Gamification isn’t just a tech trend. It has been used by financial planning, telecommunications, auto companies and many others to encourage and reward specific consumer and/or employee behavior.
What Is Gamification?
“Gamification involves using the tools and methodology that were popularized by games and using them in other areas of life to make things easier,” explains Yoav Luri, co-founder of Boulder-based Simple Energy. You might, for example, use gamification to incentivize your sales team, boost employee morale, build customer loyalty or help attract new customers. It’s a serious strategic tool, and scrappy startups such as Simple Energy are making apps and creating platforms that employ deep knowledge of behavioral and data science to help companies large and small use gamification to their advantage.
Luri’s company, for example, provides software to utility companies to help them encourage their customers to save energy. Using Simple Energy’s Web platform, utility customers compete with one another to save energy by, say, turning down their thermostats or turning lights off. A public leader board tracks the friendly competition, which also awards badges and reward points to top energy savers. Simple Energy’s utility clients allow users to redeem points for physical prizes, such as gift cards.
“We save customers over 4.5 percent on average on their energy bills through these behavioral science mechanics,” Luri says. “Our main competitor, which just went public, doesn’t use gamification and saves customers about 2 percent. So we know we’re twice as good as the 800-pound gorilla.”
Experts say that a critical element of using gamification effectively isunderstanding what motivates the players. “The biggest thing we’ve learned is that no one reward fits everyone,” says Maxwell Finn, co-founder of Loot, which creates incentivized word-of-mouth marketing programs for brands. “The trend is going in the direction of platforms that tie multiple types of rewards together to drive customer action.”
For example, a tangible reward, such as a discount, may be more effective when attracting new customers to a restaurant (i.e., “take a selfie in the restaurant, post it on Twitter and get 20 percent off on your next order”), while an intangible reward (such as getting your name on the menu) is more likely to appeal to those who are already loyal. While it’s often tough to measure the ROI of a campaign like that, Finn claims it’s not unusual for a brand to see an increase in social engagement from customers. The trick, he suggests, is knowing what kinds of rewards will appeal to individual customers. He’s working on perfecting his system so the big brands and the small to mid-sized businesses that are his customers will have more data on which campaigns drive the most interaction with customers, and what rewards excite them the most. Call it ramification 2.0—it’s where game mechanics meets big data.
The Sales Contest, Reinvented
Gamification may also be a great way to motivate employees, but may cause more harm than good if not used correctly. Adam Hollander, CEO of FantasySalesTeam, started his company to put a more sophisticated spin on traditional sales contests. Most contests, he claims, motivate the top 20 percent of salespeople—the ones who win all the time. “Those are not the people who need to be motivated,” Hollander says. The middle 50 percent and the bottom 30 percent of sales performers are actually de-motivated by traditional contests, he says, because they have little chance of winning.
So Hollander created team-based competitions, where sales reps earn rewards for the success of their co-workers. Also, he says, “you have to give them multiple ways to win prizes. That keeps more people engaged for a longer duration.” For instance, he says the most successful campaigns combine results metrics (how much product have you sold, and what percentage of your quota did you meet?) with behavioral metrics (how many cold calls did you make?). For at least one client, such a competition resulted in a 176 percent increase in sales.
Regardless of whether you're trying to affect customer or employee behavior, a few words of caution:
- Make sure the game is easy to enter but not easy to game, Luri says. “If your game is too easy to rig and cheat, you’ll find yourself not having engaged people.”
- Be clear about why you’re using gamification. “It should be fun,” Hollander says. “But the No. 1 reason to implement gamification is that you’re looking to drive a result.” Articulate what you’re trying to achieve and how you’ll measure success.
- “People often implement something fast and don’t think about how they’ll maintain it,” Luri cautions. “They’ll slap up a leader board for anything and not think about how that’s integrated into a full experience.” Think long term, he says, to help avoid the perception that your gamification efforts are, well, just a game.
Read more articles on motivating employees.
This article was originally published on February 17, 2015.