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American Express credit cardGot points? Starting today, you can redeem them for virtual items like cows in FarmVille or guns in Mafia Wars. In a first-of-its kind deal, American Express has teamed with game-maker Zynga to make its credit card rewards redeemable for virtual goods.  

It’s the latest example of gamification – or the introduction of game elements into non-game activities. There are reasons this commerce and gaming partnership works for AmEx and Zynga, but the deal could have implications for other companies’ reward programs as well.

Zynga’s player demographics gel with the American Express cardholder base

Per Jonathan Flesher, Zynga’s GM of business development:

American Express and Zynga are logical partners for demographic reasons. A lot of Zynga’s players are older women and mothers. Comedian/talk show host Ellen Degeneres is American Express’s leading spokeswoman in commercials, and AmEx’s customers are also mostly women. AmEx cards are also a very common means for paying for virtual goods in Zynga games.


Cardholders can already redeem points for other intangible objects

American Express cardholders are used to redeeming points (which themselves are virtual) for other intangible rewards like airline miles, electronic gift certificates, and even “experiences” like getting premium seats at sports events that American Express books for them.

There’s no money exchanging hands when cardholders redeem points, and often no item they receive in the mail. So getting a large number of users to try this new virtual reward shouldn’t be that difficult – especially for cardholders already familiar with Zynga games.

The deal raises the perceived value of Zynga’s virtual currency

For students of consumer behavior, the implications of the deal are mindblowing: It’s the ultimate union of two virtual currencies.

I’d go a bit farther than Dean Takahashi to argue that by linking American Express points to Zynga, the two companies are elevating the perceived value of Zynga's virtual currency, in particular. 

Zynga already sells pre-paid cards in US stores like 7-Eleven; consumers can use them to buy virtual goods in its games. Adding American Express to the mix gives Zynga a higher level of credibility with shoppers – considering that the American Express brand is prestigious and known for delivering high-quality experiences. Long-term, this deal makes Zynga's currency more valuable to the public as a whole, not just American Express cardholders.

The deal is definitely a win-win for Zynga and American Express, but the news has value for smaller companies as well. For example, if a company doesn't yet have a rewards program, or can't figure out how exactly to engage loyal consumers, creating one that utilizes some form of virtual reward - be it points redeemable for discounts, upgrades or even invites to special events - could be a good way to get started.

Tameka Kee

Published 30 November, 2010 by Tameka Kee

Tameka Kee has been covering digital media with a focus on online advertising, social media and gaming since 2007. Find her at tamekakee.com or follow her on Twitter

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Comments (2)

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Tim

I can't believe people would be willing to sacrifice their earned points for virtual rewards. Why do some people get sucked in.

about 6 years ago

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PK

One crucial additional factor - American Express Cardmembers (NB AmEx HATE the term cardholders!) have to PAY to belong to their reward points scheme. So there is already a tangible cost to even earning the points!

about 6 years ago

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