Brands are packing loyalty programs with gamification features like points, achievement badges, engagement streaks, and contests. But does any of it actually build lasting loyalty—or just create the illusion of engagement?
Luke Reynebeau, our Vice President of Customer and Retention Marketing here at Bitly, puts it plainly: “We’ve over-gamified and under-strategized, and that leads to ineffectiveness.”
Let’s cut through the hype and look at how to design gamification that strengthens real brand relationships, not just leaderboard rankings.
Note: The brands and examples discussed below were found during our online research for this article.
What gamification looks like in loyalty programs
Gamification in loyalty programs adds elements of traditional gameplay, like competition, rules, and point systems, to everyday brand interactions. Customers might earn points or badges for making a purchase, logging into an app, or completing specific activities. Some programs layer in leaderboards, login streaks, or seasonal challenges to keep users engaged.
In recent years, gamification has surged as a marketing strategy. In fact, the global market is expected to reach $89.75 billion by 2031. While this trend began in consumer products, it’s now gaining traction in B2B.
Gamification can drive results when it’s purposeful, not just layered on for show. Its success depends on timing, brand alignment, and whether it supports outcomes your customers already care about.
Why many brands over-gamify and under-strategize
With gamification trending, many brands have rushed to add it to their loyalty programs. “There are levels and tiers and badges and perks and rewards aplenty. For what?” says Luke.
When these tactics aren’t grounded in brand value or consumer expectations, they become novelty at best, and distraction at worst. This kind of surface-level “engagement theater” may look impressive, but it can ultimately erode trust and weaken your program’s credibility.
Overcomplicated or coercive mechanics make things worse. Instead of driving loyalty, they frustrate users and push them away, especially when the experience feels confusing, crowded, or disconnected from what customers actually want.
When gamification works vs. when it fails
When done well, gamification can help your brand stand out and build genuine loyalty. But when customer experience takes a back seat, it often leads to complexity without a clear benefit.
Here’s how gamification drives customer engagement when it aligns with user goals, and how it turns customers off when it doesn’t.
When gamification works: Alignment with customer goals
Duolingo is one of the most cited success stories in gamified design. The language learning app uses daily streaks and playful notifications (often delivered by its famously snarky characters) to keep users coming back. It works: users who reach a seven-day streak are 3.6 times more likely to complete their course.
What makes this effective is more than just the mechanics. “Duolingo has a strong POV,” Luke explains. “Streaks and notifications align with how people may learn a language.”
Apple Watch takes a similar approach. Its rings and badges nudge users to stand, move, and exercise consistently—goals that already align with many users’ routines.
The takeaway: Gamification works best when it reinforces behaviors your customers are already motivated to do, not when it tries to manufacture motivation from scratch.
When gamification fails: Premature or misaligned
Gamification often falls flat when it’s tied to irrelevant or low-value actions. In these cases, it can feel excessive or even manipulative, undermining trust and weakening the brand experience. Overcomplicated point systems only make things worse, turning engagement into a transactional exercise.
Another common issue is timing. Effective gamification usually builds on existing loyalty. If your program isn’t gaining traction, it may be because customers don’t yet see enough value in the core experience.
“It might just be premature gamification,” Luke explains. “What are you gamifying? And does that actually help the customer get more value?”
Acquisition vs. retention: The gamification debate
Before adding gamification to your loyalty program, ask what you’re really trying to achieve. Are you focused on driving sign-ups and short-term growth, or building long-term loyalty with your existing customer base?
Gamified tactics like contests and giveaways often succeed at acquisition, sparking spikes in downloads or account creation. But shallow strategies rarely support retention.
According to Luke, the real opportunity lies in using gamification to reinforce the right behaviors. When it aligns with user interests and adds value, it encourages repeat purchases and engagement, and can even turn loyal customers into vocal advocates.
Lessons from Amazon Prime to note
Gamification can be powerful, but it isn’t a requirement for loyalty. Amazon Prime proves the point. With 75% of U.S. shoppers enrolled in Prime, it’s one of the largest paid loyalty programs in the world, and it succeeds without unnecessary frills.
The reason is simple: Prime delivers a clear, compelling value proposition. Fast, reliable shipping gives members exactly what they want, when they want it. That benefit is so strong that gamified layers would only distract from or dilute the offer.
“Loyalty does not require gamification. Gamification does not automatically create loyalty,” says Luke. For any program to succeed, gamification should support customer interests and reinforce the brand’s core value, not replace it.
The pitfalls of gamification in loyalty programs
Gamification in loyalty programs is usually well-intentioned, but it doesn’t always deliver what customers need. To keep up with trends, many brands fall into predictable traps that ultimately cause their programs to fail. Here are the most common pitfalls and how to avoid them.
1. Overcomplication creates transactional behavior
In an effort to stand out, many brands create complex point systems and heavy game mechanics. Instead of creating affinity, these programs overwhelm and confuse users.
Luke puts it simply: “As soon as you start to layer in goals and objectives for various stakeholders and different groups, you end up with complicated point systems, demotivating leaderboards, and offers that fall flat.”
When rules pile up, customers tune out. Programs become transactional, attracting people who chase discounts and freebies but have little interest in the brand itself.
To avoid this, focus on meaningful interactions that deliver direct value. Keep mechanics simple enough for customers to understand and enjoy immediately, without having to practice or read a long list of rules.
2. Superficial rewards don’t build affinity
To create a positive gamification customer experience, the rewards need to feel worthwhile. Too often, brands lean on shallow incentives that spark short-term participation but fail to build lasting loyalty.
These superficial perks reduce the brand relationship to a transaction. Low-quality rewards can even backfire, making customers feel undervalued.
Luke notes that you shouldn’t expect too much from offering gift cards. Instead, focus on benefits your customers truly care about, like limited-edition items or meaningful discounts.
For example, a fast food chain could reward customers with savings on its most popular menu items. That provides real value, reinforcing habits customers already enjoy.
3. Strategy misalignment damages loyalty
The strongest gamification strategies stay true to both your brand identity and your customers’ needs.
When that connection is missing, customers lose motivation. Any participation becomes hollow, which erodes the chance of building a genuine emotional bond.
The fix is to design around the overlap between what your brand stands for and what motivates your customers. For example, if your audience values entertainment and your brand emphasizes fun, you might build an arcade-style game in your mobile app with built-in rewards. In this case, the game experience is the draw, while the rewards act as a bonus.
How Bitly supports gamification testing and measurement
If you decide to add gamification to your loyalty program, Bitly makes the customer experience seamless and measurable. Here’s how we do it:
- Bitly Links: Drive your audience from emails, social media posts, or ads directly to your gamified experience with branded short links.
- Bitly Codes: Boost sign-ups with branded QR Codes on in-store signage and print materials.
- Bitly Pages: Launch a no-code, mobile-optimized landing page for your loyalty program. Choose from a template, add your brand elements, and go live in minutes.
- Bitly Analytics: Track clicks, scans, and page views to see which features resonate most with your audience.
Bitly helps you create custom assets that build trust and strengthen brand recognition. With short links, QR Codes, and landing pages, customers move between touchpoints without friction.
Invest in gamification as a tool, not a guarantee
Gamification isn’t inherently good or bad. It’s a marketing tool that works when it’s purposeful and customer-focused, and it falls flat when it’s used as a gimmick. In both gamification in retail and loyalty programs, success comes from supporting customer intent and brand value, not from trying to manufacture motivation. When it reinforces what customers already want, it becomes a catalyst for deeper loyalty.
Bitly makes it easy to test and measure what’s working. Use branded links and QR Codes to connect customers to your loyalty program, then track engagement with Bitly Analytics. With every scan or click, you’ll see which features truly drive participation. That insight helps you double down on what builds loyalty and cut back on what doesn’t, turning data into a competitive edge.
Ready to see what resonates? Sign up for Bitly today and start turning loyalty engagement into measurable growth.
