TikTok is poised to launch a new rewards app in Spain, France, Germany, and other European countries during the second quarter of 2024. This initiative will offer monetary incentives for activities like watching videos and referring new users. Participants will have the opportunity to earn rewards like gift cards or digital tips for their favorite creators. Despite boasting over 1 billion active users globally, TikTok’s installation rate on Android devices in Europe remains at 13%, lagging significantly behind Instagram’s 37% and Facebook’s 59%.
This launch follows a successful initial rollout in Korea and Japan in 2023, notably boosting Japan’s user count by over 2.5 million. Currently known as TikTok Lite or internally as Coin App, the app is expected to undergo a renaming process. Similarly, Sling TV recently expanded its “Watch & Win” Rewards program, now including $25,000 in new prizes, with a grand prize of $10,000, as announced by Gary Schanman, group president of DISH Video Services. This initiative is designed to make TV viewing entertaining and rewarding, enhancing subscriber satisfaction and retention.
In the e-commerce sector, Temu has revolutionized online shopping by integrating entertainment and gamification. This approach encourages frequent visits and enhances user engagement through popular in-app games like fruit-growing games and social sharing incentives.
The Take
TikTok’s introduction of a rewards app reflects successful engagement strategies employed by platforms like Sling TV and Temu. According to Earnest’s credit card data, approximately 18% of US households have purchased from Temu since its launch, with over 28% of these customers returning 16 months later. This retention rate is nearly double that of Walmart and Target and about half that of Amazon, highlighting the significant impact of Temu on customer engagement and loyalty—a model TikTok seeks to emulate.
Engagement through Gamification
The app incorporates various gamification principles that significantly boost user engagement and loyalty:
- Intrinsic Motivation: Engages users by tapping into their desire to achieve goals and progress, fostering a sense of accomplishment.
- Sense of Progression: The rewards system clearly details user progression, offering continuous satisfaction and motivation.
- Social Interaction: Features like leaderboards and challenges enhance social interaction, fostering a competitive and collaborative environment.
- Rewards and Incentives: Tangible rewards for engagement activities reinforce desired behaviors and encourage ongoing participation.
- Learning and Skill Development: Integrates educational content or challenges that make learning new skills engaging and fun.
- Fostering a Sense of Community: Shared experiences and group activities build a strong, engaged community.
- Dopamine and Reward Pathways: Strategic design elements in the app trigger dopamine releases, enhancing user enjoyment.
With streaming video service subscriber churn approaching 50% and key measurements of customer satisfaction and loyalty falling below pandemic highs, as reported by Parks Associates, the need for streaming services to become integral, habitual parts of our lives is more pressing than ever. Content alone is insufficient to maintain user interest. TikTok and Sling TV are paving the way by creating engaging ecosystems that reward users and promote consistent interaction. Other services need to follow this lead, employing innovative strategies to ensure their services are not merely consumed but integrated into their viewers’ daily lives.