1. INTRODUCTION

In an increasingly competitive business world with low switching costs for customers, brands are making it a priority to gain loyal customers who repeatedly choose them. To attract and engage customers, brands use a variety of marketing tools, among which loyalty programmes stand out Yi & Jeon, 2003. As a result, the loyalty programme market is currently valued at more than US$5.5 billion and is expected to exceed US$24 billion by the end of 2029 Faria, 2023.

Loyalty programmes are defined as a marketing tool ‘designed to build customer loyalty by providing incentives to profitable customers’ Yi & Jeon, 2003, p. 230. Companies use loyalty schemes to increase the customer lifecycle by creating a long-term company-customer bond based on interactivity and individualisation Meyer-Waarden, 2007. Thus, instead of benefiting consumers in a single purchase with one-time offers Liu, 2007, loyalty programmes have a long-term orientation, as they allow consumers to accumulate some form of ‘currency’ that they can redeem for rewards in future purchases Liu & Yang, 2009.

The origin of loyalty programmes dates back to the end of the 18^th century, when U.S. retailers started giving customers copper coins after their purchases, which they could redeem on their next purchases Kim et al., 2021. Although this strategy was popular in terms of customer retention, retailers found that using coins was costly, so in the late 19^th century, copper coins were replaced by stamps. To encourage loyalty, consumers received small stamps that were glued to loyalty stamp cards to redeem them for products. This became a mass phenomenon, to the point that, during the 1930s, American retailers issued three times as many stamps as the U.S. Postal Service itself Kim et al., 2021. During the 20^th century, loyalty programmes experienced a new boom, following the launch of an important one for an American airline, leading to the move from stamps to cards Kim et al., 2021. Card-based loyalty programmes caught the public’s attention and brands began to issue loyalty cards to their customers. Nowadays, while physical loyalty cards are still in use, it is unreasonable to expect consumers to carry so many of them in their wallets. Therefore, the use of physical cards has been replaced by digital ones on mobile apps, which are more convenient and environmentally-friendly, representing the future of loyalty schemes.

Despite their advantages in terms of convenience, the effectiveness of loyalty programmes is decreasing Hollebeek et al., 2021. In the United States, consumers belong to 16.6 loyalty programmes on average, but actively participate in only 7.6 of them Bond Brand, 2022. This shows that, although many customers join several loyalty programmes, they often do not engage with them.

Prior research has proposed the use of gamification to potentially increase the effectiveness of loyalty programmes and solve this dilemma Hwang & Choi, 2020. Gamification is a form of motivational design that applies game elements and mechanics (e.g., points, levels and rewards) to non-game contexts to motivate certain behaviour Deterding et al., 2011 and promote user’s overall value creation Huotari and Hamari, 2017. A recent study by Merkle (2023 reported that nearly one-third of participants think there should be games with loyalty programmes. However, ‘despite this growing trend in marketing practice, academic insight into gamified loyalty programmes’ nature, dynamics, and effectiveness lags behind’ Hollebeek et al., 2021; p. 1.

To bridge this knowledge gap, in this study, a model has been designed and tested based on the ‘value get, value give’ framework Itani et al., 2019 as a means to explaining how gamified loyalty programmes create value for customers and whether and how this value is returned to the firm in the form of customer engagement behaviour.

By taking this approach, this paper contributes to the literature in several ways. Firstly, it provides empirical evidence to support Itani et al.’s ‘value get, value give’ 2019 theoretical framework for gamified loyalty programmes, analysing how gamification adds value to customers and firms. Secondly, the analysis of the perceived value of a gamified loyalty programme has recently gained the attention of scholars. However, existing academic research has focused solely on the hedonic and utilitarian value of these programmes (e.g., Bravo et al., 2023; Gandasari & Mauritsius, 2023; Kristian & Napitupulu, 2022. Therefore, this study contributes to the literature by empirically analysing additional sources of value for customers, as identified by Meyer-Waarden et al. (2023): hedonic value, financial value, personalisation value, and preferential treatment value. Additionally, this paper responds to recent calls for a deeper analysis of the effectiveness of gamified loyalty programmes and their potential to develop greater engagement Lim et al., 2022. In particular, following Bravo et al. (2023), this study improves the understanding of gamified loyalty programmes by empirically testing the specific customer engagement behaviour proposed by Pansari & Kumar (2017) that add value to firms, differentiating between transactional and non-transactional engagement behaviour. Finally, this study provides recommendations for practitioners.

2. CONCEPTUAL FRAMEWORK AND HYPOTHESIS DEVELOPMENT

Gamification is a tool increasingly used in various contexts, from education to business, to harness the motivational power of games for the players to act in a certain way. Gamification is defined from a design perspective as ‘the use of game elements and game-design techniques in nongame contexts’ Werbach & Hunter, 2012, p. 26. A similar definition is proposed by Sailer et al. (2017, p. 372): ‘the process of making activities in non-game contexts more game-like by using game design elements’. Meanwhile, Huotari and Hamari (2017, p. 25) defined gamification from a service marketing perspective as ‘the process of enhancing a service with elements to create gamified experiences with the goal of supporting user value creation’.

Compared to conventional loyalty programmes, gamified loyalty programmes are more experiential and effective and engender greater consumer loyalty Hwang & Choi, 2020. Likewise, gamification improves the attractiveness of loyalty programmes by influencing customers’ perceptions of playfulness and reward satisfaction Bravo et al., 2023. Dreher and Ströbel (2023) have analysed how gamified loyalty programmes facilitate value creation, finding that gamification plays a vital role in them, due to customers being more willing to engage in value co-creation. In particular, recent academic research has demonstrated that if the gamified loyalty programme is entertaining, in fashion and original, it is perceived as having more hedonic and utilitarian value, leading to satisfaction, continuance intention and loyalty Kristian & Napitupulu, 2022. Gandasari and Mauritsius (2023) have also shown that gamifying a loyalty programme increases customers’ perceptions about its hedonic and utilitarian value, which subsequently manifests itself in the form of greater satisfaction and loyalty. Likewise, Hollebeek et al. (2021) have anticipated that gamified loyalty programmes boost customer engagement value from direct contributions (e.g., purchases) and indirect (e.g., advocating).

Drawing on engagement theory and relationship marketing literature, Itani et al. (2019) have developed the conceptual framework ‘value get, value give’. From a customer perspective, this tool builds on the norm of reciprocity and proposes that the value customers receive from a firm (or brand) creates a customer-firm relationship that motivates customers to create some kind of value for or benefit to it in the form of engagement; in other words, the more value customers obtain, the more value customers give back. Based on this framework, the proposed model analyses the effect of four sources of value that customers could receive from gamified loyalty programmes (i.e., hedonic value, financial value, personalisation value and preferential treatment value) on their satisfaction with the programme and their subsequent influence on their customer engagement behaviour towards the programme, which are a source of value for the firm. Figure 1 shows the proposed model.

Figure 1Proposed model 

The first part of the ‘value get, value give’ conceptual framework states that the value customers receive from a firm will foster a beneficial customer-firm relationship Itani et al., 2019. According to previous research, customer satisfaction, defined as ‘a pleasurable level of fulfilment related to consumption’ Oliver, 1997, is an appropriate construct to represent this customer-firm relationship Gandasari & Mauritsius, 2023.

Previous research has shown that customer-firm relationships and customer behaviour are influenced by their value perceptions Busalim et al., 2021; that is, when customers perceive value from what a firm is offering, they act accordingly and, hence, create value for it. In gamified loyalty programmes, the perceived value depends on the relationship between the benefits and costs perceived by the user Meyer-Waarden, 2013, so when the benefits or rewards obtained are perceived as valuable, a customer-firm relationship is generated. Recently, Meyer-Waarden et al. (2023) proposed the aforementioned four sources of value for customers regarding loyalty programmes.

The first abovementioned source, hedonic value, refers to the enjoyment experienced directly from making the purchase Dedeoglu et al., 2018. Gamified loyalty programmes may provide their users with hedonic value from the entertainment and pleasure obtained from accumulating and redeeming points Hagtvedt & Patrick, 2009. Previous research has demonstrated that if hedonic value is perceived, customer attitudes and behaviour are positively affected; indeed, since enjoyable playability from a gamified system leads to its users finding the interaction intrinsically interesting Moon & Kim, 2001, hedonic value results in more positive attitudes and higher participation Hwang & Choi, 2020 as well as greater engagement with the programme Meyer-Waarden et al., 2023. Additionally, previous studies have demonstrated that hedonic value is an important predictor of satisfaction Lee & Kim, 2018; Ryu et al., 2010. In the particular context of loyalty programmes, Kyguoliene et al. (2017) found that hedonic benefits, or specifically exploration and entertainment, which are encouraged from trying out new products and the accumulation and exchange of points, positively influence customer satisfaction with the loyalty programme. Therefore, the following hypothesis has been proposed:

Perceived financial value refers to the tangible benefits provided by the loyalty scheme that correspond to being motivated by economic incentives such as discounts, reward cards or vouchers Meyer-Waarden et al., 2023. In a gamified context, this financial value is related to the satisfaction obtained from the rewards, or, to put it another way, the degree to which the customer enjoys the reward received Högberg et al., 2019. These can positively reinforce behaviour and increase loyalty to the programme Lee et al., 2015, boost intention to participate in future activities Högberg et al., 2019 and promote engagement behaviour towards it Meyer-Waarden et al., 2023. Previous literature has found that financial value influences customer satisfaction Lee and Kim, 2018; Ryu et al., 2010. Specifically, Kyguoliene et al. (2017) showed that the savings gained from participating in a loyalty programme have a greater influence on customer satisfaction than any other benefit associated with it. In fact, these savings are decisive when signing up for a loyalty programme Leenheer et al., 2007. Thus, the following hypothesis has been proposed:

Perceived personalisation value refers to personalised contact and offers that customers receive based on their tastes and previous purchase patterns Personalisation increases the value perceived by users, fostering customer-firm relationships and increasing engagement with loyalty programmes Meyer-Waarden et al., 2023. A high level of personalisation can increase customer satisfaction, which is achieved when the perceived benefits exceed their expectations Ding & Keh, 2016; Wang et al., 2010. In the specific context of loyalty schemes, Aydin (2022) has recently shown that personalisation can provide higher satisfaction when perceptions of intangible value are enhanced. Based on these arguments, the following hypothesis has been proposed:

Finally, participation in a loyalty programme can lead users to perceive value for receiving preferential treatment that satisfies their symbolic and emotional needs, offering a level of status and personal recognition within a privileged group Meyer-Waarden et al., 2023. Priority access to certain products and services, unique offers and invitations to exclusive events are some examples of preferential treatment received by certain users of loyalty programmes. This provides a sense of belonging and a feeling of importance and integration Brashear-Alejandro et al., 2016. A favourable result of preferential treatment is the creation of hard-to-imitate bonds that drive customers to maintain the customer-firm relationship Yi & Jeon, 2003 and increase their engagement with the programme itself Meyer-Waarden et al., 2023. Applying gamification in certain contexts results in higher perceived user recognition, leading to positive outcomes such as increased satisfaction Hamari & Koivisto, 2015. In the context of loyalty programmes, Kyguoliene et al. (2017) found that recognition and social benefits, understood as the feeling of belonging to a group or the perception of special attention, influence customer satisfaction with the loyalty programme. Considering this, the following hypothesis has been proposed:

The second part of the conceptual model ‘value get, value give’ states that customers tend to give back to a firm (or brand) the value received, with different types of behaviour that show how engaged they are with it Itani et al., 2019. Pansari and Kumar (2017) defined the concept of engagement with a firm (or brand) as ‘the creation of value from a customer to the company, either through a direct or indirect contribution’. The direct (or transactional) contribution consists of customer purchases Kumar, 2010. In other words, each time a customer makes a purchase, value is created due to the company’s sales increasing Kumar & Pansari, 2016. In addition to purchases, customers show their engagement with brands with non-transactional behaviour that indirectly provides value and contributes to sales. The first of these forms of behaviour corresponds to customer influencer value, which is the value of social influence that a customer exerts on other potential customers Kumar et al., 2010. Engaged customers do so in a variety of ways, from engaging in traditional offline word of_mouth (WOM), to posting e-WOM on social media Itani et al., 2020. In addition to obtaining value with organic WOM, brands can also benefit from customer referral value Kumar et al., 2010; this means that there are referral programmes which give customers incentives if they invite profitable customers to the brand Kumar & Pansari, 2016. One example is ‘bring a friend’, common in loyalty programmes, where many brands motivate their customers to recommend friends, relatives or social media contacts in exchange for points, discounts or gifts. Finally, customers can also provide value indirectly to firms with customer knowledge value Kumar et al., 2010, which refers to how valuable the information is to firms when it comes to being provided with innovative ideas and improvements based on customers’ knowledge and experience.

Previous research has shown that customer engagement with firms provides them with greater value Pansari & Kumar, 2017, as the more engaged customers are, the more loyal they are Gao and Huang, 2021; Monferrer et al., 2019; So et al., 2015; Wongsansukcharoen, 2022, the more willing they are to pay greater amounts Kumar and Kaushik, 2022 and the higher their purchase intention and repeated purchase behaviour are Prentice et al., 2019; So et al., 2015.

For this reason, it is important to analyse how gamified loyalty programmes can generate long-lasting forms of engagement that provide value to a brand Bitrián et al., 2022. Indeed, previous studies have shown that the perceptions that customers have about a loyalty programme tend to be transferred to perceptions about the brand. Thus, the more loyalty to a programme there is, the greater the loyalty to the brand is So et al., 2015, in the same way that the more engagement with the scheme there is, the greater the engagement with the brand is Bitrián et al., 2022; Bruneau et al., 2018; Hollebeek et al., 2021.

Customer satisfaction is probably the most recurrent driver of customer engagement behaviour Pansari & Kumar, 2017; Van Doorn et al., 2010. Previous studies have shown that the more satisfied customers are, the more likely it is that they can be retained and the more loyal they are as a consequence Mili & Ferro-Soto, 2023. Furthermore, the more satisfied users are, the more engagement they show Agyei et al., 2021; Cambra-Fierro et al., 2016 and the more each specific type of engagement behaviour can be seen as well Bravo et al., 2020. Specifically, satisfaction has been shown to have a positive effect on customers’ purchase and repurchase behaviour Verhoef et al., 2002, as well as on impulse buying Thakur, 2019. In addition, satisfied customers are willing to promote more of the products and/or services offered by the brand Thakur, 2019 and make word-of-mouth recommendations Bravo et al., 2020; Choi & Kandampully, 2019. Finally, while some researchers have considered that satisfied customers make fewer suggestions for improvement Choi & Kandampully, 2019, other studies have identified that customer satisfaction motivates the clients to provide feedback to brands with suggestions or complaints Bravo et al., 2020. Considering the above, the following hypothesis has been proposed:

3. MATERIAL AND METHODS

4. RESULTS

Partial least squares (PLS) structural equation modelling with SmartPLS 3.0 was used to analyse data (Ringle et al., 2015). PLS simultaneously assesses the measurement and structural models, whose two steps are described below.

5. DISCUSSION AND CONCLUSIONS

This study has proposed and tested a model to explain how the perceived value of a gamified loyalty programme increased customer satisfaction with it and subsequently led to customer engagement behaviour that provided value to the company in question.

The findings revealed that different perceived values of the gamified loyalty programme contributed differently to customer satisfaction. In line with previous studies (e.g., Lee & Kim, 2018; Ryu et al., 2010, this one has provided empirical evidence of the positive influence of hedonic and financial value, demonstrating that the entertainment and rewards offered by the gamified loyalty programme promoted customer satisfaction. However, contrary to predictions, perceived personalisation and preferential treatment value did not contribute to increasing customer satisfaction. Although unexpected, these results are in line with Mimouni-Chaabane and Volle (2010), who affirmed that preferential treatment does not promote customer satisfaction. The characteristics of the research context may provide an explanation for this; in ‘Más Renfe’, preferential treatment to certain customers corresponds to access to Club Lounges and free parking at stations. However, these perks are exclusively for ‘Más Renfe Gold’ and ‘Más Renfe Platinum’ cardholders. Given that these members represented just a minority of our sample (i.e., slightly over 5% of respondents), the effects of preferential treatment were minimal.

On the other hand, this study has empirically demonstrated that customer satisfaction with the gamified loyalty programme promoted certain types of customer engagement behaviour. Specifically, customer satisfaction was positively related to customer lifetime value, supporting previous research claiming that it influences purchase and repurchase behaviour Verhoef et al., 2002. Satisfaction with the programme also positively affected influencer and referral value, which is consistent with previous research showing that a high level of satisfaction leads customers to talk about a brand Choi & Kandampully, 2019 and recommend it Bravo et al., 2020. This study also backs up the findings of Bravo et al. (2020), in that customer satisfaction fosters knowledge value, meaning that satisfied customers provide feedback to brands about their own experiences and thus have an opportunity to improve product and service offerings.