Do loyalty programmes actually increase customer retention?

Yes, but the effect is smaller than headline statistics suggest, because a meaningful share of the member-versus-non-member spend gap reflects self selection rather than programme impact. McKinsey found roughly two-thirds of established programmes fail to deliver real value.

What's the strongest evidence that loyalty programmes work?

Accenture's finding that members generate 12 to 18% more incremental revenue than non-members, and McKinsey's finding that actively redeeming members spend 25% more than inactive enrolled members, are among the better sourced, more specific results available.

Why do some loyalty programmes fail to retain customers?

Usually because they reward a purchase the customer was already going to make, rather than changing behaviour, and because devaluation (expiring points, rising redemption thresholds) erodes trust faster than the programme builds it.

Is member spend the right way to measure loyalty programme success?

On its own, no. It's contaminated by self selection: your best customers were likely to join regardless of the programme's design. Behaviour change, like the roughly 20% activity increase linked to Sweatcoin in peer reviewed research, is a cleaner signal that the programme itself caused something.

Loyalty & Retention

How Gamification Makes Loyalty Programmes More Engaging

How gamification actually improves loyalty programme engagement, with recent, well sourced data rather than the decade old stat everyone else repeats.

30 August 2026 · Zenko Protocol · 5 min read

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How Gamification Makes Loyalty Programmes More Engaging

If you've researched gamification and loyalty before, you've almost certainly seen the claim that gamified programmes lift engagement by 47% and brand loyalty by 22%. I'm going to tell you where that number actually comes from, because nobody else seems to want to: a Snipp Interactive white paper from 2017. Nine years old, from a vendor selling gamification software, at time of writing. It's not necessarily wrong, but it's not exactly independent either, and I think you deserve to know that before you build a business case on it.

Here's the more useful version of this article: what the recent, better sourced data actually says, and how to use gamification without falling into the trap of thinking a progress bar counts as strategy.

What gamification means, properly defined

Gamification is not tiers. A lot of loyalty vendors, and I include some very well known ones, label their basic bronze-silver-gold tier structure as "gamified," and it isn't, not really. Gamification means applying actual game mechanics, points with immediate feedback, streaks, challenges, unlockable achievements, competitive leaderboards, to a non-game context. The distinction matters because tiers reward accumulated spend slowly, while genuine gamification rewards specific actions immediately, which is where the psychological hook actually lives.

The evidence that's actually current

Mastercard and CataBoom, 2025. A study covering brands that added casual games to their platforms found a 50% increase in average session time and a 22% drop in churn. Participation rates in gamified programmes ran up to 75% higher than in traditional, non-gamified schemes. This is the strongest single data point in this whole piece, because it's recent, it names two credible organisations, and the outcome (churn, not just "engagement") is a number that actually matters to a finance director.

Ulta Beauty. In-app mini-games produced an 86% returning-user rate the following week among people who played them. That's a real, name-attached result, not a vendor's aggregate claim.

Duolingo streaks. Widely reported to retain around 55% of users after a full year through the streak mechanic alone. Worth verifying against Duolingo's own primary reporting before you headline it, but directionally it's the most studied example of habit-forming gamification anywhere, loyalty included.

Market growth. The global gamification market was valued at $19.42 billion in 2025 and is forecast to reach $92.5 billion by 2030 (Open Loyalty, citing Research and Markets), a growth rate that tells you brands are betting heavily on this, whatever you think of the older stats still floating around.

Practitioner sentiment. 45% of loyalty professionals surveyed by Open Loyalty named gamification the trend most likely to shape the next two to three years, ahead of automation and partner marketing. People building these programmes for a living think this is where the value is.

Why gamification beats a plain points balance

Brandmovers made an argument I think is the sharpest one in this whole space: a points balance is a commodity a competitor can match with a slightly better introductory offer. A streak, a status level, or a collection of earned achievements cannot be matched that way, because the customer built it themselves over time. That's a switching cost a discount code will never create.

This is also where gamification quietly becomes the bridge into action based loyalty, which I cover in more depth on the examples page. Once you're rewarding a streak of workouts, or a run of completed learning modules, or consistent sustainable purchases, you've already left points-for-spend behind. You're rewarding a pattern of behaviour, which is a different and frankly more valuable thing to be building.

A practical mechanic by mechanic starting point

Streaks work best for high frequency, low effort actions: daily check-ins, daily learning modules, daily movement. The Duolingo model.

Challenges work for time-bound, higher effort actions: a step challenge over a week, a savings challenge over a month, a learning module series over a season.

Leaderboards work when there's a social or competitive audience already, sports clubs, fitness communities, gaming audiences. They can backfire with audiences who find competition off-putting, so test before rolling out broadly.

Achievement badges work as a persistent record of what someone's done, useful for programmes where the member's history itself is the reward, not just the redemption at the end.

Where this connects to what we build

Zenko's Learn, Move, Shop, and Play mechanics are built on exactly this logic: verified actions, immediate feedback, and rewards tied to real behaviour rather than a slow-accumulating points balance. If you want the detail on how brands fund and deploy that, our brands page walks through it. For the full picture of how this fits against points, tiers, and membership models, go back to loyalty programme examples across every model, or read the complete 2026 guide this piece sits under.

FAQ

Does gamification actually improve loyalty programme engagement?

Recent, well sourced evidence says yes. A 2025 Mastercard and CataBoom study found a 50% increase in session time and a 22% drop in churn from gamified mechanics, and participation ran up to 75% higher than in traditional programmes.

Is the 47% engagement lift statistic from Snipp still accurate?

It comes from a 2017 vendor white paper, so treat it as an old, self-interested data point rather than current independent research. The 2025 Mastercard and CataBoom findings are a better, more current reference.

What's the difference between a tiered loyalty programme and a gamified one?

Tiers reward slow, accumulated spend and are often mislabelled as gamification. True gamification applies game mechanics, streaks, challenges, immediate feedback, to specific actions, which tends to produce a stronger and faster engagement response.

What gamification mechanic should I start with?

Streaks for frequent, low-effort actions like daily check-ins. Challenges for time-bound goals. Leaderboards only where your audience already has a competitive or social culture. Badges where a persistent record of achievement is itself valuable to the member.