Businesses, seeking novel ways to engage customers online, are turning to classic video game tactics such as awarding virtual "badges," points and trophies to make their websites stickier and boost sales.

Dubbed gamification, the practice involves using game mechanics to get people to spend more time on certain products, be it a website or a piece of software. Driven by the surprise popularity of social games on Facebook and applications such as FourSquare, some businesses are experimenting with gamification to capture the attention of consumers.

The latest wave started with virtual badges earned for checking in at various locations. It continued with applications on Facebook that reward you for sharing information about brands with your friends….

"I think 2011 very much will be the year of gamification," said Gabe Zichermann, author of "Game-Based Marketing," using the somewhat clunky moniker that has become an umbrella term for the new incentive programs.

An emerging concept called gamification may just be the jolt the loyalty space needs to shake off the cobwebs and become vital again.

Gamification takes lessons from the gaming community and applies them to loyalty programs.