Introduction to Loyalty Status Programs
If you've ever been a part of a loyalty program at a hotel or airline, then you're probably familiar with Loyalty Status Programs. Loyalty Status Programs are a subset of Loyalty Programs that "tier" loyalty members up as they become more loyal and valuable to the company. When used effectively, these higher statuses can become very sought after by members of loyalty programs, and as a result, members can become equally more valuable for the company. If you get your status program right, you can expect participating loyalty members to increase their LTV 25-50% over members who haven't engaged with the status program.
On this page...
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We'll talk about what make status programs work.
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We'll teach you how your mobile game can take advantage of some of the industry's best thinking.
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We'll discuss whether or not status tiers should expire.
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We'll cover some examples of companies doing it right.
Let's get started and be better together!
Home / Module 3: The Loyalty Toolset / Introduction to Loyalty Status Programs
The Basics: What Makes Status Programs Tick?
All robust loyalty programs include two parts: A rewards program and a status program. They are separate, but both part of the overarching program, and both can be equally important.
A mature, robust loyalty program includes both a rewards program as well as a status program. It is most common that these two aspects are distinct from each other in terms of both the currencies that the loyalty member uses to transact as well as the benefit pool they get to enjoy. Nonetheless, they both reside within the overarching loyalty program as two sides of the program, and both can be equally compelling for members and valuable to the company.
Why are the points earned in each separate? Why not just have ONE currency for them both? Several reasons:
First, because your system must carry and track two currencies regardless.
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When members USE their points for REWARDS, you don't want them to lose their points for STATUS.
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And vice versa, when members TIER UP, and effectively reset their STATUS point balance, you don't want their points for REWARDS to go away.
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This means that you must effectively keep two currencies in your system whether you surface that to your members or not.
Second, because combining them would be more confusing to the member.
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So why not just obfuscate the two currencies to the member and simply reflect it as one currency even though it's two? Because it would be a more confusing customer experience.
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As the two balances diverged (at the point of currency burn), your members would no longer see them as the same currency.
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So you might as well brand them separately up front to avoid this confusion.
Third, because it's simply more flexible, which is better for everyone.
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Having two currencies allows you create two earn experiences, ascribing different behaviors to each.
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This makes each currency valuable in and of itself, giving each currency the flexibility to optimize where it drives members to engage with the program.
Why Two Economies?
Status = Tiers
The way a loyalty program communicates to members that they have moved up in status is via tiers. In the brick-and-mortar space, these tiers are often represented as custom, branded names, such as "Elite" or "Diamond." In the mobile games industry, it's just as common that they are represented with simply colors or numbers. While it may be easy to get hung up on these branding decisions, what's most important is that the member understands what tier they are in and how it's positioned in the hierarchy of the tier structure.
What's Important:
Members understand what tier they are in and how it's positioned in the hierarchy of the tier structure.
How many tiers should you have?
If you're designing a status program from scratch, the number of tiers you should have is a question of player progression dynamics. Consider how long and how deeply you expect members to engage.
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Since brick-and-mortar businesses commonly see customers purchase monthly, quarterly, or even yearly (low engagement frequency), they keep progression simple and typically offer 3-5 tiers.
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In the mobile games industry, players commonly engage daily or even more frequently (high engagement frequency), so it's typical that there are 10, 20, or even more tiers.
Ultimately, you want players to progress often enough to feel appropriately recognized. More tiers can provide a sense of achievement and longer-term goals. That said, too many tiers might overwhelm or demotivate players if the progression of benefits is too weak from tier-to-tier.
If there are more than 5 tiers, you can mitigate tier fatigue and issues with benefit weakness by creating tier groups. Create stair step improvements in the benefits at each tier group. These stair step improvements become psychological milestones that help players feel a sense of accomplishment as they progress through the tiers while still letting the player feel a more frequent progression. At the end of the day, what's most important is that members understand what benefits accompany that tier.
What's Important:
When determining the number of tiers for your status program, try to strike a balance between creating big psychological milestones and frequent progression. Make sure members understand what benefits accompany their tier.
Our homegrown status program, myVIP, found a middle ground with 10 tiers. The program has two stair step moments, at Tier 4/5 and Tier 7.
For some loyalty programs, tiers expire. For others, they don't. We'll discuss this in more detail below.
Example: Hearthstone
Hearthstone offers up Ranked Play, where players can tier up, show off their abilities in battle and get rewards by moving up the ladder.
# of Tiers: Hearthstone has chosen six "leagues," Bronze, Silver, Gold, Platinum, Diamond, and Legend, each with 10 sub-tiers within them. That's over 50 tiers in all! Each one is represented with a colored metal, a number, and a picture. That might sound overwhelming, but grouping them into six leagues creates milestone accomplishments and brings it all down to manageable levels.
Tier Points
Members of loyalty programs tier up by earning Tier Points. These may be referred to as all sorts of branded names, such as "status points," "room nights," or "miles," depending on the industry and the company. The concept is the same – members do stuff to earn Tier Points, and when they earn enough points, they are awarded a higher tier. What's important is that members know how to earn Points, and understand how close they are to reaching (or losing) a tier.
What's Important:
Members know how to earn Points, and understand how close they are to reaching (or losing) a tier.
Tier Benefits
At each of the graduating tiers, loyalty members can expect a new and better set of benefits for reaching that tier. These benefits can be anything from better benefits to better access and treatment at that company. What's important is that members value the benefits that are offered, both intrinsically and extrinsically. We'll discuss these bimodal motivations in more detail in a separate article.
What's Important:
Members value the benefits that are offered, both intrinsically and extrinsically.
Example: Slotomania + Playtika Rewards
The Slotomania VIP program shares and syncs tiers across the Playtika network with Playtika Rewards, including House of Fun, Vegas Downtown Slots, World Series of Poker, Bingo Blitz, and Caesars Slots. Sloto does NOT skimp on the benefits! Check out the below huge list of everything that changes as players tier up.
Tier Points: "Status Points"
Tiers: Seven tiers, including Bronze, Silver, Gold, Platinum, Diamond, Royal Diamond, and Black Diamond
Tier Benefits: Bigger coin packages, bigger Lotto Bonus, bigger Mega Bonus, bigger rewards for completing Albums and Sloto Card Sets, higher daily Gift Card caps, bigger Daily Gifts, bigger gifts from friends, bigger social post & fan page gifts, access to the Inner Circle (at Diamond), access to a host (at Diamond).
Should Tiers Expire?
One question you'll have to tackle when designing your status program is whether or not tiers should expire. There's no iron clad answer to this question, and certainly plenty of examples of both. (Even Slotomania expires some tiers but not others.) However, there are pros and cons to both choices that we can evaluate. We'll outline these pros and cons below.
Cons
It doesn't inspire any motivation on the part of the member to keep engaging at their usual rate to ensure they maintain their status. This could have a negative impact on engagement and retention.
Pros
It promotes a lifelong relationship. In life, things happen. People get busy or life gets in the way, and they have to step away from your business for a while. If tiers don't expire, members don't feel punished for this. Members are never discouraged to disengage because they've gone inactive temporarily.
Expiring Tiers
NOT Expiring Tiers
Pros
It creates "chase." Members have to work to keep their tier. This will motivate members to stay active.
Cons
It creates "punishment." If members go inactive for a period, or simply engage less, then losing their status might make them feel punished, or divested, which could result in further disengagement.
We recommend expiring tiers. (Any app that is a part of our homegrown status program, myVIP, must expire their tiers.) Expiring tiers is by far the most common approach in loyalty program design, including mobile gaming programs, and thus fairly expected on the part of members of status programs. We feel that the value from the "chase" for members far outweighs the "punishment" when members change their behavior.
Example: Fortnite Battle Pass
Battle Passes are where it's at in Fortnite, and they could be thought of as a loyalty status program. Battle Pass "Levels" (tiers) are obtained through completing quests or earning XP, these levels then in turn unlock access to weapons, shields, and more. They have gone as high as an astonishing 100 "tiers"!
Expiration: Battle Passes expire per season in the sense that they can't be acquired once the season is over.
Final Thoughts on Structuring a Status Program
With thousands of large scale status programs around the globe in countless industries, there are of course countless frameworks and executions of these concepts, for example, the number of tiers a program has or the way in which members earn them. That said, they all follow the same basic outline defined above. What's important is you identify the framework that works best for your members and your business.
What's Important:
You identify the framework that works best for your members and your business.
What Is It Like to Work With playAWARDS?
Status programs are complicated! There's a LOT of infrastructure that goes into building and supporting them. When you partner with playAWARDS, what do you get?
Technology Platform
First and foremost, you get access to our loyalty platform. We have been advancing our platform for over a decade. We've invested tens-of-millions of dollars into it in R&D to make it the most robust loyalty platform for the mobile gaming space. It is templatized and can be easily white-labeled for third parties.
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Through our Loyalty Engine, we support the entire status framework, including tiers, tier points, and tier benefits.
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From our Loyalty Center, we support all pertinent communication to your members.
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Our Back-of-House Loyalty Toolset includes everything you need to manage your status program.
In short, you can tap into a fully robust, developed loyalty status platform, all included in your playAWARDS partnership.
Professional Services
When you work with playAWARDS, you also work with our Professional Services teams. BI, Loyalty Economies, and Customer Relationship Development will all bring their expertise to the table to assist and work with you every step of the way. If you work with playAWARDS, we'll help with industry/competitive and customer research, defining your tier structures, determining your benefits, and making all the math work for your loyalty program. We'll ultimately help you research, implement, test, and learn your way into driving value with a status program, or as we like to call it, Loyalty Lift.
Summary
When designing your loyalty status program, you'll want to consider the following:
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First identify the framework that works best for your members and your business. Consider player progression dynamics when determining how many tiers to support and how difficult to make each of those tiers to achieve.
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Ensure you design a communication and branding plan such that members understand what tier they are in, how it's positioned in the hierarchy, what benefits accompany that tier, how to earn Tier Points, and how close they are to reaching (or losing) a tier.
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Most importantly, ensure members value the benefits that are awarded, both intrinsically and extrinsically.
And the best part – in working with playAWARDS, you get out-of-the-box access to ALL of this, along with decides of loyalty expertise, all included in your partnership.