How-to: Build a High-Performing Loyalty Program in 2026 with Mobile Gaming and AI

In the US, the average consumer is part of 16.6 loyalty programs but actively only participates in less than half of these. If there’s something we can take from this data, it’s that loyalty apps must be woke to new strategies to combat poor engagement, low retention, and disappointing DAU metrics.

Fighting user churn means giving your users what they want – and how they want it. Consumers will only stay loyal to a brand if its app brings them the experience and value they’re looking for.

The challenge is to create frequent, valuable interactions that don’t always require a purchase. This is where mobile gaming (one of the world’s most popular, time-consuming pastimes of around 3 billion users) becomes the crucial link. By integrating rewarded gaming experiences, brands can shift from purely transactional loyalty to engagement loyalty, giving customers a fun, zero-cost way to earn points and strengthening their relationship with the app every single day.

Start by Setting KPI Goals for Your Loyalty Program

Your rewards program is a tool, and you need to track its effectiveness by setting measurable goals. Think less “improve loyalty” and more “reduce the churn rate within 60 days by 10%” or “increase customer lifetime value by 15%”.

1. Customer Lifetime Value (CLV) Lift:

• Strategic Goal: Estimate the additional revenue that program members generate compared to regular customers.
• Benchmark: Increase CLV for program members by 15% or more.

2. Churn Rate:

• Strategic Goal: Reduce the number of customers who stop engaging with the brand (or program).
• Benchmark: Reduce 60-day churn of new users by 10%.

3. Redemption Rate:

• Strategic Goal: Understand how attractive the provided rewards are. Low redemption means the rewards don’t provide enough value.
• Benchmark: The target is often 15–20% of accrued points.

4. Participation Rate:

Benchmark: Participation rate of 50% or more shows high engagement.Are Loyalty Programs Really Leveraging Loyalty?

Strategic Goal: Percentage of active program members out of all registered members.

Avoid What Makes Other Loyalty Programs Fail

With today’s consumers expecting more and more in return for their loyalty, Gartner has identified which rewards consumers want most from their loyalty programs:

• redeemable points
• cash back
• discounts
• exclusive offers
• personalized offers
• recognition

What’s stopping loyalty point collectors from converting into more active users? Surveys have identified the main pain points leading to user churn in loyalty programs:

• Rewards take too long to earn or redeem
• Rewards are irrelevant or unattractive
• Users are bombarded with rewards and messages
• Rewards are inconsistent and not frequent enough

This is why more loyalty apps and programs are now leveraging the indisputable power of mobile games as a key component in their user engagement loop.

Why Is Mobile Gaming Key to Solving Churn? Because Everybody Plays

It’s time for loyalty programs to tap into the reach and revenue potential of mobile games. Especially, if they’re trying to attract a younger user base and increase engagement with their app and brand. Why? 

Not only will the global mobile gamer penetration rate climb over the next four years to around 30 percent, the mobile gaming segment is forecast to generate at least 352 billion US dollars by 2027. With 60 percent of global mobile app revenue generated from mobile games, loyalty programs can leverage games not only as a compelling engine for user growth and high engagement but also for monetization.

Integrating mobile games into the rewards process for your loyalty program is not changing the way your users behave, it’s leveraging the user behavior that we’ve seen and will continue to see. We’re referring here to more than two billion mobile gamers and the 176 billion mobile games that will be installed around the world by 2027.

There’s More: Gaming Loyalty Rewards Fund Themselves

Instead of funding loyalty points with your revenue (which costs you margin), this model funds them with ad revenue from mobile game publishers.

• Zero-Liability Points: Because the points are paid for by the game advertiser, the value of the rewards is externally funded. Your loyalty program carries zero financial liability for the points issued through the Arcade. This is a straight way to margin protection and growth.How Can Your Program Reach Next-Level Loyalty?

• The Value Swap: Your customer’s time and attention (playing a game) are traded for loyalty points, rather than their money (making a purchase). This is naturally met with higher participation rates from users.

Hyper-Personalization with Arcade-native AI.

With Arcade, AI is not just for addressing customers by name; think bigger. 

The system is engineered using machine learning (ML) and first-party data to achieve a level of personalization that directly solves your biggest pain points: user dissatisfaction and eventual churn.

The Arcade is not a static list of games; it is a dynamic, customized marketplace for every single user.

• Matching Interest to Offers: Instead of showing random ads, the platform uses proprietary ML algorithms to analyze user characteristics (such as age, gender, device type, and mobile engagement) to predict which games they are most likely to install, enjoy, and play for an extended period.
• The Engagement Loop: By presenting highly relevant games picked from the world’s most popular game studios, the system ensures that when a customer enters the Arcade, they are satisfied with the selection and genuinely want to engage and earn points. This voluntary, relevant engagement is why this solution boasts high engagement rates, leading to predictable activity and revenue.

How to Integrate Engagement-Based Rewards into Your Rewards Program

How do you integrate games into your mobile loyalty program?

• First, integrate adjoe’s lightweight SDK (Software Development Kit), which is the code foundation, and securely map it to your customer’s unique User ID. This is crucial for accurate tracking and ensuring secure personalization of offers. 
• Place a button in your app to launch the dynamic game catalog. This simple action drives the core business benefit of high daily engagement, giving customers a reason to open your app and lifting your Daily Active Users (DAU). 
• Ensure safety by establishing Server-Side Security (S2S). This endpoint receives a verified notification directly from the partner’s server, ensuring points are only released to the user after the reward is legitimately earned.

How do you integrate games into your mobile loyalty program? Rewarded ad units such as adjoe Arcade provide loyalty apps with a one-stop connection to the mobile gaming world and prioritize personalization, ease of use, and continuous rewards.

As a result, the user flow is quite simple:

1. OFFER TO EARN: Users are notified in your loyalty app that they can earn points with your brand by playing top mobile gaming titles.
2. PERSONALIZED OFFERS: Once opting in to earn rewards, users are presented with a list of the most relevant gaming offers from the top titles around the world.
3. PLAY FOR POINTS: Users select the game, start playing, and earn points based on their session time – all they have to do is play and accumulate game time. As soon as the user reaches a certain points value, these points land on their account in your loyalty app.
4. BRING IT BACK TO YOUR BRAND: The user receives a notification of their rewards with your logo, ensuring they stay connected and in touch with your brand – and return to your app.
5. “PAY” FOR GOODS. Users claim these points to “pay” for a service or receive a discount or cash back in your app. Perfect for programs seeing a downturn in points for purchases.

The benefits are clear on both the publisher and end consumer’s side. Integrating games into your mobile loyalty program removes users‘ common pain points and instead gives them the rewards they want by playing the best-ranking mobile games. And this works for any mobile loyalty program. Whether it’s for buying groceries, spending money on a favorite brand, or paying utility bills.

The Result: A New Engagement Loop

This integration shifts your loyalty program from a sporadic transaction to a daily engagement tool:

• Continuous Earning without Spending: Customers can earn points every day without having to buy anything, driving them to open your app more often.
• KPI Impact: This constant activity directly leads to a higher Customer Lifetime Value (CLTV) and a noticeable lift in app open rates and retention (as seen in case studies like Fetch Rewards or DeutschlandCard GmbH).

“From a strategic perspective, the decision to add mobile games to our loyalty app proved to be a powerful move. It strengthened our brand loyalty and gave us another way to better connect with our customers where they are, on their mobile phones. Our partnership with adjoe gave us an edge in delivering new and relevant incentives to our users in a competitive market.”

Julian Wicht
Vice President of Marketing and e-Commerce at DeutschlandCard Gmbh

Finally, Measure Success

Some call this “app gamification.” We are harnessing the undeniable reach, revenue, and engagement potential of mobile games. Now is the time to seize this opportunity.

The success of the KFC Rewards Arcade (UK/Ireland) demonstrated the power of purely gamified loyalty, achieving a 53% increase in app downloads and a 40% reward redemption rate within just a few months. Gamification mechanisms have a direct impact on key KPIs:

• LTV: A higher interaction frequency, even if not purchase-related, inevitably increases long-term customer value.
• DAU/MAU: Games encourage daily returns to the app, even without requiring a purchase.
• Redemption rate: When points are collected through short gaming sessions, the redemption rate increases, indicating high engagement.

Mobile Gaming and Loyalty Is the Synergy That Will Stick

Brands that survive are brands that react quickly to the needs of their ever-evolving consumers’. In the app economy, these are the brands that search for solutions to fight churn and retain their users. 

Some might call it “app gamification;” we call it tapping into the indisputable reach, revenue, and engagement potential that is unique to mobile gaming. The number of active mobile gamers worldwide will rise to over 2.3 billion by 2027. The time is now to tap into that opportunity.