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The influence of gamification on customer loyalty
David Stegenga - 11017945
Bachelor’s Thesis and Thesis Seminar Business Administration
Academic Year 2017/2018 - Semester 2, Period 3
26th June 2018
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Statement of Originality
This document is written by David Stegenga who declares to take full responsibility for the contents of this document.
I declare that the text and the work presented in this document are original and that no sources other than those mentioned in the text and its references have been used in creating it.
The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.
3 Table of contents Page Abstract ………. 4 Introduction ……….. 5 Theoretical framework ……….. 6 Methodology ………. 20 Results ……….….. 26 Discussion ………. 30 Conclusion ………. 35 References ………. 36 Appendix ……….. 42
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Abstract
This study researched the direct effect of gamification on customer loyalty as well as the indirect relation between these variables. This study also investigated if enjoyment and engagement mediated the relation between gamification and customer loyalty. The
relationships were tested by using an online questionnaire with a publicly available link that was sent to the participants through a text by cell phone. The total number of participants that took part in the research was 134 (N = 134), who were not randomly chosen. The results demonstrated a significant direct effect of gamification on customer loyalty and a significant effect of engagement mediating the relationship between gamification. Enjoyment was also found to have a significant effect on the relation between gamification and customer loyalty, thus mediating this relationship. Furthermore, the limitations of this research as well as suggestions for further research are discussed.
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Introduction
Since a few years, gamification has become rather noticeable in the marketing industry as well as in academia (Huotari & Hamari, 2017). Gamification is the use of game design elements in non-game contexts for the benefit of engagement (Mora, Riera, Gonzalez & Arnedo-Moreno, 2015). However, gamification has not been studied for so long (Domínguez, Saenz-De-Navarrete, De-Marcos, Fernández-Sanz, Pagés & Martínez-Herrálz, 2013; Hamari, Koivisto & Sarsa, 2014). From a theoretical perspective, the use of game design elements needs more research and attention, especially since gamification has already shown some value by delivering social contributions, such as causing an increase in the motivation and engagement of students in education or learning (Li, Whiteson, Knox & Hung, 2018). In addition, gamification already proves its worth in health care by using health applications to make users aware of their health as well as giving the users a personal advice for an optimal health behavior (Deterding, Dixon, Khaled & Nacke, 2011). Current frameworks and theories concerning the affective and motivational aspects of gamification only give a slight overview over the known literature (Hamari, 2013; Hofacker, De Ruyter, Lurie, Manchanda &
Donaldson, 2016). However, the current knowledge can work as a foundation for researching new aspects of gamification, which may eventually lead to undiscovered positive and negative results of gamification. By investigating findings from previous studies, such as the possible consequences of gamification: the degree of engagement, the level of enjoyment and customer
loyalty can be mapped. However, as previously mentioned, there is still a lack of literature
about gamification, especially the potential negative effects of gamification are sporadically explored (Harwood & Garry, 2015; Hofacker et al., 2016). Consequently, uncertainties about the kind of relationship between the use of game design elements and customer loyalty arise. In addition, engagement and enjoyment are important factors to take into account with, regarding the research on this relationship (Hanus & Fox, 2015). All together, the main
6 question is: does gamification as a marketing strategy ensure customer loyalty?
The next section contains the theoretical framework. In here, the existing academic literature concerning gamification, engagement, enjoyment and customer loyalty is reviewed elaborately. Moreover, the hypotheses are stated with a corresponding conceptual model. In the third section, the methodology is described which demonstrates the research setting, the sampling and the variables that are used. The results are discussed in the fourth section and the fifth section includes the discussion, which reviews the implications and limitations of this research and the suggestions for further research. Ultimately, the conclusion is the sixth section in which the research is summarized concisely.
Theoretical framework
The term gamification is used in several areas, such as the marketing industry, in education and also in health care (Deterding et al., 2011; Hamari et al., 2014: McCallum, 2012). The primary reason why gamification is used, is because the game elements are seen as a form of entertainment (Deterding et al., 2011). On top of that, since the game design elements draw the attention from others, these elements are used to stimulate users with the goal to interact with the company that provides the game design elements (Deterding et al., 2011). Therefore gamification is mainly used as a promotion, which showed to be a great part of a company’s marketing strategy (Huotari et al., 2017). In education, game design elements are found to be successful as these elements increase motivation, satisfaction and enjoyment in learning tasks (Li et al., 2018). However, gamification used in education has some side effects as well, such as negative outcomes of too much competition and difficulties regarding task evaluations. In the business world where organizations regularly offer new employees an internship with a complete training, while afterwards these organizations do not pay as much attention to these employees as earlier. Instead of wasting that time and quality of the new employees, game design elements are used to ensure this does not happen (Kapp, 2012). Gamification can be
7 seen as a good solution for this problem, because gamification techniques can be served to freshen the employees’ knowledge (Kapp, 2012). Also in health care, game design elements are used to ensure engagement, which in this context has the goal to make people more aware of their health (King, Greaves, Exeter & 2013). An example of health gamification is the widely availability of health applications, with Health Month as the known provider
(Deterding et al., 2011). Other examples of health gamification are the Nike + Fuelband and RunKeeper, which are also connected to applications or are applications themselves (King et al., 2013). The applications consist of software that is able to track someone’s health
behavior, moreover, the applications give personal advice and set goals for an optimal health behavior (Deterding et al., 2011). One point of negativity regarding health gamification is the used language in this area, which is found to be rather new and ugly but the expectation is that people will quickly get used to the term gamification in the healthcare field (King et al., 2013).
There is a reasonable amount of literature that shows a positive relationship between gamification and the degree of customer loyalty, however, there is not much existing literature concerning the negative effects of gamification on customer loyalty (Harwood et al., 2015; Hofacker et al., 2016). In the marketing industry, gamification is used to get customers’ attention and one way how that is accomplished, was by reassuring customers that they earn a reward if they shop frequently at the same store (McMullan & Gilmore, 2008). In this case, the game design elements were the rewards where the customers were triggered by, such that the customers felt the need to come back, which shows the important role gamification has as a marketing strategy in ensuring customer loyalty (Huotari & Hamari, 2012; McMullan et al., 2008). In this situation, game design elements had a direct function to make sure customers came back to the store to buy products, which can be expressed in a direct and positive relationship between game design elements and customer loyalty (Deterding Sicart, Nacke,
8 O'Hara & Dixon, 2011). On the other hand, gamification has also been found to have a
negative effect on the degree of customer loyalty, when companies try to create value on the long-term for customers (Nicholson, 2015). The reason why this led to a negative outcome is because many gamification systems are developed to involve customers in a permanent basis, where the customers get more points, achievements and rewards to ensure that they stay engaged with the company (Hamari et al., 2014). After a period of time, customers get bored of the systems that are designed to ensure loyalty which leads to a reduction in interest of the customers in the concerning company, eventually leading to customers that stop doing purchases at that company and perhaps go shopping elsewhere (Nicholson, 2015). The use of game design elements in game and non-game contexts has as a goal to trigger the mind of people to get the attention and ensure that people feel and stay connected with the (online) gamified system (Deterding et al., 2011). As a consequence, some users get addicted by the used game design elements, which can lead to users continuously staying occupied and involved with the gamified system and the game design elements, such as leaderboards, task achievements or badges (Ng & Wiemer-Hastings, 2005). Thus, gamification may lead to users getting addicted, which subsequently leads to users that keep coming back to stay involved with and engaged in the system that is designed to ensure customer loyalty (Nicholson, 2015).
Furthermore, a reasonable amount of research is done on the positive effects of gamification on engagement (Hanus et al., 2015; Seaborn & Fels, 2015). Game design elements can be in the form of leaderboards and badges, which stimulate users to compete with others because they may feel the need to be at the top of the leaderboards or because they per se want to be the first one to complete all the badges that are available (Hanus et al., 2015). In education, some students experienced engagement after participating in a course where gamification was used and as a result, these students were more motivated and they got higher grades overall (Hanus et al., 2015). So, after offering these competitive game design
9 elements to the users, in particular the users that were really interested in these elements, they got a better connection with the gamified system (Seaborn et al., 2015). Although, there is research that showed that the presence of gamification in education ensured an increase in engagement, there is also literature that showed that game design elements can have negative effects on engagement in education (Glover, 2013). The presence of gamification in classes also led to less participation during the courses, which indicates that gamification is a great way of seeking someone’s attention, but game design elements in non-game contexts also have a distracting function (Hanus et al., 2015). In addition, one of the reasons why users disengage themselves from the game design elements is because of the distractions or new challenging technologies that arise (O'Brien & Toms, 2008). In this situation, the resulted emotions from gamification played an important part in to what extent the game design elements had an effect on the users’ engagement, which shows that the degree of engagement is also quite dependent on the emotional state of the users (O'Brien et al., 2008).
There only is a small amount of literature written that describes a direct relationship between engagement and customer loyalty (Salanova, Agut & Peiró, 2005). However, there is more literature written about an indirect positive relationship between engagement and
customer loyalty (Salanova et al., 2005). In particular, the relation between customer brand engagement and customer loyalty is mapped (Hollebeek, 2011). Customer brand engagement is thought to have the ability to contribute to outcomes of customer loyalty, because of a process that describes customer engagement, which includes the following elements: satisfaction, commitment, involvement, trust and loyalty (Bowden, 2009). The process of engagement starts with calculative commitment for new customers, which means to which degree customers experience the need to preserve a relationship with the brand (Geyskens, Steenkamp, Scheer & Kumar, 1996). This depends on both the costs and benefits of a purchase and potentially more attractive alternatives, as well as the level of involvement that
10 is encouraged by the feeling of trust (Bowden, 2009). The customers that visit a store
regularly, who have an affective commitment towards the brand, are likely to come back to do a repurchase, which eventually results in customer loyalty (Jaros, Jermier, Koehler & Sincich, 1993). The way in which customer loyalty is achieved with regards to the more regular customers is through ensuring satisfaction, providing involvement in combination with trust and showing affective commitment (Bowden, 2009). Customers also visit companies online through the companies’ websites or via social media platforms, such as Facebook and
Instagram, where they engage in non-interactive behaviors (Gummerus, Liljander, Weman & Pihlström, 2012). An example whereby customers engaged in such behaviors was when they read comments on Facebook from other customers about their previous experiences with the company (Gummerus et al., 2012). Some companies have begun to set up communities themselves as part of a brand management strategy, which was used to expand their brand and to get a bigger and more diverse network as well as to create value for customers by providing a platform for new customers where they can read comments from other, regular customers (Witt, Scheiner & Robra-Bissantz, 2011). Moreover, customers feel connected with a particular brand when they are involved in a community with many other customers and where customers mutually share experiences and opinions about the activities or products this brand offers (Koivisto & Hamari, 2014). The customers that were first unfamiliar with the brand are now one of the customers that made the community bigger and thus, ensured customer loyalty for the brand (Gummerus et al., 2012).
As mentioned earlier, gamification directly influences engagement mostly in a positive way and engagement subsequently shows a positive or negative and a direct or indirect
relationship with customer loyalty. So, by researching the direct relationship between engagement and customer loyalty, new positive as well as negative factors that influence customer loyalty can be discovered and mapped, which may make the links between the
11 variables more comprehensible and insightful.
Furthermore, there is an extensive amount of literature about the positive relation between gamification and enjoyment (Hamari, 2013; Hamari et al., 2014; Hanus et al., 2015; Hofacker et al., 2016). Although, there is a gap in the literature regarding the relationship between gamification and enjoyment (Hamari, 2013). There are people that take part in actions that consist of game design elements in non-game contexts, not because of extrinsic motives but due to the search for a moment of enjoyment, though no study has researched this extensively (Hamari, 2013: Robson, Plangger, Kietzmann, McCarthy & Pitt, 2015).
Gamification mostly has a positive influence on enjoyment, however, not much research has been done regarding the potential negative effects of gamification on the degree of enjoyment users experience (Hamari et al., 2014). Therefore it is unsure where the negative sides of the use of game design elements in non-game contexts could lead to, so possible psychological outcomes among other things, such as enjoyment and satisfaction need to be explored. Moreover, to eventually find out what kind of influence the side effects have on the customers’ behavior, more research on the negative results of gamification is necessary. Important to notice is that gamification can have different effects on the perceived enjoyment in education in comparison to other areas where game design elements are used, such as in health care and marketing management (Hanus et al., 2015). On top of that, gamification has shown to have a short term and novelty effect on the degree of enjoyment which ensured the positive results, but after that, the use of game design elements led to a decrease in interest and a decline in enjoyment in a short period of time (Koivisto et al., 2014). Moreover, the convenience of participating in gamification is demonstrated to decrease with age and so, gamification is not that advantageous for older people (Koivisto et al., 2014). There has been studies that researched what kind of effects game design elements have in an online idea competition, on the degree of enjoyment and engagement of the participants (Seaborn et al.,
12 2015; Witt et al., 2011). The game design elements consisted here of leaderboards and the ability for participants to like and comment on other participants’ ideas (Witt et al., 2011). In addition, the participants who experienced a large feeling of enjoyment and engagement, ranked the game design elements that were used in the online competition highly, proposing that gamification was able to supplement the overall experience for some participants (Seaborn et al., 2015).
A moderate amount of studies that focused on finding a relationship between enjoyment and customer loyalty, found a positive relationship (Harwood et al., 2015;
Hofacker et al., 2016). For example, in the online shopping industry, customers that perceived enjoyment in combination with trust, seemed to seriously think about a making a repurchase (Chiu, Chang, Cheng & Fang, 2009). In addition, perceived enjoyment has lead to customers recommending others, such as relatives and friends, by means of word-of-mouth activities (Harwood et al., 2015). So, customer loyalty can be expressed in customers that have the intention to do a repurchase, customers that actually come back to a website or a physical store and customers that have the willingness to recommend others about a product or service (Chiu et al., 2009; Harwood et al., 2015). Another example is found in the mobile
telecommunication service market, where customers that perceived a high level of enjoyment and satisfaction were more likely to remain at their current providers, therefore leaving potential cheaper providers (Kim, Park & Jeong, 2004). Though, research showed that customer enjoyment and satisfaction were not the only factors that are essential in effecting customer loyalty (Hamari et al., 2014). Moreover, while customer enjoyment and satisfaction have a positive effect on customer loyalty, other variables may have a bigger impact and therefore customer loyalty can be negatively influenced in the end (Kim et al., 2004). Therefore by doing research into the role of enjoyment with regards to gamification and customer loyalty, the importance of the use of game design elements can be determined.
13 Therewith the research adds value to the existing literature about gamification. By
investigating the direct effect of gamification during organizations’ activities on customer loyalty, organizations can find out if gamification is a useful marketing strategy or a waste of time. Therefore, by using engagement and enjoyment as mediating variables, the relation between the use of game design elements and customer loyalty can provide a new perspective on gamification as a marketing strategy. This is essential, due to the fact that game design elements are a means of attracting customers and a way to make sure that these elements ensure enjoyment. So, the enjoyment people get from the game design elements ensure sustainability in the shape of an increase in customer loyalty. Hence why this research aims to demonstrate that gamification can play a crucial role in ensuring customer loyalty.
Gamification
Gamification is the improvement of services with game design elements, such as badges and points, with the aim to create gameful experiences and ultimately enhance the overall value for the customer (Huotari et al., 2017). Another way to describe gamification is as the use of game elements in non-game contexts (Deterding et al., 2011) to improve user experience and engagement (Deterding et al., 2011). In this paper, I define gamification as the use of game design elements in non-game contexts to ensure engagement. Gamification consists of three parts: the motivating game design elements, the resulting psychological outcomes and the subsequent behavioral results (Hamari et al., 2014). These parts are especially valuable when an organization tries to understand the needs and wants of customers. Nowadays, everything in an organization is fully about meeting customers’ expectations and creating an
unforgettable customer experience (Homburg, Jozić & Kuehnl, 2017). Furthermore, the main aim of engaging in customer experience management is to ensure customer loyalty for the long term which can be done by the use of game design elements (Deterding et al., 2011; Homburg et al., 2017). Moreover, gamification has also been used as a motivation to stay
14 interested at work which was in the form of asking questions about the company while
playing a board game where different prizes could be won (Kapp, 2012). This shows that the use of game design elements in different contexts has a motivating and affective influence on customers and employees.
Customer loyalty
Customer loyalty is a concept about the demeanor of a customer and relates to a customer behavioral purposes, that are measured by the probability that the customer comes back to a store (Salanova et al., 2005).An important reason for organizations to use game design elements in non-game contexts is to evoke responses such that customers display behaviors and experience emotions that have positive effects (Harwood et al., 2015). An example of such a positive result can be an increase in customer loyalty or customer satisfaction (Hofacker et al., 2016). Consumer research indicated that cognition about a product can directly influence the buying behavior in some cases (Lam, Shankar, Erramilli & Murthy, 2004). For products that can be classed as ‘thinking’ products, such as a insurance or a car, and which are directly influenced by data that consumers possess about these products, cognition is an invisible factor that stimulates customers to do a purchase and to come back (Lam et al., 2004). Game design elements, that have proven to be effective in ensuring customer loyalty (Deterding et al., 2011), that are combined with one of the examples of ‘thinking’ products, may therefore create customer value and customer loyalty.
Game design elements consist of leaderboards, task achievements and badges and these elements can induce customers to fulfill the tasks and to be the ‘winner’ of a
competition (Hamari & Koivisto, 2013). For example, customers can feel the need to come back at (online) stores when these customers are rewarded for the made purchases (McMullan et al., 2008). Stores could organize an event whereby customers get a free workshop or a gift card if these customers have earned their reward in a fair way. In this case, the free workshop
15 and the gift card are the game design elements in a non-game context and are used to attract customers and reward them, thus to create value for the customers. By attracting customers in such a way, they are probably more eager to keep coming back to the stores (McMullan et al., 2008). Besides that, for some customers game design elements stand out of ordinary things and thus, they may get more easily triggered by the use of gamification than others.
Customers that engage in gamification can be very committed to game design elements like leaderboards and task achievements, which may lead to investing much time and effort in being involved with these elements (Hamari et al., 2013). These customers can therefore get addicted by the game design elements and that makes it likely that customers are trying to stay occupied with the elements and events concerning gamification (Ng et al., 2005). So, the use of game design elements in non-game contexts can have an effect on the psychological behavior of customers in the form of continuously feeling the need to stay occupied with gamification, which is indicated by an addiction and this all leads to customer loyalty. Due to findings in previous research, gamification has showed to have a powerful influence on customers and on their purchase behavior, which leads to gamification directly influencing customer loyalty and that relationship is showed by the first hypothesis:
-H1: There is a direct and positive relationship between gamification and customer loyalty.
Engagement
Engagement is a process that consists of multiple characteristics that differ in the degree of intensity, depending on a link between user and system characteristics that arise while interacting (O'Brien et al., 2008). In marketing management, engagement is defined as the provision of customer experiences with the intention to build more meaningful interactions between the organization and customers (Sashi, 2012). Furthermore, gamification has proven to be valuable in the education field, where gamification has been used with the aim to provide better education (Li et al., 2018). The use of game design elements resulted in
16 students experiencing a feeling of engagement and besides that, gamification led to an
increase in motivation (Hanus et al., 2015). This example shows that the use of game design elements in non-game contexts can ensure an increase in engagement as well as an increase of the behavior of people (Hanus et al., 2015). Game design elements used in a non-game
context, such as in an online idea competition, can directly lead to a feeling of engagement. For example, a brand starting an idea competition an trigger people to participate in this competition, and people could participate here by writing a comment about an idea or sharing it with friends (Seaborn et al., 2015). In this example, reacting to ideas and sharing others’ ideas were part of gamification, thus can be seen as game design elements here. Moreover, the people that participated got a feeling of engagement with the brand, which was mainly
because of the used game design elements (Seaborn et al., 2015). Gamification can also lead indirectly to engagement among other things by competition, which guides the relation between gamification and engagement (Muntean, 2011). A situation where competition can lead to engagement is when young kids collect football pictures, they want to have them all and they try to complete their collection before a friend completes his collection. Therefore collecting these pictures can lead to an extrinsic motivation and competition and thus, can result in striving to be the first to have all the football pictures. If a lot of football pictures packages are needed to complete a collection, the young kids need to feel more connected to the store where they come back regularly and buy the football pictures.
Within organizations, engagement influences the performance of employees in a good way and this performance eventually determines the level of loyalty towards the organization (Salanova et al., 2005). In this case the employees are central but the same counts for
customers, because customer engagement positively influences customer satisfaction and loyalty, thus an increase in engagement leads to customer loyalty (Gummerus et al., 2012). Engagement has indirectly led to customer loyalty and there were several factors mediating
17 this relation. Customers that already have a feeling of engagement with a brand, need to experience satisfaction, involvement in combination with trust and an affective commitment for brands to pursue customer loyalty (Bowden, 2009). An actual example of trying to ensure customer loyalty via among other things engagement, is companies creating their own
communities (Witt et al., 2011). These communities are used to create value for customers that already have a good connection with the company, to eventually ensure customer loyalty (Koivisto et al., 2014). Customers that have a feeling of engagement with a company are likely to write positive reviews and share the good activities and products that they offer, which can all be read on a platform, such as Facebook or Instagram (Witt et al., 2011). The customers that already have a connection with the company are likely to come back to do more purchases because of the recommendations and positive reviews about the companies’ products that have been published on the platforms (Yang & Peterson, 2004). Therefore, if game design elements are used by a brand to increase customer engagement, communities can ensure customer loyalty by providing and spreading positive feedback about a company’s products and services (Srinivasan, Anderson & Ponnavolu, 2002). Building more meaningful interactions and thus, more sustainable relationships with customers leads to an increase in customer loyalty.
As mentioned earlier, gamification has a direct effect on customer loyalty, but this relation is also influenced by other factors that emerge from the use of game design elements in non-game contexts (Harwood et al., 2015). Game design elements that are used in
combination with a special action where customers are able to earn a reward, such as free gift cards or free tickets to a theme park, can trigger customers to engage in this action and to keep buying products in a brand’s store. As a consequence of the use of game design elements in this special action, customers get more motivated to purchase products due to the rewards they have in mind, and thereafter customer satisfaction and engagement arise (Harwood et al.,
18 2015). Due to the special actions that the brand used, customers can get a feeling of
engagement with the brand, which eventually leads to customers coming back to do purchases from that brand and thus, ensure customer loyalty (Jaros et al., 1993). So, emotional values or psychological outcomes, such as customer satisfaction and engagement guide the relationship between motivational affordances and behavioral outcomes (Hamari et al., 2014). Therefore, engagement has a mediating role in the relation between gamification (motivational
affordances) and customer loyalty (behavioral outcome). So, based on existing literature gamification is as an important trigger for customers to experience satisfaction and
engagement, with the goal to ensure that customers keep coming back to do purchases. From
this follows the subsequent hypothesis:
–H2: Engagement is mediating the relationship between gamification and customer loyalty.
Enjoyment
In psychology, enjoyment is defined as the contentment of different needs, which concern mental well-being (Tamborini, Bowman, Eden, Grizzard & Organ, 2010). To ensure enjoyment as well as engagement, the use of game elements is used, which results in an increased motivation to complete learning and game tasks (Hamari et al., 2014). Gamification seemed to have a short term influence on the level of enjoyment by means of a novelty effect (Koivisto et al., 2014). In an online idea competition, game design elements consisted of leaderboards but the game design elements were also used in the form of an opportunity for participants to share and recommend other participants’ ideas (Seaborn et al., 2015). The participants that felt a great feeling of enjoyment, reviewed the used game design elements as positive, indicating that these elements were able to complement the total experience for certain attendees (Seaborn et al., 2015).
Enjoyment plays an important role online in making customers think about coming back to the website (Chiu et al., 2009). In addition, customer loyalty is not only expressed in
19 customers coming back to a particular store, but also in customers recommending relatives and friends by means of word-of-mouth (Harwood et al., 2015). Enjoyment, in combination with trust, increases the willingness of customers to think about a repurchase (Chiu et al., 2009). Besides that, a research on customer loyalty in the mobile commerce showed that perceived enjoyment had a great effect on mobile loyalty (Cyr, Head & Ivanov, 2006). In addition, in a service context, customer loyalty depends on the level of affective commitment, which indicates the level of emotional connection with a company (Evanschitzky, Iyer, Plassmann, Niessing & Meffert, 2006). The degree to which customers are emotional
sensitive and experience, trust shows how affective committed they are, which in most cases resulted in positive emotions like enjoyment and satisfaction (Sulsky, 1999). When there is a strong affective commitment of customers to the company, these customers are valuable to the company because their purchase intentions increase and these customers keep coming back to do purchases from the company (Evanschitzky et al., 2006). While other customers, the customers that do not feel an affective commitment to the company and that do not experience many positive emotions such as enjoyment, are not an enduring source for customer loyalty (Mattila, 2006). So, when customers experience enjoyment as a result of affective commitment to the company they also ensure customer loyalty for on the long-term.
Gamification results in customer engagement emotions, such as enjoyment and satisfaction, which then leads to customer engagement outcomes, for instance loyalty as well as intrinsic and extrinsic rewards (Harwood et al., 2015). This can be seen in the mobile technology, where gamification is considerably important when organizations want to create customer loyalty, which has to be realized via an increase in the enjoyment of customers (Hofacker et al., 2016). When gamification is provided with an interesting story, challenges, constantly feedback and much interaction with the customers, they get more attracted and are likely to engage in the actions where gamification is used (Kapp, 2012). The use of game
20 design elements may first lead to affective outcomes, which can be enjoyment and satisfaction among other things. If customers experience the feelings of enjoyment, they are likely to think about doing a repurchase as well as actually returning to purchase products or use services that a company offers (Bowden, 2009). Thus, based on the findings in literature, enjoyment plays an important role in the relation between the use of game design elements and customer
loyalty, resulting in the subsequent hypothesis:
-H3: Enjoyment is mediating the relationship between gamification and customer loyalty.
Figure 1 gives an illustration of the proposed relationships between the variables.
Figure 1. Conceptual model
Methodology
Design
The research was quantitative in nature, with a survey as the research method. This research design is appropriate, because with a quantitative design, there is the ability to use less large groups of people to draw conclusions about a larger group of participants generally (Barlett, Kotrlik & Higgins, 2001). For example, if one hundred customers of AH fill in the
21 questionnaire about their enjoyment and loyalty to AH and its collective actions, it is easier to make interferences about a larger group, such as customers who do purchases at other
supermarkets, in comparison to qualitative interviews. So, that is how the hypotheses can be tested and the survey method makes it more convenient to explain the results (Gable, 1994). However, the degree of validity of the data is unsure, looking at the performance and
evaluation of an survey that is meant to be filled in online (Wright, 2005). The data is collected through an online questionnaire and an advantage of this data collection method is that online questionnaires ensure participants are motivated to reply seriously, by making the respondents aware of their desire for self-reflection by providing noteworthy, instant feedback (Gosling, Vazire, Srivastava & John, 2004). A limitation of using questionnaires could be that this data collection method is not representative of the population in general (Gosling et al., 2004). An online questionnaire is not highly reliable because it is almost impossible to check if all participants carefully read the introduction of the questionnaire with all the
requirements, before taking part in the research. Therefore consistent findings are harder to realize when online questionnaires are used to collect data (Wright, 2005). However,
replication of this research method is possible, due to the fact that researchers can use the link to see exactly what the requirements were and which questions were used (Wright, 2005). They can ask the same questions to anyone that is meeting the requirements of the research.
The conceptual model consists of four variables and each variable has a different function. Gamification is the independent variable, customer loyalty is the dependent variable and customer loyalty depends on gamification, engagement and enjoyment. Engagement and enjoyment depend on gamification, are independent of customer loyalty and are a mediator between gamification and customer loyalty.
Sample
22 were customers of AH. The link to the questionnaire was available for five days and the data were collected from 134 participants, of which 74 were men and 60 were women. All the respondents were speaking Dutch and living in The Netherlands. Some participants even shared the link with family and friends, which led to the total of 134 respondents. The age of the participants was between nineteen and 81 years old, with 44.0% younger than or equal to 30 years old and the average age of the participants was 41 (SD = 17.49). The biggest group regarding annual income was the group of participants that earned less than € 20.000 (33.1%). More than three-quarter of the respondents went at least twice a week to Albert Heijn to shop groceries. The reason why the discussed theory is appropriate for this sample is that
gamification in previously studies also has been researched using quantitative methods with, inter alia online questionnaires. This theory in combination with the research method gave a clear insight in how gamification effects customers’ engagement with Albert Heijn, how gamification influences the level of enjoyment and how gamification directly effects customer loyalty. The discussed theory showed that engagement and enjoyment could be a mediator in the relation between gamification and customer loyalty, and by using a quantitative method the results can be easily analyzed, at which the role of engagement and enjoyment as possible mediators in the relationship between gamification and customer loyalty can be researched. Concerning the way of sampling, non-probability sampling is used for this research and more specifically, convenience sampling. This sampling method is especially appropriate when respondents are hard to find (Fricker & Schonlau, 2002). However, a limitation of using convenience sampling is that the effect sizes are quite high in comparison to randomly selected samples (Amato, 2001). An advantage of this research is that the sample is fairly representative because almost all the age groups are included of the people that shop
groceries, which can be seen by the participants’ age, that lies between nineteen and 81 years old.
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Procedure
A minimum of 100 respondents was required to progress with the research on the influence of gamification on customer loyalty. The only requirements for filling in the online questionnaire were that people had to shop groceries at Albert Heijn on a rather regular basis and that they were familiar with or had heard about the collective actions of Albert Heijn. The respondents consisting of family, friends and acquaintances, were contacted through a personal message on their phone and were asked friendly to help with the research, by filling in the online questionnaire. More than 100 respondents were directly asked to fill in the questionnaire and some of them recommended others to participate in the research. The online questionnaire was made publicly available, so that everyone was able to fill in the questionnaire in any time and any place, which was meant to get a bigger sample size. To prevent that participants got harmed by giving personal information in the questionnaire, the participants did not have to fill in their names, thus the results were anonymous. On top of that, the answers the
participants provided were treated confidentially, which can also be seen in the appendix. The process regarding the data collection took about five days, which also includes the time looking for new respondents. The online questionnaire also consisted of questions that were not used in the analysis of the results, due to the fact that these questions were not necessary in answering the research question. These questions were used instead, to make the
questionnaire somewhat longer as well as a more general by asking objective questions about the participants’ behavior with regards to shopping groceries at the supermarket Albert Heijn.
Measures
The independent variable gamification was measured using only an 1 item scale. Gamification has a binary function, because either gamification is present and the participants engage in the collective actions or gamification is not present. The item that was used for the questionnaire was: to what extent did you participate in the collective actions from Albert Heijn?. The scale
24 that was used, is the Likert-scale which ranges from (1) “never” to (5) “always”. The
questionnaire was meant for people who were known with the collective actions and who participated in these actions. On top of that, the intention of the 1 item scale was also to find people that were not involved with gamification with the aim to be able to compare the situations where gamification was included and where gamification was not present. So, there were two possible outcomes for this variable: gamification or no gamification.
Customer loyalty was measured by using a 5 item scale based on three questions about the willingness to recommend, which were handled in a survey by Lee, Lee and Lee (2005).
Willingness to recommend was used as a measure for customer loyalty, because the
willingness to recommend reflects mostly the chance that a customer will come back to the store (Bowen & Chen, 2001). One question that was in the questionnaire was as follows: to
what extend would you recommend (one of) the mentioned collective actions to family or friends?. The Likert-scale ranges from (1) “not at all” to (5) “very”. The higher the score, the
more likely it is that customers keep coming back. The other two items were more directly connected to customer loyalty and these were obtained from a questionnaire by McMullan (2005). An example of one of these items was: when Albert Heijn would stop with collective
actions, you have less reason to shop groceries there. (McMullan, 2005). A high score means
that customers keep coming back at Albert Heijn.
Engagement was measured via a 3 item scale based among other things on a survey by Schaufeli, Bakker and Salanova (2006). The first item of engagement was as follows: the
collective actions strengthen the relationship between you and Albert Heijn. The Likert-scale
ranges from (1) “strongly disagree” to (5) “strongly agree”. A high score means a greater feeling of engagement between the customer and the vendor. This item was used to discover if gamification positively influenced engagement. Moreover, the respondents got a follow-up question when they filled in “neither agree nor disagree”, “agree”, or “strongly agree” at the
25 first question about engagement. The follow-up question was as follows: this strengthened
relationship ensures that you keep coming back to Albert Heijn. This question was asked to
find out if there was a positive relationship between engagement and customer loyalty. Ultimately, the third item of engagement was based on a survey by Libbey (2004). The item was used to find out if gamification had a motivating effect on engagement. Therefore the last item was as follows: to what extent are you motivated to participate in one of the collective
actions?. The Likert-scale ranges from (1) “not at all” to (5) “very”. A high score on the scale
means that customers are very curious and eager to participate in the collective actions. A 2 item scale was used to measure enjoyment, and the questions were based on a questionnaire by Libbey (2004). The first item of enjoyment was as follows: one or more
collective actions have made you enthusiastic. The Likert-scale that is used, ranges from (1)
“strongly disagree” to (5) “strongly agree”. A high score means a higher perceived enjoyment, while a low score shows a lower perceived enjoyment. Important to mention is the fact that the other item about enjoyment was not answered by every participant. First the respondents were asked if they participated in the collective actions of Albert Heijn for themselves or for others. If the respondents filled in the option including “for others”, they got a follow- up question and otherwise the respondents did not get the next question: the people for whom you
participated were enthusiastic about the mentioned collective actions. A high score means
also a higher perceived enjoyment in this case.
The two control variables that were used for this research were age and the frequency of grocery shopping. The reason why age was used as a control variable was because it was likely that there would be a difference between young adults and elderly, due to the fact that the youngest participant was aged 19 years old and the oldest person that filled in the online questionnaire was 81 years old. In addition, most young adults probably have other interests than elderly, they are likely to pay more attention to trends and participate in them, as well as
26 that there is a big difference in age, potentially leading to a generational gap between young adults and elderly. The other control variable that was used, was the frequency of grocery shopping at Albert Heijn, which was at least one time per month and that could be more than three times a week. People that only shop groceries once a month, are perhaps not aware of the special actions that are offered by the supermarket, while people that go to the
supermarket more than three times a week, are likely to find out any special actions or great discounts and make use of these actions. Therefore there could have been a big difference in knowledge about the collective actions between the participants that occasionally visited Albert Heijn and the participants that often shopped groceries at this supermarket, which is why this variable was used as a control variable.
Results
The data, with information about the means (M), standard deviations (SD) and the reliabilities of the variables are displayed in Table 1. Gender was moderately positively correlated to gamification r (134) = .321, p < .05 as well as to enjoyment r (134) = .276, p < .05. Age was slightly negatively correlated to gamification r (134) = -.212, p < .05, interestingly negatively correlated to customer loyalty r (134) = -.212, p > .05, however, age was hardly correlated to engagement and enjoyment. Annual income did not have a significant effect on one of the variables that are included in the conceptual model, but annual income was interestingly positively correlated to gamification r (134) = .162, p > .05. Then, the frequency of grocery shopping was moderately positively correlated to gamification r (134) = .227, p < .05 but was hardly correlated to customer loyalty, engagement and enjoyment. With regards to the
reliability, engagement had a reasonable good alpha after removing one item, customer loyalty had a great alpha, but enjoyment scored low on the reliability scale. To illustrate this, engagement firstly had a low reliability (=.451), but when the third item from engagement was removed, alpha increased to (=.734). The third item was as follows: to what extent are
27
you motivated to participate in one of the collective actions?. The deletion of this item
resulted in an alpha higher than .60, but below .80, which made a reasonable good alpha for engagement. While customer loyalty had a good score on the reliability scale (=.809), enjoyment was not reliable according to the low alpha (=.518). Therefore one item was removed from the enjoyment variable, which ensured that only one item remained. The deleted item was as follows: the people for whom you participated were enthusiastic about
the mentioned collective actions. So, the only item that represented the variable enjoyment
was: one or more collective actions have made you enthusiastic.
The correlations between gamification, customer loyalty, engagement and enjoyment are displayed in Table 1, which shows that the relationship between gamification and
customer loyalty was strongly positively correlated, r (134) = .434, p < .05, which was as expected. Furthermore, Table 1 shows that the relation between gamification and engagement is moderately positively correlated, r (134) = .334, p < .05, which was in line with the stated expectation. The relationship between gamification and enjoyment was also positively correlated and significant, as expected, r (134) = .525, p < .05. The relation between
engagement and customer loyalty was strong positively correlated as well, which was in line with the expectation, r (134) = .591, p < .05 and the relation was significant. Moreover, as expected, there was a positive correlation between enjoyment and customer loyalty, r (134) = .641, p < .05.
28
Table 1
Descriptives and correlations between the variables (Cronbach’s alphas on diagonal)
M SD 1 2 3 4 5 6 7 8 1.Gendera 1.450 .499 2.Age 41.690 17.490 .481** 3.Annual incomeb 2.410 1.188 .276** .719** 4.Frequency shoppingc 2.680 .978 .004 .096 .107 5.Customer loyalty 2.630 .771 .051 -.168 -.120 -.093 (.809) 6.Gamification 2.754 .929 .321** -.212* .162 .227** .434** 7.Engagement 2.541 .867 .061 .002 .014 .025 .591** .334** (.734) 8.Enjoyment 3.224 1.023 .276** .009 .042 .069 .641** .525** .532** Note: N = 134 *p<.05, **p<.01 a
1 = male, 2 = female, 3 = other. b 1 = less than € 20.000, 2 = € 20.000 - € 37.000, 3 = € 37.000 - € 68.000, 4 = more than €68.000. c 1 = once a month, 2 = once a week, 3 = two or three times a week, 4 = more than three times a week.
To test the first hypothesis, a regression of gamification on customer loyalty was done. In Table 2 as well as in Table 3, the results from this analysis are put together and these show that when gamification was present, customer loyalty increased, = .434, t = 5.541, p < .01. Furthermore, 18.9% of variation in the variable customer loyalty was directly predicted by gamification (R2 = .189). These numbers show that Hypothesis 1 is supported, which means that there was a direct and positive relationship between gamification and customer loyalty.
For Hypothesis 2, firstly, a single regression was run to test the main effect of
gamification on engagement. The results from Table 2 show that the presence of game design elements in non-game contexts leads to a stronger feeling of engagement which was also found to be significant, = .334, t = 4.078, p < .01. Moreover, 11.2% of the variation in engagement was explained by gamification (R2 = .112). So, these results show support regarding the second hypothesis, which stated that the presence of gamification is positively associated with engagement. Subsequently, to discover the relationship of engagement and customer loyalty, a regression of engagement on customer loyalty was performed, which led
29 to a significant outcome and a positive association between these variables, = .591, t = 8.417,
p < .01. The strength of the prediction is 34.9%, therefore this amount of percentage of the
variation in customer loyalty can be explained by engagement (R2 = .349). Finally, a multiple regression was done to determine if engagement played a mediating role between
gamification and customer loyalty. The outcome of the regression displayed that gamification is positively associated with engagement and that the relationship between these variables is significant, = .267, t = 3.751, p < .01. Furthermore, Table 2 shows that engagement and customer loyalty are positively associated and these are found to be significant as well, = .502, t = 7.061, p < .01. The multiple regression showed that 41.2% of the variation in customer loyalty can be predicted by the mediating role of engagement in the relationship between gamification and customer loyalty (R2 = .412). All the regressions gave a positive and significant association and therefore Hypothesis 2 is supported. Thus, engagement mediated the relationship between gamification and customer loyalty.
Table 2
Regression results for all 4 models regarding ‘engagement’
Model 1 Model 2 Model 3 Model 4
Dependent variable Customer loyalty Engagement Customer loyalty Customer loyalty
Coefficient SE Beta Coefficient SE Beta Coefficient SE Beta Coefficient SE Beta
Constant 1.638*** .189 1.682*** .222 1.295*** .167 .888*** .193
Gamification .360*** .065 .434 .312*** .077 .334 .221*** .059 .267
Engagement .525*** .062 .591 .446*** .063 .502
R2 .189 .112 .349 .412
Note: N = 134 *p<.05, **p<.01, ***p<.001
The third hypothesis was tested firstly by executing a regression of gamification on enjoyment, which showed a significant result = .525, t = 5.978, p < .01. On top of that, 46.2% of the variation in engagement was explained by gamification (R2 = .462). After that, another regression was run to test the main effect of enjoyment on customer loyalty. The results, also
30 presented in Table 3, show that there is a positive association between enjoyment and
customer loyalty as well as a significant result, = .641, t = 9.466, p < .01. The strength of the prediction is quite high: 40.4% of the variation in customer loyalty can be predicted by enjoyment (R2 = .404). Ultimately, a multiple regression was performed to find out if enjoyment has a mediating role between gamification and customer loyalty. Firstly, a regression was performed of gamification on enjoyment, which led to a positive association between these variables and a slight significant outcome, = .179, t = 2.407, p < .05.
Subsequently, a regression was ran to test the influence of enjoyment on customer loyalty. From this followed that there is a significant and a positive association between enjoyment and customer loyalty, = .553, t = 7.438, p < .01. Moreover, 43.0% of the variation in customer loyalty can be explained by the mediating role enjoyment had in the relation between
gamification and customer loyalty (R2 = .430). Because all of the results of the regression analyses were significant, enjoyment had a mediating role in the relation between
gamification and customer loyalty. So, both engagement and enjoyment mediated the relationship between gamification and customer loyalty.
Table 3
Regression results for all 4 models regarding ´enjoyment’
Model 1 Model 2 Model 3 Model 4
Dependent variable Customer loyalty Enjoyment Customer loyalty Customer loyalty
Coefficient SE Beta Coefficient SE Beta Coefficient SE Beta Coefficient SE Beta
Constant 1.638*** .189 1.824*** .247 1.086*** .171 .878*** .189 Gamification .360*** .065 .434 .508*** .085 .525 .148* .062 .179 Enjoyment .479*** .051 .641 .417*** .056 .553 R2 .189 .462 .404 .430 Note: N = 134 *p<.05, **p<.01, ***p<.001 Discussion
The results provide enough evidence that gamification as a marketing strategy ensures customer loyalty. The main reasons why gamification ensures customer loyalty is because of
31 the positive influences the game design elements have on customer engagement and
enjoyment. More specifically engagement can be achieved by motivating customers to participate in special actions that the company offers. In addition, if customers can earn a price or a reward they tend to be much eager to participate in special actions that consist of game design elements. The eagerness of customers to get a reward for their purchases from a particular brand, leads to a greater connection between the customers and that brand. With as a consequence that customers keep coming back to do the purchases and that these customers get a reward for their loyalty. Furthermore, customers can be triggered by special actions, involving game design elements in non-game contexts, to compete with their friends. To be the first one to complete some collection for example, is a goal in itself. To complete a collection, many visits to a store are required and therefore a greater connection between the customer and the brand that is owning the special actions, arises. Thereafter, customers keep coming back to the stores where they can participate in these actions. Therefore, via
engagement, the degree of customer loyalty is influenced by the use of game design elements. Enjoyment also plays a crucial role in the relation between gamification and customer loyalty. The use of game elements to get the attention of customers leads not only to customers
participating in gamification but also to an increase in satisfaction and enjoyment. On top of that, a feeling of enjoyment in combination with trust leads to an increase in repurchase intentions as well as really doing a repurchase. Thus, the use of game design elements in non-game contexts is also guided by emotions, such as satisfaction and enjoyment, which have a positive effect on customer loyalty as well.
The first hypothesis stated that there is a direct and positive relationship between gamification and customer loyalty, which is supported. That means that the use of game design elements in non-game contexts can directly lead to ensure customers to keep coming back. In other words, if no game design elements in non-game contexts are used, customers’
32 purchase intentions will not increase and customers will not keep coming back to do
purchases. Only one question was used to discover to what extent customers participated or would participate in collective actions of Albert Heijn (AH) with regards to gamification, because there needed to be situations created in where there was no involvement with
gamification as well as situations where gamification was present. By doing this, the effect of using game design elements in a non-game context could be mapped.
Hypothesis 2 stated that engagement is mediating the relationship between gamification and customer loyalty and this hypothesis is supported as well. As predicted, there is a positive relation between gamification and engagement and the relation between engagement and customer loyalty is also positive. The use of game design elements in non-game contexts led to customer engagement, which is expressed in a good connection between a company and its customers. The engagement that is experienced subsequently led to an increase in customers’ purchase intentions as well as customers actually coming back to do purchases or customers staying engaged in the special actions that include game design elements. Engagement explains the variance in customer loyalty for 34.9%, which is quite remarkable taking into that only two variables were used to predict customer loyalty. Thus, engagement is guiding the relationship between gamification and customer loyalty.
The third hypothesis suggested that enjoyment is mediating the relationship between gamification and customer loyalty, which is also supported. This means that the level of enjoyment guides the effect that gamification has on customer loyalty. In addition, such as expected is the relation between gamification and enjoyment positive as well as the relation between enjoyment and customer loyalty. The use of game design elements in non-game contexts resulted in customer enjoyment, which is expressed in customers having a positive emotion as a form of affective commitment to a company. The level of enjoyment that is experienced by the customers led to an increase in customer loyalty, thus more purchase
33 intentions and more customers that keep coming back to do purchases at a store or a website.
Besides the strengths, there are also some limitations of this research. The reliability and the validity are two concepts that can be improved. First of all, the reliability of this research is not very low, but also not outstanding. A reason for this is that with an online questionnaire that is filled in online with a reusable link, participants can send on the
questionnaire to others, who might not be instructed to carefully read the introduction before filling in the questionnaire. There are requirements that people need to meet, such as that the participants should shop groceries at Albert Heijn as well as being familiar with the collective actions that this supermarket offers. Otherwise these participants do not have enough
knowledge to fill in the questionnaire correctly, which actually makes the answers irrelevant for the research and which leads to inconsistent findings. For an improvement of the
reliability of the research, future research should pay attention to the risk of a reusable and publicly available link, so to eventually prevent irrelevant results from participants, that do not meet the requirements of taking part in the research.
In addition, the degree to which the questionnaire measures what it intends to measure is not very high. This is among other things because of the small amount of questions that are used to measure the variables. Especially, enjoyment contributes to this, by having a 2 item scale at first, but after the deletion of the last item there was one real question left to measure the degree of enjoyment of the customers regarding the collective actions of Albert Heijn. Where customer loyalty has enough items to measure the construct, enjoyment slightly comes short to be a highly reliable construct. Nevertheless, the item that is left measuring enjoyment is better than a low alpha. The reason why it is a good decision to leave out the second item of enjoyment is because with a low alpha, the degree of construct validity is doubtful (Field, 2009). With only one item measuring enjoyment, in this case, the degree of enthusiasm after engaging in the collective actions of Albert Heijn, the outcome of the variable is still in line
34 with the existing literature. To illustrate this, the previous research concerning enjoyment, uses among other things enthusiasm as a measure for enjoyment which suggests that enthusiasm is measuring enjoyment, such that the current item scale provides evidence that the questionnaire contains questions that make the research applicable and useful (Libbey, 2004). On top of that, looking at the regression analyses including enjoyment, the analyses show a positive association with gamification as well as with customer loyalty.
Furthermore, the item about to what extent participants felt motivated to engage in collective actions was deleted. The main reason for leaving this item out is due to the fact that the reliability increased to a reasonable good level (=.734) instead of a low alpha on the reliability scale (=.451). In addition, motivation is not noticeably useful as an item to measure engagement. While customer loyalty has a fairly high alpha without having to delete an item, engagement shows that having measurement scales from different researches can lead to a low reliability for a part of the questionnaire. Future research should ensure that engagement, enjoyment as well as customer loyalty consist of a scale that has at least four items, which is a good foundation for a high construct validity.
The control variables for this research are age and the frequency of shopping groceries at Albert Heijn, which warrant the causal relationships between the variables. The control variables do not show divergent results when these are included in the model, so the internal validity of this research is decent. However, another limitation of this research is, that by using online questionnaires it is harder to generalize the results to other situations and to other people. Game design elements can be in many different forms, such as leaderboards and football pictures, which makes it harder to make a general conclusion about the effect of gamification on customer loyalty and that is why the results cannot fully be generalized. Further research should therefore ensure a much bigger sample size by using existing databases, which helps in making a correct general conclusion about the effects of
35 gamification. Moreover, a limitation of using convenience sampling research is that the effect sizes are quite high in comparison to a randomly selected sample, however, the results show that there are no incorrect correlations between variables or that there are any big mean differences.
Conclusion
Gamification has an indirect effect on customer loyalty, which is guided by the level of engagement and enjoyment that customers experience because of the interaction that occurs between the customers and the company. As a result of the affective commitment customers have to the company, positive emotions arise, such as enjoyment. But gamification also directly influences customers to keep coming back due to the addictive effect the game design elements can have on customers. Moreover, if customers possess information about products that require thinking, cognition seems to stimulate customers to make a well-considered purchase and to come back for more purchases in the future. When game design elements are used with regards to these products, cognition can therefore create value for the customers as well as ensure customer loyalty. So, the use of game design elements in marketing is a useful way to attract customers and ensure loyalty, furthermore, if future research focuses more on making social contributions, an overall good image of gamification can be ensured.
36
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