STCO 426 Blog Post #6

In chapter 8 of Loyalty 3.0: How Big Data and Gamification Are Revolutionizing Customer and Employee Engagement, Paharia (2013) gives four steps in order to make and use a Loyalty 3.0 program which are “plan, design, build, and optimize” (p. 190). Chapter 8 covered the first step to making and using a Loyalty 3.0 program in your organization (Paharia). This is “the planning step” (p. 190). Paharia lists eight steps inside of this one step. It was a very straightforward chapter to read as it was a step-by-step guide.

Paharia’s (2013) first three steps involve things you must figure out. The first step is figuring out the main issue or issues related to the business that you desire to solve (Paharia). This is currently “what’s most important to your business” (p. 192). The second step is figuring out your target audience which is based on what the issue is that you are trying to fix (Paharia). After figuring out the audience, it is good to come up with personas to help imagine being in someone’s place (Paharia). This excited me because I have always had a great imagination. I love that it can be utilized in the workplace in this way. This caught my attention because I love imagining. I found a source that did research with experts on personas relating to design and found, “Instead of talking about general ‘consumers’, personas bring the target consumers to life and help to integrate their needs and goals as a central driver of design processes” (Miaskiewicz & Kozar, 2011, pp. 426–427). It is cool to see this helps in a specific setting. The third step is figuring out what actions you want the audience to take (Paharia, 2013). These actions must be able to be measured (Paharia).

The fourth step is choosing your key performance indicators (Paharia, 2013). These are how you will measure if the Loyalty 3.0 program is creating the changes you want (Paharia). If you do not measure, you do not know how the program is doing. The fifth step is coming up with a mission statement which explains your goals (Paharia). This statement gives a clear direction to go in (Paharia). An example Paharia gave illustrates what this looks like, “The Loyalty 3.0 program on our website will engage our customers, promote loyalty, and increase our customer retention rate by 36 percent” (p. 195). Paharia’s sixth step is to “understand the constraints you’re working within” (p. 198). This is an examination of the practicality of everything which affects choices you make (Paharia).

The seventh step is to figure out the return on investment which is valuable to the business (Paharia). The return on investment looks at what it costs versus what you earn in return (Paharia). This can include something of value that is not in dollars (Paharia). Paharia writes that a positive return on investment “is necessary not only to secure any organizational buy-in and investment but also to make sure your Loyalty 3.0 strategies and tactics align with your business objectives” (p. 200). It all comes down to the return on investment (Paharia).

Paharia’s (2013) eighth and final step is to pitch the plan to the internal stakeholders in your organization. Paharia writes, “The end goal is to get buy-in and investment from senior management and all stakeholders” (p. 204). Paharia recommends incorporating stories into the pitch because people learn more effectively with stories. In conclusion, I learned much from reading this chapter.


Miaskiewicz, T. & Kozar, K. A. (2011). Personas and user-centered design: How can personas benefit product design processes? Design Studies, 32(5), 417–430,

Paharia, R. (2013). Loyalty 3.0: How big data and gamification are revolutionizing customer and employee engagement. McGraw-Hill.



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