written by Jay Bobo for GoodProduce
(c) 2013, Page 1
“The value of a brand is linked to the relationships it fosters: the social
connections among people who buy the product or service. Managing
these connections at every scale, from an individual contact to a
message that reaches millions of people, is the fundamental task of
marketing today.”
-Egol, McEuen & Falk
(strategy+business.)
(c) 2013, Page 2
I. Introduction
Celebrities have much in common with the world’s top brands. They are in a unique place
in the digital world where their connection to their fans (i.e., customers) is increasingly
controlled by Facebook, Twitter, Google, and nascent social media companies.
This presents several problems for celebrities, their fans, and brand partners in that they
are at the whims of the ever-changing terms of service, rules, and regulations of Silicon
Valley. The current social media landscape does not lend itself to creation of unique fan
experiences that deepen and strengthen the relationship between celebrity and fan.
We live in a society increasingly infatuated with celebrity where fans are looking for
recognition and assurance of where they stand in the world. The question remains how
does a celebrity or brand take ownership of their online fan connection and improve their
fan experience in a profitable way?
(c) 2013, Page 3
“The more you engage with customers the clearer things
become and the easier it is to determine what you should
be doing.” -John Russell
(VP, Harley Davidson)
(c) 2013, Page 4
II. The problem
Social media networks are…
a. Expensive - In order to properly manage their fan facing social media accounts, brands
& celebrities have had to increasingly employ specialists and pay for special management
tools. What happens when other companies are completely in control of the way we
interact, monitor, and market to our fans/consumers in the digital world?
b. Proprietary - As social media companies find ways to generate revenue they are in a
state of flux as they experiment with their API guidelines and Terms of Service in order
to safeguard prospective profit centers. This negatively leaves celebrities, fans, their
partners and assets as the first to be exploited.
(c) 2013, Page 5
FACT: You control nothing.
(c) 2013, Page 6
FACT:
You must pay to reach
the community you’ve
already spent money
building.
(c) 2013, Page 7
III. Solution
Social media should be used to creatively drive fans to proprietary solutions that permit
better data collection and revenue generation. In that social is increasingly mobile, it
provides a direct and physical connection to every consumer that owns a phone or tablet.
Leverage social media! Build your channel!
- find their voice - customize the experience
- engage - own your data
- create awareness - monetize
- redirect - retain and grow
“Everything is going to the phone.” -Ken Lerer
(Chairman, Buzzfeed)
(c) 2013, Page 8
IV. Gamification & loyalty?
Gamification is a now common industry buzzword used to describe the application of
game mechanics to motivate behavior and form positive habits. It’s applicable in both
consumer and employee-facing environments.
Loyalty programs are marketing techniques and programs that facilitate positive buying
behavior and collect important consumer insights.
(c) 2013, Page 9
“Next-generation loyalty programs must consider consumers’
attitudes as well as behaviors, and create a mutual value exchange
that deepens the connection between the customer and the brand.
Loyalty programs must also maximize the efficiency and effectiveness
of communications, especially email, which is still the dominant
form of communication.”
-Bob MacDonald
(President, Maritz Canada Inc.)
(c) 2013, Page 10V. Support for loyalty & gamification
Isn’t gamification over? What about big data? What comes next?
...Getting the most out of your followers and likes!
The long-term relationship that fans are opting into is a great opportunity. If we look at
some of the current examples in the marketplace we’ll see that early adopters & dedicated
fans want more engagement and are willing to pay for it.
This does not have to be at a loss, in fact a number of leading companies have developed
habit-forming rewards programs that generate added revenue through provision of
premium rewards, products, and services.
(c) 2013, Page 11“Today, just amassing millions of users is no longer good enough.
Companies increasingly find that their economic value is a function
of the strength of the habits they create. But as some companies are
just waking up to this new reality, others are already cashing in.”
-Nir Eyal
(Lecturer, Stanford)
(c) 2013, Page 12VI. Current examples in the market
a. Amazon Prime is the best known profitable example. It dually rewards customer loyalty
and improves satisfaction. It also generated considerable revenue until Amazon changed
it’s strategy in order to compete with Google and Apple. Prime does not leverage game
mechanics to increase profitability but it does provide a reward at a cost that enhances its
core business model.
b. XBox Live Gold - Microsoft could easily provide a free online multiplayer console
gaming solution, but they have found a unique way to generate additional income
through the competitiveness of it’s users. Subscription fees, advertising and microtransac-
tions are just some of the ways they bring in money. XBox heavily uses key game elements
such as achievement, blissful productivity, micro-leaderboards, ownership, virtual items
and rewards schedules just to name a few.
c. NBA 2K MyPlayer - My favorite example is 2K’s latest addition to their popular NBA2K
franchise. It relies on microtransactions while leaning heavily on micro-leaderboards,
virtual items, reward-schedules, and envy to encourage fans participating and spending.
MyPlayer is also a great data collection tool and provides information such as age,
location, mobile use, gaming habits, and a myriad of other data points.
(c) 2013, Page 13(c) 2013, Page 14
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VII. Ideal strategic methodology
a. Knowing the fan and exploiting fan psychology
In the case of brands getting the most bang out of their sports sponsorships, one can look
at what motivates fan loyalty and behavior. Within the world of sports, researchers such
as Daniel Wann, Galen Trail, and Jeffrey James have developed a comprehensive scale to
“better understand the impact of psychological motives on attendance at sporting events,
purchase of merchandise, and other consumptive behavior.” Similarly, the work of Nir
Eyal sheds light on manufacturing habits and desires via industry agnostic methods.
The truth about fans is that whether they be Little Monsters, Team LeBron or Apple fan-
boys they share a uniqueness that unites them and sets them apart. The same traditional
parasocial relationships that are exhibited between celebrity and fan is surprisingly similar
to that of Fortune 500 company and their most dedicated consumers.
(c) 2013, Page 17VII. Ideal strategic methodology
Keys to knowing your fans and understanding their thinking...
1. Determine fan motives
2. Collect demographic information and cultural cues
3. Manufacture desire through habit-forming engines
(c) 2013, Page 18VII. Ideal strategic methodology
b. Key game mechanics to utilize
There are a long list of mechanics as identified by leading game experts and thinkers that
can be utilized. Some of the most common are found in the world’s most popular games
for mobile devices, browsers, and gaming consoles. Farmville, Minecraft and World of
Warcraft are just a few that come to mind. In the case of young men (18-34), we have
highlighted the following:
1. Recognition & acceptance - Cool as a currency is important for fans. It gives them
the opportunity to gain cool through association. They are concerned with achiev-
ing not only the most followers but high-profile followers too. Achievement through
retweets and @replies are a way of life for them - a miniature television interview or
cover story on the front page of their social newspaper. (achievement)
2. Family - There’s nothing so much as important to young men as being wanted and
accepted into a group that’s achieved status. Positively, it’s what fuels high school
athletics and college fraternities. (social fabric, family)
(c) 2013, Page 19VII. Ideal strategic methodology
3. Competition & envy - Every hard-fought win produces eustress and drama that
builds commitment. A loss is equally important as it stimulates want. (ownership)
4. Status - As you’re brought into a group, nothing is more important than where you sit
within the group. (acquisition of knowledge, pride)
(c) 2013, Page 20“Social engagement is not [just] unavoidable. It represents a far
more effective use of marketing effort and resources, and at its best,
it represents a more human approach to engaging consumers...
The social life of a brand can be an integrative force for a more
holistic approach to marketing, in which companies build long-
term, multifaceted, and fruitful relationships with the people who
identify with their brand ideals and choose to buy and advocate on
behalf of their products and services.”
-Egol, McEuen & Falk
(strategy+business.)
(c) 2013, Page 21X. Conclusion
Brands and celebrities must invest in developing proprietary channels to engage their fans
both to generate revenue and maintain brand integrity. It will be increasingly expensive
and counter-productive to let the world’s leading social media companies determine the
parameters of your online communication strategy. This rings especially true as
traditional marketing dollars move online and the cost of online advertising rises.
The purpose of this document is not to naively propose that if one builds a system, then
fans will come; instead that the long term benefits of investing in proprietary brand-to-
fan solutions outweigh the costs of the social media status quo. Now is the time to make
concentrated efforts to create transparent habit-forming systems that reward consumptive
behavior and facilitate engagement.
(c) 2013, Page 22Sources:
“How Companies Learn Your Secrets”
http://www.nytimes.com/2012/02/19/magazine/shopping-habits.html?pagewanted=all&_r=0
“Millennials Are Playing With You”
http://blogs.hbr.org/cs/2011/12/millennials_are_playing_with_y.html
“Insider Tips to Building Next-Generation Consumer Loyalty Solutions”
http://www.maritzloyaltymarketing.com/White-Papers/Insider-Tips-To-Building-Next-Generation-Consumer-Loyalty-Solutions.aspx
“How to Manufacture Desire: An Intro to the Desire Engine”
http://www.nirandfar.com/2012/03/how-to-manufacture-desire.html
“The Social Life of Brands”
http://www.strategy-business.com/article/00118?gko=272b8
“The Motivation Scale for Sport Consumption”
http://www.biomedsearch.com/article/Motivation-Scale-Sport-Consumption-Assessment/70935203.html
(c) 2013, Page 23(c) 2013, Page 24
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