Gamification: What Is It and How Can It Help My Business?

What is Gamification?
“Gamification”—the application of gaming mechanics to non-gaming applications—is an increasingly popular buzzword among interactive marketers. In fact, Gartner, Inc. predicts that more than 70% of Global 2000 organizations will have at least one gamified application by 2014.

By that time, they predict that having a gamified marketing service or customer retention program will be as important as having a marketing presence on Facebook. M2 Research claims that corporations spent over $100 million on gamification processes in 2010, and that number is expected to grow to as much as $2.8 billion by 2016.

Even for those who have never picked up a video game controller, it’s hard not to notice that the world around us is becoming increasingly gamified. Happy hours, frequent flyer miles, credit card rewards, and grocery/department store loyalty programs are all games at their most basic level. Such programs simply encourage and reward brand interaction through the use of milestones and incentives.

What are the Benefits?
Games themselves are inherently addictive because they appeal to some of our most basic human desires, namely competition, power, status, achievement, and self-expression. In addition, gaming principles tend to emphasize accelerated feedback cycles and short-term, achievable goals, which are effective in increasing and maintaining engagement. While the “real world” tends to be rather open-ended, games are effective because they establish simple goals and rules, where achievement can be quantified on something as simple as a progress bar.

Gamification translates remarkably well to the digital space, where most incentives need not even be tangible. Leaderboards, achievement levels, badges, and virtual currency come at almost no added per-unit cost to the business, but can be a big motivator to users. As a result, firms would be wise to consider using gamification concepts to help them deliver rich, memorable experiences to their customers.

What are the Risks?
However, gamification offers some significant risks. A firm needs to thoroughly understand what motivates its customers, or it runs the risk of rewarding the ineffective customers and punishing the valuable customers. If the rewards promised are excessive, the business will end up raising customer expectations and making promises that it can’t fulfill.

Gamification should only supplement an existing intelligence-driven strategy—otherwise, it will just add an extra layer of complexity to an already broken system.

Keys to a Successful Game

  • Figure out what behavior you want to encourage. Since the point of gamification is to award specific actions, take a look at your organization’s business goals and figure out which related user tasks you want to focus on.
  • Be devoted to the maintenance process. In order for the “game” to work, the process needs to be refreshed from time to time. Add new challenges and achievements to keep users engaged, taking into account the feedback you’re getting from analytics.
  • Focus on the perceived value being delivered. If the user doesn’t believe they’re actually achieving anything by playing the game, they won’t play it. Thus, even for virtual rewards, consider whether the user’s perceived value earned is greater than the work they are putting in. On the flip side, if you promise your users too much, the gamification process either won’t be worth the effort or may yield negative value.
  • Capture customer intelligence data. Aside from increased user engagement, one of the most important things about gamification is that you can learn more about your customers and their behavior. Not only can this information be used to improve the gamification process itself, but it can also drive process improvement in other facets of your business as well.

About Robert Ward

Technical and Business Associate, Acquity Group

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