Commentary

Is 'World of Warcraft' A Loyalty Program?

What's the difference between "World of Warcraft" and a loyalty program?  Surprisingly little.  Blizzard (now Activision Blizzard) has made an empire out of games that don't end.  From "Diablo" to "World of Warcraft," these are bestselling hits predicated on a simple formula: Make your customer an addict.

 

There's a ton of things to learn from this company, including novel tactics of CRM - but for the purposes of this post, we'll limit ourselves to a look at how a store loyalty program would look if designed by Blizzard.

 Diminishing returns:  All Blizzard games start off with tremendous quantity of rewards per investment at the outset, but taper off into hours of work for a marginal but significant qualitative gain.  So our loyalty program will be layered with bronze, silver, and gold points.  At the outset, bronze points accrue quickly and can be redeemed often for small perks.  Eventually members can purchase a silver membership using their bronze points, at which point they accrue silver points instead, albeit at a slower rate.  These can buy more rewarding perks.  Gold membership follows in the same manner as silver.

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 Social Component:  Blizzard games have both cooperative and competitive social frameworks.  To follow suit, our loyalty program will allow multiple customers to create an alliance with up to five friends, each member of which gets fractions of a point for every point another member accrues.  For each store location, the top three alliances in points earned for the previous month get access to an exclusive perk for each level of membership (bronze/silver/gold).

 Quests: In most Blizzard games, "grinding" (killing monsters over and over again for points) is the primary way to level up.  But they add quests as a way to spice things up.  As such, our loyalty program will use the weekly newsletter to issue optional "quests" for points.  Clearing out last season's stock?  "Come into the season clearance sale this week and pick up five items or more for an extra 20 points!"  Having a vendor in-store for a demonstration or taste test?  That's now a "quest." 

Random loot:  The key to the most addictive Blizzard games is the randomness of  "epic loot."  Any behavioral psychologist can confirm that random rewards are more effective at driving behavior than constant rewards.  Accommodating this, our loyalty program will select certain SKUs each week to have a marginal chance of tripling the shopping cart's point value at checkout.  If a customer gets this bonus, he or she will be notified and congratulated by the sales clerk and told which item triggered it.  For avid participants, this will allow for "strategy" around the weekly SKU bonuses (and allow us to push excess inventory).

 Did I miss anything?  Think of something else that could improve this imaginary loyalty program?  Post your idea in the comments.

8 comments about "Is 'World of Warcraft' A Loyalty Program?".
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  1. Thom Kennon from Free Radicals, October 16, 2009 at 3:10 p.m.

    I love this. Need to think about these things for ANY CRM program.

  2. Kenneth Gold from Consultant, October 16, 2009 at 3:35 p.m.

    I often wonder why I am subscribed to Gaming Insider as clearly most of the columns show a lack of any knowledge of the gaming industry or the games they write about.

    Josh appears to know very little about World of Warcraft and just thinks the title will get higher click-through. And I have to admit it worked on me. But that is not a good thing.

    What Josh has described really is more of the Mafia Wars model of CRM and not WoW. There are significant differences that would be used for very different business models with very different goals.

    World of Warcraft just does not work in the way Josh describes it in regards to loyalty. And why this posting would switch from WoW focused to Blizzard Games focused is beyond me, since none of the other Blizzard games have incremental revenue models.

    Just bad blogging/posting/whateverthisis-ing

  3. Josh Lovison from Josh Lovison Consulting, October 16, 2009 at 4:04 p.m.

    Actually Kenneth, my Gaming Insiders are written keeping in mind an audience who might not be as familiar with Azeroth as you might be personally.

    And if you note, the article specifically calls out a focus on loyalty, and does not promise a tactical investigation of Blizzard's CRM for WoW (which is an interesting topic, but not one I'm sure appropriate for this broad an audience).

    The core question was "Is the underlying format of WoW that of a successful loyalty program?"

    You're correct that the basic elements exist in Mafia Wars as well. But the core elements are true to both. WoW just has better graphics/actual gameplay and a more time intensive progression table, which (a) doesn't translate well to casual audiences, hence Mafia Wars, and (b) won't work as effectively for our made-up loyalty program. But adopting the core concepts worked great for Mafia Wars, and worked for this exercise.

    And there's a level 80 Enhancement Shaman (second spec Resto) decked out in Tier 7.5 that disagrees with your "knows very little" comment. (Albeit, he's now resting in "non-active" account status....but still...)

  4. Norman Au from ValueClick, October 16, 2009 at 5:17 p.m.

    These 4 points are the framework on every MMORPG i've ever played or heard about...

    I would love to read about "Are MMORPGs a Loyalty Program? And how WoW won market share". Now that would make for a nice story, probably not Mediapost's bread and butter though.

  5. Kate Hill from Portland State University, October 16, 2009 at 9:08 p.m.

    It depends on the value of your "points" though. WoW's always had addictive incentives for two people: 1) the "gotta catch 'em all" people, who just want to collect everything, and 2) the "my pixels are better than yours" people. A loyalty program might be able to rope in the collectors, but that's about it. At end-game people play hours on end to get the greatest gear/mounts/guild membership for more of a prestige/power thing. Other end-game players have to keep up with the new gear just to keep playing the same content without being mocked (t7.5 psh, Naxx is old news). How would this peer pressure/social power translate into a real loyalty program? I've never been in or seen a loyalty program where anyone else in the store cares about whether or not I'm a gold member with loyalty points.

  6. Ken San nicolas from KUAM, October 18, 2009 at 7:13 p.m.

    Lvl 80 enhancement shaman. That is all I need to read to know how little you know about WoW, Josh. Just kidding! I think this is a good read, and definitely brings up good points. Alas, maybe some of the points aren't exact but I commend the attempt. Good points.

  7. Josh Lovison from Josh Lovison Consulting, October 19, 2009 at 1:57 p.m.

    Kate,

    As for how a program like this could work for the competitive set - look at what Foursquare is doing with it's mayorship programs.

    Ken,

    Haha...I used to be in the top 3 DPS on any melee mob raid boss for our guild. Enhancement shamans are great if you know how to gear them. There's some very comprehensive info on Elitist Jerks if you were interested.

  8. John Galto from John Galto, October 19, 2009 at 5:58 p.m.

    WOW is cheaper than a shrink >>>now if they gave you loyalty points to seeing a real shrink(to see how you are doing) that would be something!

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