Bringing Gamification to Card-Linking and O2O
I had the opportunity to speak with Nicolas Coppée, co-founder of Belgian startup LuckyCycle. LuckyCycle offers a unique card-linking platform that drives customer acquisition and adoption for retailers and payment providers by creating a gamified checkout for consumers. Rather than offering a generic 10% discount, retailers can add some fun and behavioral psychology at checkout by giving consumers the chance to play a game where they have a 1-in-10 chance of winning their purchase for free. Below is a condensed version of our conversation.
LuckyCycle’s gamification approach to card-linking generated a lot of buzz at the CardLinx SF Forum last month. Can you describe how it works?
We get data online, like behavioral data, from the website where we are going to deploy LuckyCycle. Data like: the time you spend on the site, whether you are moving the mouse and how active you are. We try to find the behavior pattern of a dedicated shopper that is going to make a purchase. Then we target them with personalized ads on the website and through email. For example, “Nicolas, if you are interested in this product, you should buy today and you will get a 1 in 10 chance that you will get that item for free.”
So, you try to find the dedicated shopper by using the data from the website directly?
Exactly. It can be either or. It can be offers as a short term promotional period for five days and you offer it to everyone coming to the website. “It’s Mother’s Day, enroll your card to get 5% back.” The other option is to run longer promotional programs where we target specific consumer behavior like abandoned baskets from someone who came to the website previously. We will follow up with a personalized communication with the chance to win something by offering them a game to get them to come back and make the purchase. You can run this type of promotion forever.
The main advantage of gamification is that it doesn’t use price as a trigger to change consumer behavior. Because it doesn’t touch price, which is a very sensitive factor, you can use LuckyCycle promotions for many types of retailers and brands.
When you are a brand or retailer you control your prices online and in-store, gamification is quite unique because we don’t play on price we play on the fact you win something. We can run these campaigns constantly without in conflict with other marketing initiatives in different channels.
You mentioned the engagement rate who receive the targeted communications is quite high.
What we can see online when we have an average 75% participation rate on our game showing that the consumers care and do have interest in playing the game. For a very strong brands like Estee Lauder or Clinique it might be even 90%. It depends on whether the game is well advertised beforehand and the strength or the commitment of the consumer towards the brand.
Another hot topic in the industry is loyalty. Do you think there is room for gamification in loyalty programs to engage repeat consumers?
That’s actually something we are really trying to push as well, to increase gamification within loyalty programs. Because loyalty programs have an existing scheme that is based on collecting points or getting discounts or cash back and you can layer gamification on top of that as a complement to an existing offer or it can substitute loyalty programs. So instead of giving something certain, you give something with a certain level of uncertainty but with the frequency of the purchases at some point every program member will “win” something.
The best example is our current effort in reaching out to different players in the payment schemes. We are trying to add a credit card to the LuckyCycle platform. So that every time you use your credit card, you have a 1 in 100 chance you will get your purchase for free, whether it’s Starbucks, a bill or a television.
The main idea we are trying to push essentially with CardLinx members: Build a loyalty program that is exclusively based on gamification and offering a chance to win with different levels. The higher the level the greater chance of winning. And even receive free tickets to an event. You win because the odds are low because if you compared it to a cash back program where you get 1% cash back, in this scheme every time you use the card, you have a 1 in a 100 chance to win it back. You receive a text message or email to play the game after each purchase. And that is what card-linking is offering as well, a unique way to identify the consumer and present the game after each purchase.
That’s the idea we want to push forward in the card-linking community: To bring new kinds of loyalty programs.
Are these projects for partnership with credit card issuers part of your project for this year?
Yes, to discuss with card issuers, payment schemes, banks, with very large retailers who have their own credit cards how they could benefit from adding the LuckyCycle platform.
Gamification is relevant now especially where consumers are looking for being entertained. Everyone is looking to increase their dopamine level. Playing a game where you can win something is fun. Gamification takes traditional loyalty programs to another level and makes it more exciting to more people. Imagine a loyalty scheme like that that where each time you use your credit card you have a chance to win your purchase back. The win and the reward is exciting and creates an emotional link with the consumer as well.
We’ve observed a slightly higher participation rate when the population is a little younger. We have more success with younger users. So LuckyCycle is a great platform for loyalty programs looking to engage with Millennials.
Are you looking for partnerships in the US or Europe? Or other possibilities?
We are open to any geography. The software is the same. We’ve created a software tool to easily deploy various schemes while personalizing it for each brand so each experience looks unique. It’s very easy to manage complex scenarios of eligibility, who can receive a game, who wins all these types of things, all the legal aspects. This complex process is handled by the platform.
The asset we have is the patent in the US which offers the possibility to work with a limited amount of strategic partners where we can say thanks to the patent we can benefit from the protection as we are the only ones who can use this technology.
Do find certain retailers are more interested in the LuckyCycle platform?
We work across many verticals, all the retail categories. It works very well with general merchandise, grocery, travel, hospitality and fashion.
The sweet spot for LuckyCycle are for products that are under $200-$250. It’s where our method can most influence consumers in their shopping behavior. If it’s a larger purchase, like a $600 sofa, you will be less motivated by the chance you might win it back.
On the other hand, there are people looking for a sofa for a long time, browsing different retailer websites and then they see the LuckyCycle promotion, it prompts them to make the purchase.
On average, adding a LuckyCycle campaign reduces abandoned shopping cart rates by 30-35%, which is huge. It really shows that gamification really pushes shoppers to the finish line.