How Gamification Hacks Cognitive Biases to Drive Customer Stickiness

Ever wondered why you can’t resist those loyalty points or why you keep coming back to that app with the daily challenges? Spoiler alert: It’s all about how gamification taps into your brain’s cognitive biases.

Yep, we’re talking about the hidden forces that drive your and your customers’ behaviors and how smart businesses are using them to keep you hooked.

Let’s dive into this fascinating world where cognitive bias meets fun and discover how these biases play a starring role in gamification strategies.

The Magic of Loss Aversion

Picture this: you’ve earned 100 points on your favorite app, and suddenly there’s a challenge that could make you lose 50 of them if you don’t complete it. Panic mode activated, right?

That’s loss aversion in action. We hate losing more than we love gaining. Gamification leverages this by setting up scenarios where the fear of loss propels us to engage more actively.

How Perx Gamifies This: The biggest bank in the Philippines used Perx to combine loyalty programs and gamified strategies, driving customers to readily redeem their points for vouchers. These vouchers were from partner merchants who also benefited from the bank promoting their brand to its 19 million customers. This led to an earn-burn ratio of 32%, well above the industry average.

The Endowment Effect: Your Digital Treasure

Ever felt super attached to those virtual coins or badges you’ve collected? Welcome to the endowment effect. Once something is ours, we value it more. Gamified apps give you rewards upfront, making you feel like you’ve got something valuable that you don’t want to lose. It’s not just a digital badge; it’s your badge.

How Perx Gamifies This: Many of our clients engage with their customers daily, thanks to the Perx platform that enables them to award badges for positive actions. Singapore’s leading telecom brand uses a similar approach, awarding points for each day the customer logs into the app and plays a game. Another client awards badges for transaction streaks, resulting in a monthly engagement rate of over 60% on their loyalty apps.

Social Proof: Keeping Up with the Joneses

Why do we care about leaderboards and social sharing features? Because we’re hardwired to look at what others are doing and follow suit. Social proof is a powerful cognitive bias that gamification taps into. Seeing your friends or peers achieve higher levels or unlock cool rewards drives you to do the same. After all, nobody wants to be left behind.

How Perx Gamifies This: Through gamified quests and leaderboards, we’ve helped our clients motivate their customers to unlock higher rewards by taking actions that grow business. For example, with our telco clients, we launched quest campaigns that encouraged customers to sign up for higher plans while showing where they stood on a game leaderboard. This led to the brand’s campaigns having over a 90% completion rate with over 85% returning users for in-app engagements.

Commitment and Consistency: The Journey Matters

Started with a small goal and now you’re deep into a complex challenge? That’s the commitment and consistency bias at work. Once you commit to something, you’re more likely to follow through. Gamified systems cleverly start with easy, achievable goals, gradually leading you to bigger challenges, ensuring you stay engaged throughout the journey.

How Perx Gamifies This: The largest digital bank in Singapore uses stamp campaigns powered by Perx to entice its customers to use the bank’s card for everyday transactions. By providing stamps for referrals, foreign transactions, and even just buying their morning coffee, the brand generated a minimum of $6.6 million in 6 months with a 70% average campaign engagement rate per user.

Ben Franklin Effect: The Power of Asking for Help

Ever noticed how asking someone for a small favor can make them like you more? That’s because of something called the Ben Franklin effect. When we do someone a favor or oblige a request of theirs, even if they are total strangers with whom we have no previous connection, we are likely to be fond of and trust them. This creates the basis for a strong and possibly lasting positive relationship. Gamified systems use this cognitive bias by incorporating feedback surveys and small tasks that ask for user input. By engaging customers in this way, they feel more valued and invested in the process, strengthening their connection to the brand. It’s a clever way to turn simple feedback into a powerful tool for engagement.

How Perx Gamifies This: Surveys are part of our clients’ regular campaign rosters. By launching journeys that collect feedback and additional preferences from customers, our clients get first-party data on their customers. Proactively collecting customer insights demonstrates that their opinions are valued, and rewarding their participation instantly nurtures a deeper sense of loyalty, satisfaction, and long-term engagement with the brand.

So, next time you find yourself hooked on an app or eager to earn more points, you’ll know it’s not just the game—it’s your brain in action. And that’s the magic of gamification.

At Perx Technologies, we’re passionate about understanding these cognitive biases and using gamification to create engaging, rewarding experiences for the end-users. This way, we help businesses build stronger connections with their customers, driving loyalty and engagement in ways that feel natural and fun.

Want to amp up your game? Reach out to us and let’s get talking.

In the meantime, experience what it would be like to engage with a global hospitality brand that uses Perx to gamify every interaction with their customers.

Click here for a demo.