Gamification in loyalty: moving beyond gimmicks to habit-driven engagement

Gamification has spent years being dismissed as a gimmick in loyalty, associated mostly with spin-to-wins and scratch cards bolted onto a programme.

In a recent Let's Talk Loyalty episode, Mrinalini Chowdhary set out a more useful frame, treating gamification as behavioural design built on psychology rather than mechanics.

The sections below pull out the eight ideas from the discussion that most usefully reframe how loyalty teams should approach gamification design.

1. Why gamification is rising now

Several forces are pushing gamification up the loyalty agenda at once, and the direction of travel is unlikely to reverse.

• Loyalty programmes look increasingly alike, with similar mechanics and diminishing scope for meaningful differentiation.
• Younger audiences arrive with digital-native expectations shaped by gaming, social platforms and interactive content.
• AI-driven and agentic commerce risks stripping emotion out of purchase decisions, replacing it with cold logic.

The response is not to add emotion in the abstract. It is to design programmes that give members reasons to feel involved in the moments where a decision is actually being made.

2. Gamification isn’t about games

One of the more useful distinctions Chowdhary draws is between running games inside a programme and applying game thinking to the programme itself.

Games are entertainment that generates time spent, whereas gamification borrows the mechanics, visuals, progress cues and feedback loops that make games compelling and turns them on the actual behaviours a brand wants to encourage.

Small cues carry a lot of the weight, whether that's a shimmer around a subscribe button, an animation on a completed step, or a visual pointing users towards the next thing they should do. The underlying motivation shifts from external reward to intrinsic satisfaction, which is where behaviour change tends to hold.

3. The role of psychology in driving engagement

Every gamification design conversation with a single question: what behaviour are we trying to drive, and why would someone actually do it?

Several psychological drivers feed into the answer:

• Purpose and identity, of the kind Nike leans on when it positions its customers as athletes rather than shoe buyers
• Achievement and progress, drawing on the goal gradient effect and interim milestones when tiers sit too far apart
• Choice and empowerment, giving members meaningful decisions rather than a single prescribed reward
• Social signalling through badges, status markers and shareable achievements
• Delight and surprise, still one of the most reliable ways to shift how a member feels about a brand

Used in combination, these drivers move engagement away from a purely transactional register and give members reasons to keep showing up.

4. From passive to adaptive engagement

Most gamification in market today is passive. It rests on mechanics like spin-to-win or a single scratch card that generate a moment of interest and then fade quickly, without carrying that interest into the next session.

The shift Chowdhary describes is towards adaptive, personalised journeys, where the experience evolves based on what a member has already done, actions trigger new and tailored challenges rather than a fixed sequence, and engagement deepens as more signals get collected over time. This mirrors modern gaming environments, where two players inside the same game rarely walk the same path or hit the same challenges in the same order.

5. Levels of gamification

The gamification landscape can be broken into three distinct levels, each doing a different job in a loyalty programme's engagement mix.

1. Momentary engagement
   • Quick, low-commitment interactions like scratch cards or spin-to-wins
   • Useful for grabbing attention, less useful for holding it beyond the session
2. Periodic engagement
   • Time-bound activities such as streaks or Advent calendars
   • Encourage repeat visits without being fully embedded in the loyalty programme
3. Integrated (deep) gamification
   • Woven into the loyalty programme itself rather than bolted onto it
   • Personalised, adaptive and continuously optimised
   • Designed to convert time spent into time invested

6. Building habits through micro-moments

The habit-forming logic here comes straight from James Clear's Atomic Habits, where behaviour change is treated as incremental rather than dramatic. In loyalty terms, that means breaking actions down into much smaller units than programmes usually design for, so members can be rewarded at each step of the journey rather than only when the whole thing is done.

A sign-up form might award points for individual fields completed rather than for the final submission, and continuous feedback loops keep progress visible in near real time. Enough of these small interactions, repeated over enough days, start to look less like campaigns and more like rituals a member returns to without thinking about it.

7. Measuring ROI

ROI conversations in gamification tend to layer, and the layer that gets the least attention is often the one doing most of the work.

• Top layer (golden metrics): revenue, transactions, customer lifetime value
• Middle layer (levers): average order value, frequency, acquisition, retention, reactivation
• Foundational layer (engagement): participation, completion and interaction rates across specific moments in the journey

Discounting will always lift revenue in the short term. Gamification only proves its worth when the engagement layer rises first and the commercial numbers follow behind it, which is a slower and less obvious story to sell internally.

8. The future: continuous optimisation (LiveOps)

Gamification design is starting to borrow the LiveOps model from gaming, where nothing is ever really finished shipping. Experiences get tested, refined and retested continuously rather than in set-piece campaign launches, and real-time data feeds back into the design instead of sitting in a quarterly review deck.

Personalisation gets sharper as more member signals accumulate through the system, so the version of the programme a long-standing member sees quietly diverges from the one shown to newer joiners. The practical implication is that gamification stops behaving like a feature and starts behaving like an operating discipline that a loyalty team has to properly resource.

Gamification, applied well, is really an argument for behavioural design inside loyalty programmes rather than an argument for adding more games. The brands that get value from it will be the ones that start with psychology, build engagement through smaller moments than they are used to designing for, and treat personalisation as an ongoing capability rather than a project. Whether that eventually adds up to a genuine habit or just a stickier programme will depend on how disciplined the execution is over time.

See how Epsilon Loyalty turns passive points systems into gamified engagement that adapts in real time.