CFO World

Why gamification and big data go hand-in-hand

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

  1. Fast feedback
  2. Transparency
  3. Goals
  4. Badges
  5. ‘Levelling up’
  6. Onboarding
  7. Community
  8. Competition
  9. Collaboration
  10. Points

“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.

Today’s customer loyalty game
CMOs using mobile apps to drive customer loyalty: Report
Why you need to create frictionless customer experiences

“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.

Up next: 3 examples of gamification in practice

Page Break

To illustrate just how extensive the use of gamification has become to date, we’ve compiled three examples of real-life applications, each driven by distinctly different motivators.

Example 1: Driving conversion rates for Adobe Photoshop
Gamification was used by media technology and digital marketing vendor, Adobe Systems, as a way of improving the number of trial users of its Photoshop product suite who purchased the product. Although the company offered a 30-day trial to on-board customers, people weren’t signing up. Bunchball’s Rajat Paharia, who worked on Adobe’s gamification activity, said part of the problem was the complexity of the product suite.

“Adobe has a portfolio of tutorials, video content and information on how to use the software but people just want to get in and start using it and the conversion rate was low,” Paharia explained.

“We worked on how to change the on-boarding process using gamification. What we identified was that if you can get people across 12 key pieces within Photoshop, gain a sense of mastery and fluency with the tools, and then learn by doing, the likelihood of them buying will be much higher.”

Bunchball provided a plugin with them called ‘level up with Photoshop’, offering 12 missions, each exposing trial users to functionality such as red eye removal, object removal, teeth whitening, split across three levels of difficulty. Users earned points, unlocked badges, and could see a progress bar of their efforts. The platform also had a number of links to tutorial content Adobe had always offered, in case users couldn’t complete a specific mission.

“It flipped the typical learning model, which is that ahead of time do the learning, read the manual, and then in future maybe you’ll apply something you have learnt. Instead, this model was ‘do and learn’,” Paharia said. “That learning is very directive; it’s helping you accomplish a task and is that much stickier.”

Close to 70 per cent of trial users made it through the first level of four missions, and 42 per cent made it all the way through. Adobe saw overwhelmingly positive sentiment from the people surveyed, and notably, four times as many trial users bought Photoshop at the end of the gamification activity as those who hadn’t gone through it.

“Adobe had a lot of data on the features users needed to learn, as the program was geared towards amateur photographers. They also had the new stuff in every new release and wanted to make sure people saw those too. We offered a mix of those through the 12 missions and it worked,” Paharia added.

Example 2: Driving consumer awareness and branding

Bunchball also devised a gamification activity for banana supplier, Chiquita, as a marketing campaign around its sponsorship of the animated film, RIO. The company built a website aimed at mums and kids including videos and a sweep stakes offering a grand prize trip for four to Rio De Janiero.

Paharia said the challenge with most sweepstakes sites is that users normally sign in, fill in the prize form details, and never come back. “They’re also inherently counter-viral – if I’m smart, I’m not going to tell anyone else about this as it’ll reduce my chances of winning,” he said.

To combat these two factors, Chiquita’s site featured lots of video and gaming content. Visitors earned banana sticker badges in their online passport for consuming various types of content, and accomplishing various tasks.

“The clever thing was they kept a running total of how many badges the entire community could unlock, and unlocked various prizes at every 25,000 badges,” Paharia said. “No one was going to get the grand prize trip to Rio unless the entire community together unlocked 100,000 badges. By doing this, they were able to counteract that counter-viral nature.”

The activity generated 5.6 million word of mouth impressions and the website chalked up over 1m page views, including 800,000 unique site visits.

“Chiquita was also able to capture a huge amount of consumer information who had signed into the site and provided contact information they could market to in subsequent campaigns,” Paharia added.

Example 3: Community building

Gamification provider, Badgeville, worked with storage and networking vendor, EMC, on its rewards and motivation program (RAMP) to encourage more participation across its own developer and online community.

The initiative was designed to reward different activities, recognise key social champions across its community, and build an aspirational system that motivated and increased social activity, originally for employees and then the wider user community through EMC’s ECN network, said Steve Sims, founder of Behaviour Lab at Badgeville.

“The idea was that if EMC could recognise employees for what they are doing and also developers within the network, it would build an ecosystem where things are stickier, where people will communicate with each other and with EMC,” he said.

“The Ramp program was firstly about encouraging participation in the community, then it was to connect real world and live events. It was also designed to boost registration and participation in those events.

“Thirdly, the aim was to have a vehicle for after event contact so that they could create almost like a 360-degree touch with the customers, developers and other participants within the community.”

As a first step, EMC recognised people for social contributions, then added levels to show time and grade as well as real-time notifications. “One of the important things in gamification is to provide real-time feedback for how your [staff] is doing,” Sims said.

“EMC then hooked the ECN up to try to create systemic connection both before events and after events. So you have a community and you’re interacting. The next thing is how to extend that. So we used this program inside of the community to engage interest for things like EMC World. The overall mission was to build activity and community and then to extend it to all of the events they did.

“To tie it all together, EMC reached out and connected with the employees and the developers after the show to continue. The whole thing was basically a concept of touch and journey together. It didn’t matter what the event was, what was before or after, EMC is trying to drive social connection and contact.”

The result was to increase user activity post-RAMP by 20 per cent, around participation, downloads, replies, comments and so on, Sims said.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO Australia conversation on LinkedIn: CMO Australia, or join us on Facebook: https://www.facebook.com/CMOAustralia

Signup to CMO’s new email newsletter to receive your weekly dose of targeted content for the modern marketing chief.