How to Use Gamification for Driving Consumer Engagement

8 min read

Modern consumers experience constant information overload leading to diminishing effectiveness of traditional marketing tactics. Companies therefore need to find new innovative ways to engage with their customers. Gamification – the use of game elements and game design in non-game contexts – can help to embed brands in consumers’ lives.

Natalia Mæhle is an Associate Professor at the Mohn Centre for Innovation and Regional Development, Western Norway University of Applied Sciences. 

Gamification emerged around early 2011 and has quickly become a popular marketing trend. Companies can gamify almost any point of customer interaction, including websites, loyalty programs, marketing campaigns, and online brand communities. Consumers are rewarded with virtual items (e.g., points) for specific behavior (e.g., purchase), and those virtual items offer access to exclusive privileges and rewards, such as levels or prizes. Existing studies demonstrate positive effects of gamification on consumer engagement and motivation. For example, Hamari (2013) shows the effectiveness of one of the main mechanics in gamification (i.e., badges) on the usage activity, quality and social interaction within an e-commerce website. Findings from another study conducted by Insley and Nunan (2014) support the importance of including game elements to enhance the online retail experience.

However, gamification is not a completely new phenomenon. Some elements of games have been widely used in marketing for many years. For example, traditional loyalty programs allow consumers to collect points that can be used for future purchases or provide access to upgrades and extra services. But gamification takes it up to a new level and employs social media and digital technology to add “gamefulness” to existing systems and make consumer experience more exciting. In this way, gamification differs from simple points-based programs by making the earning of points challenging and fun. Playing the game is a reward in itself because it gives a feeling of happiness.

The positive effect of games can be explained by the flow theory developed by an American psychologist Mihály Csíkszentmihályi. «Flow» is the mental state of operation in which a person performing an activity is fully immersed in a feeling of energized focus, full involvement, and enjoyment. To achieve the flow state, an activity should have a clear set of goals, and there should be a good balance between the perceived challenges of the activity and one’s own perceived skills. It is also important to get clear and immediate feedback for the progress on the activity. Games satisfy all these conditions and therefore allow players to achieve the flow state. All games have a goal that gives the whole activity a purpose and meaning. Games have also a set of specific rules that limit what players can do to achieve a goal, and therefore require creativity and strategic thinking. Moreover, players get constant feedback (e.g., points, levels, progress bar) showing how close they are to achieve their goals. This feedback makes goal achievement more realistic by showing gradual improvement and motivates to play further. Finally, games are based on voluntary participation leading to a sense of security and pleasure. Another reason why games have a motivating effect is that they satisfy three human psychological needs – competence, autonomy, and relatedness. By receiving feedback and rewards, the players experience the feeling of competence and efficacy. The voluntary game participation satisfies the need for autonomy. Moreover, social aspects of the games provide the feeling of relatedness (i.e. need to feel belongingness and connectedness with others). Making the rewards for accomplishing tasks visible to other players or providing leaderboards encourage players to compete and provides opportunity for receiving social recognition.

Gamification can be used for various marketing purposes such as loyalty programs, promotional campaigns, online brand communities and crowdsourcing initiatives. Here are several examples of successful use of gamification.

Loyalty program: Starbucks Rewards One of the main features of this loyalty program is a mobile app acting as a fast way to pay and an incentive system to promote repeat visits. The Starbucks Rewards system rewards users with two stars per dollar spent, gives them free birthday reward and free in-store refills. After earning 300+ stars users get to the gold level with personalized gold card and receiving a reward after earning every 125 stars. Other ways to earn stars include participating in special offers, purchasing Starbucks products in grocery stores, and visiting Starbucks on monthly «Double-Star Days,» when Gold members can earn four stars for every $1 spent on eligible purchases. Starbucks Rewards employs several game mechanics such as points (in form of stars), progress bars, leveling, and rewards. These game mechanics act as incentives motivating users to repeat purchases by earning bigger and better benefits with every purchase. Starbucks Rewards program has been a big success for the coffee company with 12 million active loyalty members in the U.S. in 2016, up 16% from the year before.

Promotional campaign: Buffalo Wild Wings’ 12-week campaign leading up to March Madness (i.e., events surrounding the college basketball tournaments performed each spring in the U. S.). For this campaign Buffalo Wild Wings teamed up with SCVNGR, a location-based gaming platform, similar to Foursquare. Several custom challenges were set up and the points for completing these challenges could be accumulated and redeemed for in-store rewards and large prizes. Rewards for completed challenges included $5 off (3 points), a free Coca-Cola (20 points) and free wings (30 points). Buffalo Wild Wings’ challenges asked people to take pictures of their friends, the sauciest wing in the basket, fans of rival teams and the crowd going wild. Once these photos were uploaded to the SCVNGR network, they were often also shared on Facebook and Twitter, extending the reach of the promotion. When a player completed the custom challenges scripted by Buffalo Wild Wings, he became a sort of power user who could create his own challenges. The user-generated challenges that were most popular floated to the top of the list, acting as a sort of leaderboard. In the first three weeks, the Buffalo Wild Wings’ game accrued nearly 30,000 players. By the end, the campaign had 184,000 players at 730 Buffalo Wild Wings’ locations.

Brand community and crowdsourcing initiative: MyStarbucksIdea.com. It is a crowdsourcing platform allowing Starbucks enthusiasts to share, comment and vote on innovative ideas for improvement of Starbucks customer experience (e.g., ideas for new products). MyStarbucksIdea.com uses the following game elements. Users earn points by sharing ideas, receiving positive votes, commenting on other ideas and voting on the ideas of others. The point structure is a good blend of quality and quantity reinforcement. Users are motivated to share quality ideas to earn votes that are gratifying to the user, but they are also being motivated to vote and comment at high volumes to earn additional points. My Starbucks Idea Leaderboard displays the top 10 users who have generated the most conversation over the previous month. Using points and leaderboards adds a layer of competition to the community and serves as a recognition tool for active participation. Starbucks has also implemented an idea tracker that keeps the users informed on the status of their ideas. Users will see one of four badges: under review, reviewed, in the works and launched. These milestone achievements provide positive reinforcement for the user’s progression towards the larger goal of getting an idea launched. More than 200 000 ideas have been generated on MyStarbucksIdea.com and hundreds of innovations have actually been implemented.

These examples demonstrate that successful gamified solutions meet the three conditions for achieving the flow state and satisfy three human psychological needs (i.e., competence, autonomy, and relatedness). Different levels (e.g., green and gold level in Starbucks Rewards) and rewards (e.g., in-store rewards in the Buffalo Wild Wings’ game) provide a clear set of goals and add direction and structure to the task, which is the first condition for achieving the flow state. By getting points, badges and using progress bar, the gamification systems also meet the second requirement for the flow state, i.e. providing immediate feedback for player’s progress. Finally, most of the gamification tasks are quite easy and do not require any special skills (e.g., buying a coffee or taking a photo), so there is a good balance between the perceived challenges of the activity and one’s own perceived skills. Moreover, badges, levels and rewards provide players with feelings of competence enhancing motivation for playing the game. Participation in the gamified solutions is completely voluntary, which makes the behavior self-determined and provides autonomy. Besides, the gamified experience is highly social as it is either based on community feeling (e.g., voting for each other’s ideas), competition (e.g., leaderboards) or both.

Gamification market is expected to reach USD 11.10 billion by 2020 (http://www.marketsandmarkets.com/PressReleases/gamification.asp). However, not all gamified applications manage to meet their business objectives, and designing an effective gamified solution requires informed application of game design. It is important to remember that you need to use right game elements in a right way to create a unique game experience, which is fun, engaging, and motivating.
References

Hamari, J. (2013). Transforming homo economicus into homo ludens: A field experiment on gamification in a utilitarian peer-to-peer trading service. Electronic Commerce Research and Applications, 12(4), 236-245.

Insley, V., & Nunan, D. (2014). Gamification and the online retail experience. International Journal of Retail & Distribution Management, 42(5), 340-351.

About Natalia Mæhle

Natalia Mæhle is an Associate Professor at the Mohn Centre for Innovation and Regional Development, Western Norway University of Applied Sciences. She has a PhD in Marketing from the Norwegian School of Economics. Dr. Mæhle is an expert in branding, consumer behavior, innovation and digital economy. She has widely published in the highly ranked international research journals and is a regular speaker at the international and national conferences.