Gamification isn't just about badges and trophies. Experts weigh in on what you need to make next-generation customer rewards really work for your business.
Foursquare does it. Mint.com does. Even NBC and Warner Brothers do it.
Like it or not, gamification is here to stay. So embrace the idea that you can encourage customers to stay loyal to your brand by using some of the ideas involved in game mechanics on your site, in your service, and even in your storefront.
Rajat Paharia, founder of San Jose, California-based Bunchball, one of the earliest entrants into the gamification sphere, believes gamification's explosion is simple. Gamification, he says, "satisfies our fundamental human needs and desires for reward, status, achievement, and expression." It's just next-generation customer rewards, with a savvy eye on consumer psychology.
Certianly, that's a loaded description. But with careful planning, Paharia believes that every company in nearly any vertical can find ways to gamify their business. But where to start? Experts weigh in on the most important things to consider mapping out a gamification plan for your company.
When building a gaming aspect into your site, it's essential to let your users show off to—or compete against—their friends or online connections. At New York City-based Codecademy, for instance, a user can keep tabs on her friends' progress, and see how he or she stacks up against them using Facebook and Twitter. Zach Sims, Codecademy's founder, says the social aspect is important for two main reasons: it keeps people interested, and it draws new users to the site.
"It's a way for people to show the world that they're accomplishing things," says Sims. "We have leader boards which lets users compare themselves with friends. It's not just you sitting on your computer alone anymore. It's you striving to achieve something and learn something in order to better understand coding."
A corollary benefit of making the gamification aspect shareable over social media, Sims says, is that it can bring new users to the site. Sims says that Codecademy, which has attracted nearly one million users since its launch this past summer, could not have gone viral without friends sharing what they learned within their networks. Why would people share in the first place? "People get excited about winning," he says.
Traditional marketing loyalty programs may soon become extinct.
Rajat Paharia believes that typical programs, like frequent flier miles, are adept at getting people to sign up, but rarely provide enough information by tracking customers as they interact with the brand.
"There's no middle—in the beginning you're excited about all the things you can possibly get and then at the end you get excited, but the middle is like a giant vacuum," he says.
His advice? Create an intermediate level where users are getting feedback on their actions.
To encourage this sort of constant interaction, start-ups such as CrowdTwist, which is based in New York City, has built a software platform that allows businesses to offer its users points for a variety of tasks, from "liking" the company on Facebook to reading the company's blog. But the points have real-life rewards. In one example, CrowdTwist's software was used by a music festival that let high scorers win prizes like dinner with their favorite band, or getting serenaded on stage.
"Loyalty is no longer focused on a singular transactional moment and transactions are no longer strictly monetary," Irving Fain, the company's CEO, told VentureBeat. "Consumers are tweeting, posting, sharing to social streams, walking into stores, checking in on FourSquare. All of these actions have value in today's world."
"In my mind, we're not here to build a game," says Chris Cartter, founder of Daily Challenge. "We're here to help people change behavior." The company, based in Boston, is a fitness and lifestyle company that makes money by encouraging people to get in shape.
After users sign up for the Daily Challenge, it sends them an e-mail giving them a task that is meant to improve their health and well-being. Cartter asserts that when building an aspect of gamification into your site, it shouldn't take precedence over the service or product that you're offering. Most products, he says, have utilization curves that plummet pretty quickly after initial adoption, and while "game mechanics can help solve that problem, the goal is not to create a game."
Offering points or trophies or badges is, at this point, somewhat of a cliché. Some, like Michael Wu, the principal scientist of analytics at Lithium Technologies, a social media marketing firm based in Emeryville, California, says that users are already so inundated with these types of devices that they're losing their charm. Moreover, badge-style rewards are becoming so ubiquitous they're beginning to be interpreted as spam.
"One of the dangers is that you could get people into this mode where they just don't want to have anything to do with anything that is gamifies," Wu said recently. "And when you give them badges they will say 'I knew it, it's one of those things again.' Eventually if for every action people take we give them badges or points, then eventually people will get tired and they will say 'I know your trick.' Right now, it is the same thing with spam mail that you get, or a pop-up ad. If you see something pop-up you don’t even wait for it to load, you just close it immediately, you know what that is going to do. So once people get to that stage then it is a loss for everyone."
So, how do you make these tools work for you? According to Paharia and Bunchball, badges need to offer some inherent value to a user—even if that value is just a puff of self-esteem or pride.
"Badges should tie directly into your business goals and to what users care about and are proud of," the company notes. "As a game mechanic, they deepen engagement with users. They also encourage exploration of your site, even mastery. They provide that sense of achievement we have already discussed as being a core human value. Like other core game mechanics, Badges can also be used to encourage users to take a specific action."
Ever consider gamification for your employees? One of Bunchball's fastest growing products, called Nitro, allows companies such as SalesForce.com to incentivize employees to complete an assortment of tasks. Nitro is essentially a software platform that allows employers to offer points to employees, with points being redeemable for such rewards as a dinner with the CEO or a new set of golf clubs.
"For years, no one could see how they were doing—it was all opaque," says Paharia. But now, by letting employees compete against colleagues with points, each worker knows exactly where they stand. It's also a powerful motivational tool, showing employees that they're not working in a vacuum.
"It encourages the notion of teams, that an not only doing it as part of myself, but part of a group," he says. "It's all about focusing on internal."