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Gamification tips to bolster customer loyalty

Matt Siden
Gamification tips to bolster customer loyalty Matt Siden

In the last 24 hours, you have probably done at least one of the following: checked in on foursquare (maybe even gotten a badge), tended to your farm on "FarmVille," used a Starbucks rewards card, or accrued some type of reward points (e.g. airlines). Many people may not realize it, but they are actually engaging in some type of gameplay, or what is being called gamification.

Companies are discovering that applying gaming mechanics (e.g. rewards, virtual expression, challenges) to marketing campaigns can drive participation and brand loyalty. The fundamental concept of gamification works because it satisfies human needs for reward, status, achievement, competition, self-expression, and even altruism by using techniques like points, levels, badges, and virtual goods.

The primary goal behind marketing is to maximize the lifetime value of the customer base by increasing the average selling price and frequency of purchase. Marketers are constantly searching for new and innovative ways to increase website traffic and encourage user engagement. But now, many are learning that integrating gamification into their core content, community, and commerce experiences will help drive engagement, participation, loyalty, and revenue. It's no surprise that a recent report by Gartner found that more than 70 percent of Global 2000 organizations will have at least one gamified application by 2014, making gamified services for consumer goods and customer retention as significant as Facebook, eBay, or Amazon.

Here are a few gamification tips that will help bolster your customer engagement:

Reward users with points
For users, points don't necessarily have to hold any monetary value, but they should hold some importance to the consumer. For example, after collecting a certain amount of points, one could redeem them for virtual goods like wallpapers or downloads.

For brands, points are a good way to get consumers to complete certain tasks. Brands can capitalize on this notion and use points to drive different behaviors within a site or application by using them as status indicators, allowing points to unlock access to content, or making them valid for virtual goods and gifting.

"Level" the playing field
Gamification works because it satisfies the human need for status and recognition, which is why levels can be an impactful game mechanic. Levels are an indication that a person has reached a milestone or a stage of accomplishment and should receive a certain amount of respect and status. Think of it this way -- travelers are much more likely to be loyal to one airline if traveling a certain amount of miles unlocks new privileges reserved for frequent flyers. Businesses can use levels within their websites to regulate access to certain parts of a site or as a way to recognize reaching a milestone to honor frequent users and engagement.

Challenge them
Challenges give users missions to accomplish and then reward them for doing so. By creating a challenge and reward system, users constantly feel like they are working toward a goal. The general approach is to configure challenges based on actions that you're tracking, and reward your users for reaching milestones with trophies, badges, and achievements. For example, a business could challenge users to beat a high score in an online game. If a user achieves the high score, they would be commended and receive a badge, which will attach to their profile.

Provide virtual goods
Virtual goods are non-physical objects that can be purchased for use in online communities and/or games. They help a game economy become more effective over time. Users can purchase virtual goods like clothing or decorations to create an identity for their virtual self (avatar) while comparing and showing off with their friends. "The Real Housewives of Atlanta" gamified its site and now allows users to create their own avatars. Users have the ability to style their avatar with virtual goods -- the more they buy, the better their avatar looks.

Competition is good
Competitions enable users to challenge one another to attain the high score at an activity. Once everyone has done the activity, the user with the highest score wins a reward, while the losers receive a consolation prize. Team competitions are also a possibility. For example, when Bravo gamified "Top Chef All-Stars" with the "Virtual Top Chef Game," users chose their favorite "chef'testant" and were broken up into teams accordingly. Team members were then able to simultaneously earn points for themselves and their team through challenges for a chance to win shared and individual prizes.

This is great for multiplayer-enabling games and other single user experiences, as it allows participants to display how they did in a game and challenge others to compete against them for the title. This helps increase engagement across the board.

Leaderboards are high-score tables used to bring aspiration to users by adding fame to their name. They also indicate how a person is doing against friends and competitors. In the context of gamification, leaderboards are used to track and display desired actions, using competition to drive valuable behavior. If users know that scoring points could land them a spot at the top of the chart, they will engage more and work harder to earn points. After all, who doesn't want to see their name in lights?

The complexity of implementing game mechanics depends on multiple factors, including a business's content, audience, goal, and the type of tactics it wants to use. Regardless of the level of complication, if a gaming program is well-executed, an organization can expect to see an increase in key metrics such as time spent on the site, page views, and return visits.

The key to success is to develop a tailored strategy where a company can create motivational user behavior experiences around existing website functionality or content. By strategically incorporating some or all of the above concepts into a company's website, a business can increase engagement and encourage users to visit the site more often.

Matt Siden is marketing manager at Bunchball.

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to leave comments.

Commenter: Jignesh Thakkar

2011, August 01

Interesting Article, Matt! I think some of the points you mention apply to more or less ALL marketing strategies and not only to 'gamification'. Reward users (first time buyer discounts or research methodology inputs) & "Level" the playing field (more purchases, better rates) are a couple that I could relate with my industry of http://www.reportsnreports.com/">market research reports and business intelligence studies. At a broader level, these are different mediums to keep customers engaged and interested in 'taking action' every time they think of going online for a concerned activity. However, based on the Gartner report you quoted, it looks like irrespective of one's target audience demographics, games may soon become a 'required / by-default-in-the-list' market tactic.