The psychological game changer

Gamification has amassed many definitions over the years. Yet, Kris Duggan, CEO of gamification company Badgeville, broke down the psychological aspects behind gamification and shared how it can drive customer and employee engagement.

“The traditional, literal example [of gamification] is the application of gaming techniques to non-gaming activities, but that doesn’t really tell you much,” Duggan said before the Badgeville Engagement event in New York. “I think of it as the intersection of psychology with technology. How do you really understand what motivates people? How do you use that in your marketing strategies or business strategies to achieve your business objectives?”

Because marketers are dealing with customers’ psyche and behaviors, they have to strategically plan how they’re going to define customer engagement (such as by writing product reviews or shopping activities) and how they’re going to reward desired behaviors, Duggan said.

“You can’t just throw some achievements out there and expect that everyone’s going to start being engaged,” he said. “You have to tap into different things that are going to motivate people. Sometimes having friendly competition is a way to do that. Sometimes having competition actually demotivates people.”

Duggan cited Foursquare’s popularity slump as an example of how gamification gone wrong led to “unintended consequences.”

“I think one of the failures of Foursquare is that there can only be one mayor. That was good early on when there was nobody using it, and the really early adapters wanted to be the mayor of their local Starbucks,” Duggan said. “Now, maybe there are five people at Starbucks who actually care about being the mayor. What about the other 5,000 customers that aren’t getting any kind of reward?”

Despite the Foursquare flop, Duggan said that implementing gamification into a social community is a smart and strategic maneuver.

“If you add gamification to a community-type experience, it’s probably the most powerful thing you can do,” Duggan said. “If I give you a reward for doing something, there’s a good chance that you’ll do it, but if you get to show that reward, or expertise, or status in front of a whole group of people, it becomes very motivating.”

Duggan said gamification allows marketers to better understand and segment their audience, which can encourage a deeper level of engagement. “If you’re a marketer today, do you even know who your low-engaged users are? Your medium-engaged users and your highly engaged users?” Duggan asked. “And then the question is do your users know that they’re either low, medium, or high, and do they know how to engage more deeply?”

In fact, Duggan claimed that companies using Badgeville’s Behavior Platform—a software service that adds gamification onto companies’ already established platforms—have seen about a 20 to 200% increase in desired behavior.

Yet, customers aren’t the only people marketers should strive to engage. Employees are another group who are ideal for the approach. Duggan referenced a 2011 Gallup study that claimed that approximately 70% of Americans were either “not engaged” or “actively disengaged” at work. Duggan predicted that marketers, particularly CMOs, will soon be delegated the task of creating engagement strategies across a company and that new positions, such as engagement manager, may arise.

Whether applied to customers or employees, gamification works best when implemented as a long-term program rather than a short-term project, said Duggan. “You can use gamification for a campaign, but it’s better to think of it as a longer-term investment,” he said. “You’ve never heard of a loyalty project. They call them loyalty programs because they’re ongoing.”

Nevertheless, Duggan said marketers need to keep the customers’ motives in mind.

“It’s really about taking these different kinds of game mechanics, and social mechanics, and different types of techniques to drive user behavior,” Duggan said. “You can apply gamification to anything, but you have to be thoughtful about how you’re going to do it. You have to connect with your audience, and think through what the right kinds of behaviors and then what’s in it for them?”

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