What is Gamification?

Gamification is the strategic process of inserting game-like mechanisms into any digital experience to boost user activity and drive engagement and loyalty. It takes the user, customer, fan and employee data, and turns it into actionable behavior that supports business goals.

Adding Gamification to your engagement strategy doesn’t have to be overwhelming. With minimal guidance, you can create a strategic plan and implement a scalable gamification program, that serves your business goals and supercharges results.

This expanded resource guide helps define Gamification, and is designed to provide you with best practices, strategic recommendations and implementation examples. Consider this your primary reference in adding Gamification to your engagement strategy within your organization. 

Within this guide, we will answer the following questions: 

  • What is Gamification?

  • What does Gamification do?

  • How does Gamification motivate people?

  • What are Game-like Mechanisms and how do they work?

  • So how does Gamification drive engagement?

  • Why is Gamification important?

  • How can I measure Gamification success?

  • When does Gamification fail?

  • What are the steps for successfully adding Gamification to my engagement strategy ?

What is Gamification? 

Gamification is the strategic process of inserting game-like mechanisms into any digital experience to boost user activity and drive engagement and loyalty. 

What does Gamification do?

Gamification solves one of today’s most critical challenges: engagement and retention. Rather than using conventional strategies, companies today are employing Gamification mechanisms to motivate engagement and loyalty.

How does Gamification motivate people?

Motivation involves the interaction between a person and a task, in a situation and at a time. It helps us move the needle, but is a tricky multifaceted thing.

What are Game-like Mechanisms and how do they work?

Game Mechanisms are what make games exciting and act as a social motivator to interact and connect with people in a form of competitive play. 

So how does Gamification drive engagement?

Today, our whole business world is built on external rewards systems designed to motivate customers and employees to take actions that support business goals.  However, there is a mismatch between what science knows and what business does.

What are the steps for successfully adding Gamification to my engagement strategy?

A successful Gamification program is essential for driving sustainable customer and employee engagement. Build your program by following these four steps.

Gamification Definition:

Gamification is the strategic process of inserting game-like mechanisms into any digital experience to boost user activity and drive engagement and loyalty. It takes the user, customer, fan and employee data, and turns it into actionable behavior that supports business goals.

Additionally, Gartner’s latest Gamification definition is: “the use of game mechanics to drive engagement in non-game business scenarios and to change behaviors in a target audience to achieve business outcomes.” 

The key elements of Gamification include:

  • Clearly defined business goals. Gamification goals are business goals, and requires a deep understanding of the business outcomes you aim to achieve with the program. It supports marketing goals (more engagement, viral audience growth), sales goals (growth in bottom line revenues, reduced customer churn, sponsorship opportunities) or HR goals (better employee on-boarding, training, increased employee performance and collaboration).

  • User data. Gamification lays on top of the data users generate as they interact with various systems. It uses this data to motivate, engage and drive actions that support business goals.

  • Defined target audience. The success of any Gamification program depends on the target audience motivators and behaviors. A good gamification program will segment the audience, create personas and tailor the gamified experience around it. 

  • Use of game mechanisms in non-game context. Gamification sets the user, customer, fan and employee experience at the epicenter, and adds game mechanisms around it. It’s simple. You take something that already exists: a customer or fan engagement platform, a loyalty program, or enterprise software, and you turn it into a personal, fun and rewarding experience by gamifying it. 

  • Variable rewards. Our brains are wired to perform certain actions and engage in certain behaviors in return for rewards. Rewards can be either extrinsic (gift cards, loyalty points) or intrinsic (social status, progress). Rewards trigger the release of dopamine in our brain, and recent neuroscience has revealed that our dopamine system skyrockets motivation when rewards are unknown. Because Gamification links certain behavior to a variable reward schedule, it is a powerful hack that focuses attention, and supercharges motivation.

What does Gamification do?

In today’s digital era, grabbing people’s attention is one of the hardest things to do, and yet is critical for business continuity. Rather than using conventional strategies, clever companies are employing Gamification mechanisms to reduce churn and drive engagement and loyalty. This is how:

In practice, consider implementing a platform within your Gamification strategy, that can plug-in Gamification mechanisms into any digital experience, and work for you towards achieving your goals. Such a gamified system must:

  • Motivate users to complete a certain action

  • Make it possible for the users to complete the action

  • And finally, send triggers or cues to guide the users to complete the action

How does Gamification motivate people?

Motivation involves the interaction between a person and a task, in a situation and at a time. One the most influential behavioral theories of motivation, the Self-Determination Theory, suggests that people have an internal desire for growth. But they need the external environment to support it.

In a way, people are like objects. We have a certain inertia we need to overcome in order to take action. Motivation helps us move the needle, but is a tricky multifaceted thing. On one hand, it happens intrinsically, when we take action because we want to, and because we find the activity fun and enjoyable. On the other hand, it happens extrinsically, when we do something because we need to do it, and motivation lays on outside rewards. Today, our whole business world is built on an external system of rewards. However, there is a mismatch between what science knows and what business does.

While both types of motivators are important, researchers have found that intrinsic motivation and extrinsic motivation can have different effects on behaviors and how people pursue goals. Latest behavioral research suggests that external motivators work up until a point where baseline rewards have been sorted, after which they will  actually decrease motivation and limit performance. Intrinsic motivators on the other hand, drive behaviors that result in internal rewards, like enjoyment, positive feelings and happiness, which makes it more effective in the long run.

A well-designed gamified experience goes right to the heart of the human psyche. It blends in intrinsic and extrinsic motivators, in a variable system of rewards, nudging behavior that support business goals.  The real news with Gamification is the digitalization of motivation, and the way organization’s today are successfully implementing it into their digital business strategy.

What are Game-like Mechanisms and how do they work?

Game mechanisms are what make games exciting and act as a social motivator to interact and connect with people in a form of competitive play. There is often a common misunderstanding between Gamification and Games, yet they are not the same thing. 

Gamification is not about creating a new game to engage customers and employees. It is about taking the best parts of games (the game-like mechanisms that motivate players) and applying them to non-game context, to encourage the target audience to carry out certain behaviors. With Gamification the user experience is the epicenter, and the Gamification mechanisms go around it. We often see that when companies choose to gamify high-value interactions with customers and employees, they drive more sales, stronger collaboration, better ROI, reduce churn and employee turnaround rates, and more. 

There are two categories of game mechanisms that are relevant to Gamification: Game Dynamics and Game Mechanics. In practice, each Game Mechanic is tied to one or more Game Dynamics. The mix depends on the business outcomes the gamified experience aims to serve. 

Game Dynamics

The Game Dynamics refers to a set of emotions, behavior and desires Gamification nudges in people. These are core intrinsic motivational drivers that carry out behavior. To supercharge engagement and retention, the most important Game Dynamics are: 

The human desire to build Relationships is linked to the motivational drivers: Competition, Collaboration, Community

The feeling of Accomplishment is linked to the motivational drivers: Progress, Achievement, Collection

The desire to feel Empowered is linked to the motivational drivers: Autonomy, Instant Feedback

Unpredictability is linked to the motivational drivers: Surprise, Exploration, Scarcity

Constraint is linked to the motivational drivers: Loss and Avoidance, Scarcity

Overall, these game dynamics not only define, but drive Gamification.

Game Mechanics 

Game Mechanics are the basic processes that drive the user action forward in a gamified system. These are extrinsic motivators that guide the gamified experience.

Achievements are defined objectives and serve to clearly identify to users what they need to accomplish as a team or as an individual. They point out what behaviors are valued within the program. 

Milestone Unlocks are the game mechanic deployed when the user reaches an objective, and unlocks next objective or challenge. Milestones Unlocks help users level up (triggering the Progress, Achievement, Collection motivational drivers), and can act as a key to unlock special Badges or Rewards (triggering the Surprise and Exploration motivational drivers).

Points are the numerical representation of progress towards a particular objective. Internally, it is the way a gamified system keeps count of the user’s actions. Externally, points provide Instant Feedback to the user (addressing the Instant Feedback motivational driver). It can indicate the users’ Social Status (calling on the Relationship Game Dynamic). Help users identify high priority activities and, in some cases, allow the purchase of Real or Virtual Goods (triggering the Collection motivational driver).

Badges are the virtual representation of Achievements. Once the users have accumulated a certain number of Points, they may be awarded Badges. This game mechanic allows positive reinforcement for the targeted behavior, triggering the motivational driver of Collection and Achievement. 

Leaderboards are a visual display of user Progress and Achievement, where users are ranked based on a set of criteria that is influenced by the users’ behavior towards the desired action. Gamification is motivating people through data, so a big part of the user experience is making the data visible to users in Leaderboards. In many cases, visual Leaderboards bring the social component and motivates teams/individuals leading to remain at the top, and foster competition among another team/individual to displace the current leaders. However, even though Leaderboards are meant to motivate people, if designed incorrectly, it might have the opposite effect.

Rewards in a gamified system can come in many forms. Along with cash value Rewards and Virtual Goods, users value status, recognition and appreciation, or in some cases early or exclusive access. Encouraging users to accumulate Rewards throughout their journey can instantly boost their involvement with your system, product or service. A powerful way to leverage Rewards is deploying them to trigger intrinsic motivation, by bringing unpredictability into the online experience with a variable system of Rewards. With variable Rewards the user receives an unknown Reward by completing a required action.

Notification in online gamification experiences is the way fast feedback is delivered to users. Positive feedback reinforces good behavior, whereas negative feedback enables users to quickly learn and adjust. For example, Notifications can be sent when users hit an Achievement or Unlock a Milestone, suggesting next actions they need to take. Notifications guide users down the participation chain, providing clarity and motivating deeper engagement.

Progress Bar is the visualisation of users’ journey towards achieving the goal. In the same line with Notifications, progress refers to providing feedback to users they are on the journey, encouraging them to take the next step. The Progress bar triggers the motivational driver of making Progress.  

Challenge is a powerful game mechanic to motivate users to take action by triggering the Achievement motivational driver. In a gamified system, giving users the option to challenge each other towards a goal, can give grunt work meaning, accelerate user learning and skill development, and supercharge progress towards a particular business goal.

This game mechanic enables users to see how everybody in the program is doing, while enabling Communication within the Community. For example, Social Feeds can be a great way of reinforcing Competition by announcing other users’ Milestone Unlocks and Achievements, or it can foster Collaboration by allowing users to ask questions within the Community when they feel stuck with a particular challenge.

So how does Gamification drive engagement?

Today, most of our business world is built on external rewards systems designed to motivate customers and employees to take actions that support business goals. This strategy has its benefits. Beside enhancing focus on completing grunt tasks, it triggers initial interest and desire for the activity. For example, companies using engagement initiatives based on Extrinsic Rewards (such as offering gift cards, money, merchandise, discounts) can be very successful in the discovery phase. They provide a compelling reason for audiences to engage in the experience in the first place.

However, as we have seen earlier, if people continue doing an activity justified by Extrinsic Rewards, their intrinsic motivation lowers and initial engagement is lost. This is what psychologists identify as the Overjustification Effect.

Gamification on the other hand, has the power to ensure sustainable engagement by making the experience more intrinsic. To sum up the psychology behind it, Gamification uses Extrinsic Rewards (Badges, Points, Physical or Virtual Goods) to attract users in the engagement experience. Then a good gamified system will transition the user’s interest through Intrinsic Rewards (Progress Bars, Notifications, Social Status in Leaderboards), and will finally use intrinsic motivators to ensure the user’s long term engagement.

Why is Gamification important?

How can I measure Gamification success?

As you might know by now, adding Gamification to your business strategy will offer customers and employees a sustainable level of motivation, and will help them reach a higher level of engagement, so that they use your application or service more. To measure the success of your Gamification program, you must first define a set of key performance indicators (KPIs).

Choosing the right set of KPIs to track is essential for Gamification success. First of all, KPIs are important in defining the game mechanisms deployed to the digital experience. Second of all, KPIs will help you assign a monetary value to the gamification program and measure its ROI. 

Independent from your business goals, it is important to create a distinction between process KPIs and performance KPIs. A process KPI is the behavior you’d like to change through Gamification. For instance, your goal might be to increase the quality of the data your sales team inserts into the CRM system, so that in turn you can improve the accuracy of the sales forecasts. In this case, a process KPI can impact a performance KPI, and result in more sales.

In marketing, Gamification can help in the various stages of the conversion funnel. Take this technique into account when you define your customer loyalty strategy. For example, in most gamification strategies applied to digital applications, conversion is one of the main aspects to monitor, and thus it will be one of the KPIs you want to track.

When does Gamification fail?

While Gamification can be a powerful tool to supercharge engagement, reduce customer churn and drive loyalty within business systems, not all gamification programs are created equal, and some managers are struggling to achieve desired results. So when does Gamification fail?

When it lacks clear (and realistic) objectives and KPIs.

One reason why some companies are failing to implement gamification programs is the non-definition of clear (and realistic) objectives and KPIs to monitor the results of their strategy. When programs start with a vague idea of what they aim to achieve by gamifying the customer or employee experience, without drilling down sufficiently into each business goal, result will fail to come.

When it doesn’t understand the target audience.

An engaging gamified experience starts with an intimate understanding of the target audience. This means analyzing the data, segmenting the audience and creating personas, understanding what motivates each group. If the motivators are not defined, the program will have limited impact into inspiring behavior, especially high-priority behavior, limiting the ROI. 

When it motivates the wrong behaviors.

Some companies get their audience right, but then they motivate users into taking actions that don’t support the overall strategy and business goals. Identifying the desired audience behavior (e.g. signing-up, buying more products, writing reviews, spending more time on the app or platform, closing more high-value deals, etc) can make or break the program success.

When it lacks participation.

While some gamification programs successfully motivate user sign-ups through extrinsic rewards (discounts, loyalty points), they fail to keep users engaged in the system. That’s a problem – and one that signals a flaw in the program design. A good Gamification experience transitions the user’s initial focus on extrinsic rewards, to the emotional engagement found in getting intrinsic rewards (peer recognition, being part of a community). This means the program is designed to inspire active participation, because participating is interesting and satisfying in itself.

When you are doing it alone.

Gamification is a powerful business tool when the program is designed and implemented effectively. In order to succeed with Gamification, you need a partner that not only provides the scalable technology you need to execute the strategy, but has the knowledge and experience to consult you throughout the process. At StriveCloud, we understand the fundamentals of human motivation, and the game mechanisms that deliver sustainable engagement, rich insights and high ROI, within any digital application.

What are the steps for successfully adding Gamification to my engagement strategy?

Developing a successful Gamification program can be broken down into 4 simple steps:

  • Plan your program

  • Design your program 

  • Build your program or choose a technology partner to implement it for you

  • Use the data made available by the gamification technology to continuously optimize it, and drive higher ROI

We’ve created an infographic to simplify the process by breaking it down step-by-step.

Download Infographic

Deploying Gamification is a worthwhile investment of time and resources, and can be incorporated directly into the systems that matter to your business. In today’s digital engagement model, motivation can be packaged into any application and scaled to engage an audience of any size at a very low incremental cost. The question is, what is important for your business right now?

Not sure yet if Gamification is something for your business? 

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