Gamification: When does it make sense for card issuers?

Credit card promotion used to be a straightforward path. Today’s journey is more like a labyrinth. Cardholders need persuading to choose your card, activate it, make their initial purchase, and use it regularly to gain the most advantage.

Yet there are many obstacles along the way:

• Customers have so many choices to pick from that they suffer from information overload.
• Activating cards currently requires more steps and jumps.
• Consumers are spending more hours on digital channels, making traditional tactics like direct mail less efficient.
• Rivalry is intense and new card issuers have blurred the boundaries between banks and fintechs.

The big lesson: card issuers must find a way to engage consumers as part of the entire credit card journey.

Instead of pushing customers through a funnel using traditional methods, issuers should guide customers with an engaging and immersive digital journey. And gamification is the optimal way to achieve this. 

So keep reading for a breakdown of how gamification powers every stage of the cardholder lifecycle.👇

When does gamification make sense across the cardholder lifecycle?

Cardholders want their experience to be straightforward, convenient, and rewarding. They want perks and benefits to make their life simpler. So, now is the time to take a more rewarding marketing approach.

Issuers that integrate gamification have the upper edge when it comes to challenges such as clever competitors. And it’s evident that early adopters will lay the foundation for improved cardholder experiences.

With this in mind, let’s take a glimpse at how gamification can power the entire cardholder lifecycle.

💳Card introduction/customer acquisition

The cardholder journey begins when a card issuer introduces a new card product or a new acquisition campaign. Either way, card issuers will need an effective strategy to capture new customers.

• Key challenge: At the acquisition stage, customers have a vast selection of card issuers to choose from. Which means card issuers have to stand out from the crowd.
• Solution: This is where the card issuer can differentiate their brand amongst a sea of competitors through an engaging journey.
• Gamification example: Gamify the card sign-up stage: Introduce a point-based game whereby completed user actions will earn opportunities to instantly win prizes through mini-games, like spin-the-wheel.

It’s even better if you can use gamification to leverage zero-party insights, such as consumer preferences, reasons for choosing your card, competitor insights, and more.

💳Card Activation

At the card activation stage, cardholders often need nudging to activate their card.

In fact, according to The Nilson Report, the average credit card activation rate for the top 50 Visa and Mastercard issuers is 57%. This leaves just over half of your acquired customers deactivated and unused – representing a lost opportunity, as well as wasted marketing resources in customer acquisition.

• Key challenge: Card issuers struggle to reinforce their credit card value proposition and maintain cardholder enthusiasm during the waiting period after acquisition, leading to low activation rates.
• Solution: This is where gamification can really help to attract and reward customers for activating their card.
• Gamification example: Gamify the waiting period. For each additional day a customer has to wait for a card, the odds that they will activate it decrease. Issuers can reduce the impact of this waiting period by making the card traceable in the mail, like an Amazon order, which gamifies the process and creates anticipation for the card’s arrival.

💳Early Month On Book (EMOB)

The period after acquisition is high risk for card issuers. Their behaviours during their first 60-90 days with the card set usage patterns that will last the lifetime of the relationship, for better or for worse. According to the same above report, customers who receive EMOB messaging have three times the lifetime value of other customers, but card issuers generally under-invest in this critical stage.

• Key challenge: A key challenge to this strategy is the capability to motivate newly-acquired cardholders to start – and continue – to use the card (more on this next). Unfortunately, most issuers lack the tools to effectively influence customer behaviour during these key stages of the cardholder lifecycle.
• Solution: Personalised offers and experiences can boost usage rates and set profitable spending habits during EMOB, increasing lifetime worth. Campaigns will create a value exchange for customers instead of simply demanding their attention.
• Gamification example: Mission-based game that takes customers through chapters, earning them badges upon each chapter completion.

💳Increasing card usage

In recent years, some card issuers have changed their focus from simply acquiring new customers to optimising relationships with existing cardholders. Optimising usage will deliver huge impacts on customer lifetime value (CLV) as this is the stage where the issuer generally recoups acquisition costs and generates income.

• Key challenge: Encouraging card usage and ‘stickiness’ can be challenging in a world of payment options. Why should they use your card over a different payment method?
• Solution: Gamification can build loyalty and stickiness at a relatively low cost compared to other tactics. By providing value beyond the transaction, issuers create a value exchange that builds trust with the customer, who comes to feel that the issuer knows them and their preferences.
• Gamification example: Spin-to-win type campaign whereby X number of card transactions will trigger chances to play a game to win prizes or cash back.

💳Increasing card spend

Finally, when a customer is fully onboarded and credit card usage is happening on a regular basis, issuers enjoy consistent revenue, especially if the customer has set profitable card habits. Card issuers that leverage gamification to engage customers regularly at this stage can see a significant impact on CLV.

• Key challenge: Encouraging card spend often depends on running high-volume campaigns with low conversion rates. Traditional reward programmes are stagnant. Today, simply having a rewards program is not enough to encourage redemption.
• Solution: Drawing on gamification can significantly boost card spending habits.
• Gamification example: Spin-to-win type campaign whereby a certain value of transactions or spending tiers will trigger chances to play a game to win prizes or cash back.

Create more value across the cardholder experience 

Card lifecycle marketing using traditional techniques is no easy task. It can be near impossible to engage today’s digital consumers. Instead, it calls for new kinds of tools. We need to provide cardholders with an immersive digital journey, not siloed offline direct mail.

In short, card issuers need to re-imagine a cardholder lifecycle strategy that is engaging, rewarding, and enjoyable. By boosting activation rates and proactively encouraging spending behaviours early on, issuers set themselves up for success at the usage stage and beyond.

These elements work together to enhance the cardholder journey and deliver sustainable business growth.