We look at the rise of gamification techniques in marketing and customer loyalty and provide examples of how organisations are using the methodology to find new levels of engagement with consumers and employees
Gamification is winning over the corporate sector as a toolkit for motivating the next generation of consumers and users. But it’s the potential of gamification and big data together that is getting industry pundits increasingly excited.
Gamification’s ascent from hype to mainstream adoption is not surprising. With the push towards real-time marketing, and the need for more interactive and innovative ways of engaging customers, gamification techniques offer an engaging answer by tapping into a user’s innate human traits and driving their behaviour.
And since its emergence a few years ago as a methodology, gamification is rapidly gaining new uses.
A survey released in August by Monash University’s Australian Centre for Retail Studies (ACRS), found national retailers are incorporating gamification and smartphone applications to their loyalty programs to make them more appealing to an increasingly savvy and fickle consumer with multiple digital and offline channels at their disposal. The survey was undertaken in May and based on responses from 1000 Australian consumers.
Of those surveyed, 53 per cent reported unlocking achievements and badges based on the frequency of their interactions with a retailer to be appealing, while the ability to compare their points balance with others was also attractive to 41 per cent.
“Not only does gamification drive customer loyalty via such brand outcomes, it can also encourage, and more importantly measure established consumer behaviours,” lead researcher Dr Sean Sands, commented. “Gamification is still an emerging area of brand interaction, however, Australian consumers are open to interacting with brands in this manner.”
What’s also increasingly becoming apparent is that gamification offers a way of deriving further end-user insights for long-term benefit. In a recent report exploring gamification, analyst group, Ovum, recommended enterprises and public sector agencies begin exploring gamification for both customer or employee facing uses, claiming it can enhance customer engagement and drive productivity levels.
But Ovum software and IT solutions analyst, Adam Holtby, suggested gamification could offer even more.
“While much of the early coverage on gamification has focused on guiding behaviour and building engagement, increasingly organisations can use the data generated by gamified systems to gain insights into the skills and reputations of both their employees and customers,” he said.
How gamification works
The mechanics behind gamification were initially used to motivate players within video games, relying on a combination of tasks, rewards and recognition techniques. Outside of that field, gamification methodology has become a way of motivating a set of behaviours across consumers, customers or employees.
Rajat Paharia has been pioneering gamification applications in the corporate sector for several years through his company, Bunchball. He has refined a list of 10 gamification mechanism principles, and also works with a range of high-profile brands on how to employ these to drive particular business needs.
Paharia’s 10 key gamification mechanisms
“The world of video games for the last 40 years has been a very data rich environment. Designers have every single piece of data on how players participating in these games, and they’ve been refining the techniques for using that data to motivate players and their performance,” he explained. “They can be used to drive really meaningful results – increased sales, better training, better services – you name it.”
One of the critical things about gamification is that it isn’t about making your brand more entertaining; it’s about driving a business result. “People hear the word ‘gamification’ and they often think about games, but it’s not about games at all,” Paharia said.
“Games are more art than science; they start with a blank sheet of paper and your whole purpose is to create something that entertains. Gamification is more science than art; it’s motivating people through data. You come up with the business results you want and work back from there.”
Paharia starts by asking a client what key metrics the organisation is trying to improve, followed by a mission statement. “This could be trying to drive word of mouth impressions by a certain percentage,” he said.
“From there, we identify what the key performance indicators are that we’re going to measure to determine if we’re successful or not, and how we optimise the program. The process leads to the individual features people can do to drive those metrics.”
As with any new methodology and technology, gamification can fail if it’s not utilised in the right way. One of the biggest considerations Paharia points out is that you must have something in your experience with its own intrinsic value.
“If I have a news site that doesn’t have fresh news every day, then no amount of gamification is going to help me because the core isn’t there,” he said.
“Secondly, when we engage with a system, we all either explicitly or implicitly ask what’s in it for me. There needs to be a good answer to this question, because you might get a short-term lift but no long-term gain. This can be easy things like monetary value rewards, but status, recognition, early or exclusive access, power – you need to provide meaningful value to your participants for engagement.”
While applications of gamification are proliferating, what Paharia claimed many organisations are only just realising is that gamification is “a big data processing engine”.
“Big data is such a vague term and people don’t know what to do with it. Gamification is an easy way of understanding how to automatically, scalable and repeatedly use big data being captured and generated by all my systems,” he said.
“You’re taking all this user activity data, feeding it into a rules engine, which runs a bunch of logic to work out what to do next, what kinds of offerings to offer next. People have always captured this user data and fed it into the engine, but they’re realising more and more the insights and visibility they can get out of our data.”
To meet this demand, Bunchball is building out its own data and analytics practice in order to take this great treasure trove of user activity data and make it actionable and insightful for customers, Paharia said.
Gabe Zichermann, author of the upcoming book The Gamification Revolution and founder of Dopamine, a consulting agency focused on gamified campaigns for employees and consumers, claimed gamification has been going on in the workplace for a long time.
“What's really changed in the last three years has been the new set of tools, technologies, design disciplines and frameworks that are allowing us to do gamification in the workplace in a more scalable and repeatable way,” he said.
“It's also about understanding the evolving science of human engagement and interaction in a way that produces better long-term results.”
Gamification as a factor in next-generation loyalty
It is the combination of gamification with big data and motivation that has led Paharia to also claim the dawn of a new era in customer loyalty. His upcoming book, Loyalty 3.0: How to Revolutionise Employee and Customer Engagement with Big Data, argues gamification and big data will become vital for organisations wishing to retain customer loyalty in the face of multiple communication channels and increasingly knowledgeable and savvy consumers.
In the book, Paharia describes frequent flyer programs as the first generation of customer loyalty program, while one-to-one marketing is loyalty 2.0. “Loyalty 3.0 is about motivation, plus big data, plus gamification,” he claimed.
The loyalty model has traditionally relied on purchasing history and data, and one constituent they serve, which is their customer, he continued.
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“What we realised is you’ve taken this one data stream and replaced it with multiple streams through big data, such as all your online activity, sharing behaviour, and so on,” he said. “All of that is raw material for the next generation of customer programs. And because it’s not just customers but also your employees and partners generating data, you can now motivate anyone.
“Loyalty is the right frame for this, but it requires a redefinition of the word back to what it actually means. Loyalty has come to mean mercenary loyalty to the best deal, because that is what the industry has turned it into. There is no real loyalty being generated. What loyalty actually means is that we have a relationship that transcends the transactional; it’s about something else. So what is that something else and how do you drive that level of engagement to escalate that relationship?
“True loyalty is the absolute right frame for gamification.”
Although it’s early days, Bunchball has seen a marked rise in interest in this approach to consumer-facing applications utilising vast data sets, and in the last quarter signed up the US NRL, Coca-Cola and Urban Outfitters as customers.
“We’ll see more Fortune 100 companies utilising these, seeing some success, and then others will start to want to do this too. But we have some good early adopters,” he added.
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