Octalysis Loyalty Program Success
Get ready for a captivating case study to discover how The Octalysis Group achieved a 300% growth of the most important metrics in LATAM Airllines’ loyalty program. A successful gamified campaign, built on the principles of the world’s leading Gamification and behavioral science framework: Octalysis.
The campaign results, such as mileage accumulation and credit card acquisitions, were compared against LATAM’s historical averages, their best previous gamified campaigns, and control groups within the same audience. Therefore, the results are truly backed by control group data.
Highlights:
Miles Accumulation up 123%
LATAM Pass Credit Card acquisition up 153%
1,407% increase Mile Redemption alternatives (webstore)
up to 1,300% increase in Click To Open Rates (CTOR)
Promotional Video Engagement up 17,000%
Net Promoter Score (NPS) 85% at 5 Stars
So how did we do it?
Initial Challenge
In digital commerce, innovation is more than an option, it’s a vital necessity. Loyalty programs are no exception to this rule. In fact most loyalty and referral programs suffer from a lack of engagement and only appeal to a small group of super users. So airlines reach out to The Octalysis Group to increase engagement numbers. We have build up a track record of designing and implementing successful loyalty programs around the world.
LATAM Airlines did the same and wanted to see the effectiveness of the Octalysis Framework work its magic with a pilot project. They challenged us to design and develop a Minimum Viable Product (MVP) that would outperform any of their previous campaigns.
No small feat considering the leading status of the airline in South America and the Octalysis solution is novel to them. Our approach deviates from the LATAM’s carefully crafted brand loyalty guidelines that have been tested and implemented over many years.
The ultimate goal was simple but challenging: to increase program conversion by 20% compared to LATAM’s best previous gamified campaigns.
Proposed Solution
The need for results within a 30-day timeframe led Octalysis to suggest a more “transactional” approach (not significant in the Loyalty industry). However, the quality and precision of the gamified strategy’s design would make all the difference.
Loyalty programs often adopt this transactional approach, as it incentivizes direct exchanges between the company and the customer, generating positive financial results in the short term. However, to maximize the impact of this transactional approach, a selection of novel gamification techniques unique to Octalysis would be used to provide a different and much more motivating experience than traditional campaigns.
The creation of this MVP would not only provide valuable data on the impact of Octalysis solutions on user conversion but also give LATAM the opportunity to safely test a new communication approach, as it would be applied to a reduced user group. The expectation was that these changes would not only increase partner conversion in the loyalty program but also improve their perception of the brand.
Implementation
Analysis Phase
The Octalysis Group uses its tried and tested 5 Step Design Process to guarantee a successful design of its projects with clients. The Strategy Dashboard is the first step in this process, and knowing your target audience is key.
To tackle the 30-day challenge successfully, Octalysis conducted a thorough review of LATAM’s business metrics, along with an in-depth study of user/player motivational profiles. Analyzing “player types” is crucial in any gamification project. It provides clear guidance for choosing the most effective gamification techniques during the brainstorming process.
This analysis is primarily based on demographic, psychographic, or previously constructed user profiles. This information is then translated into concepts related to the 8 “Core Drives” or types of motivation in the Octalysis Framework, for a better understanding of the factors that motivate each type of audience the most.
For example, in the digital world, we usually refer to “users” as people who interact with a platform or service. However, when that platform is gamified, that “user” becomes a “player.” This implies a change in their behavior, expecting a more active participation similar to what they would have in a game.
Afterward, we identified the Desired Actions that LATAM needed its users to take in order to increase their business metrics. These activities include using and applying for credit cards, accumulating and redeeming miles, participating in surveys, updating personal data, among others.
Ideation Phase
Next, we held brainstorming sessions with LATAM’s team to generate ideas on how to improve the interaction and conversion of program partners (based on the discoveries from the analysis phase). During these sessions, hundreds of ideas were evaluated based on their potential to motivate users and their ease of implementation.
The resulting techniques led to an extrinsic motivation strategy and “Black Hat” tactics. These techniques were perfectly suited for situations where individuals needed to be attracted to a new experience and create a sense of urgency to perform the Desired Actions.
Furthermore, Octalysis’ proposal included a review of how LATAM communicated with its partners, encompassing both the visual aspect and the tone of their communication. The idea was to experiment with a fresher, more interactive approach that would resonate with LATAM’s brand identity and encourage partners to engage more with the program.
Design Phase
Among the key innovations implemented were various gamification techniques such as Social Norming, Time Countdowns, Blank Fills, Rolling Rewards, Fixed-action Rewards, and a narrative based on a treasure hunt in Latin American jungles. The narrative played a crucial role in immersing the user in the experience.
Throughout their user journey, users embarked on an “adventure” where they could search for hidden coins and complete missions to earn rewards. The experience was divided into two main sections: an “educational” section aimed at helping users better understand the LATAM Pass loyalty program and a “missions” section that provided personalized objectives for each user. These missions aligned with the Desired Actions identified in the analysis phase, and their completion would increase LATAM’s business metrics.
The implementation of these gamified elements was done gradually and systematically, prioritizing those that offered the greatest impact with the least implementation effort. The result was a unique user experience that kept users motivated and active on the new “Treasure of Dreams” platform.
Some of the Techniques Used
This project implemented a series of gamification techniques derived from the Octalysis Framework. For example, the concept of Scarcity & Impatience (Core Drive 6) was used to drive participation by incorporating elements such as a limited-time countdown to collect hidden coins.
Techniques of Unpredictability & Curiosity (Core Drive 7) were also employed, such as incorporating a gamified narrative and unexpected rewards, to foster exploration and keep users engaged in the content.
\In addition, techniques of Social Influence & Relationship (Core Drive 5) were implemented, such as constantly showcasing the actions of other users, leveraging the cognitive bias of social conformity to encourage users to unconsciously follow the example of others.
Although the approach was transactional, the use of Octalysis gamification techniques allowed for a richer and more engaging experience, motivating users to actively participate and perform the Desired Actions that would benefit LATAM.
The key to creating a truly effective gamification design lies in the precise synchronization between business metrics, user motivation, and the gaming techniques used.
Once the design phase was completed, we developed and launched the platform for the gamified experience, reaching over 160,000 users in this first release. Releases in more countries like Brazil and other countries were scheduled thereafter.
Results
The redesign and gamification of LATAM Airlines Loyalty Program, LATAM Pass, had a massive impact on both user perception and the company’s business metrics.
Here are some of the key results achieved:
mileage accumulation up 123%
LATAM Pass Credit Card acquisition up 153%
1,407% increase mileage redemption alternatives (webstore)
up to 1,300% increase in Click To Open Rates (CTOR)
Promotional Video Engagement up 17,000%
Net Promoter Score (NPS) 85% at 5 Stars
Let’s deep dive!
Increase in LATAM’s KPIs
Visitor KPIs
Let’s start with one of the most crucial key performance indicators (KPIs) of the gamified campaign, closely tied to the resounding success of the initiative. The experience had over 160,000 unique visits, an average session duration of around 3 minutes and 30 seconds, and over 8 million interactions.
During the month-long “Treasure of Dreams” campaign, the target group astonishingly doubled their mileage accumulation, marking an incredible approximate increase of 123% compared to their historical average.
We experienced a 153% increase in the number of people who acquired LATAM Pass credit cards through our gamified campaign compared to the control group.
Finally, we observed an impressive 1,407% increase in the number of people who chose to engage with LATAM Pass’s mileage redemption alternatives (RewardsWeb).
Increase in Open Rate (OR) and Click-Through Rate (CTOR)
The redesign also resulted in significantly higher open and click-through rates compared to more traditional campaigns. The average open rate (OR) exceeded 60%. The click-to-open rate (CTOR) saw, in some cases, an increase of over 280% compared to similar campaigns previously conducted by LATAM, and over 1,300% compared to routine promotional and general update emails (without gamified elements). These numbers demonstrate a very significant increase in user interest in Octalysis designed gamified content.
Engagement with Promotional Video
The promotional video for the gamified experience of LATAM Pass achieved a 2.5% engagement rate. Compared to the highest engagement video on LATAM Airlines’ YouTube account, which has a 0.014% engagement rate, this represents an increase of over 17,000%. The narrative and visual presentation of LATAM Pass’s new design were particularly effective in capturing user interest.
High Net Promoter Score (NPS)
LATAM Pass’s new design received an exceptionally high Net Promoter Score (NPS). Over 85% of ratings were 5 stars, indicating a high level of user satisfaction. Additionally, the platform received over 4,000 positive comments responding to the question, “What did you like most about the experience?”
These positive results further validate that gamification design by The Octalysis Group has a real and significant impact on user engagement and, most importantly, on business metrics.
Lessons and Next Steps
This project provided several valuable insights and set the path for future improvements to LATAM Pass. Here are the main lessons learned and next steps:
Lesson #1: Effectiveness of Octalysis Gamification
This project served as a successful proof of concept for applying the Octalysis gamification approach to a large-scale loyalty program. The campaign results confirmed that people respond very well to gamified mechanics and that even small modifications (when properly designed) to traditional incentive structures can have a significant impact on user engagement and business metrics.
Lesson #2: Importance of Personalization
One of the keys to the project’s success was personalizing the experience for different types of users based on their motivational profiles represented by the 8 Core Drives of the Octalysis Framework. By tailoring rewards and gamified mechanics to users’ specific interests and behaviors, we were able to maximize their participation and satisfaction.
Lesson #3: The Impact of Well-Designed Gamification
Gamification is not just about randomly adding mechanics to an experience and expecting good results. Like in other disciplines, it is crucial to identify the elements that best address a specific problem, make them work in synergy, and design them to achieve their maximum motivational potential for users.
Next Steps: Inactive Users
Given the success of this MVP, the next step will be to focus on LATAM Pass’s inactive users. These users have a very different motivational profile and will require a different approach to reactivate them and keep them engaged in the experience.
Our goal is to completely redesign the LATAM Pass loyalty experience to incorporate Octalysis gamification principles at every stage of the user journey.
If you need assistance with a project or want to share your thoughts, reach out to us at joris@octalysisgroup.com.
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