Though William Shakespeare once wrote that all the world’s a stage, the online world is now evolving into a series of games instead. Gamification, the integration of game design concepts into non-game scenarios, is growing increasingly popular in the business world. Though still an experimental business strategy, gamification is expected to be used by 70% of the world’s 2000 largest companies in some form by 2014 and generate $2.8 billion in consumer spending by 2016.
If you’ve ever racked up frequent flyer miles, checked the reward points on your credit card, or become the mayor of a local restaurant on FourSquare, you’ve already participated in a basic form of gamification. But companies are finding new ways to introduce game elements that will change how we shop and how we work.
“Games have been around as long as human civilization has been around. They tap into some very deep and fundamental aspects of our psychology,” says Kevin Werbach, author of the gamification book For the Win. “If you can build something using that structure [of games], with feedback and an ability to progress toward mastery, it has a very powerful resonance for people.”
Many big-name companies have already gotten into the game, as it were. Last year Coca-Cola launched a “Happiness Quest” through its vending machines in Japan. People can use their smartphones to scan a QR code on the machines, which will then create a virtual vending machine avatar. Players can then earn points to customize their vending-machine character by scanning more Coke machines. They can also earn badges by finding machines on holidays or at lunch time.
Smaller companies are also gamifying. Sneakpeeq, a discount online retailer that specializes in boutique items, has built its entire user interface around gamification by partnering with Badgeville, a company that provides game mechanics tools to businesses. Users earn points on the site by flipping over a virtual price tag to “peeq” at the deal the website is offering on a product. Gain more points to move up the leaderboard, where the top users are rewarded with deeper discounts. Users can also earn badges for making multiple peeqs or buying a certain number of items in a month. Some of the badges lead to further deals while others are just for virtual bragging rights. Just casually browsing the site leads users to quickly start accumulating points and badges, which Sneakpeeq’s developers hope will entice users to return.
“We realize that our site is not an Amazon,” says Neil Gandhi, Sneakpeeq’s senior software engineer. “You go to Amazon because you know what you want to buy. On our site, what we’re trying to encourage is for you to increase discovery and increase the type of products that you look at.”
The site not only tracks sales but also “engagements” — meaning, in this case, how often people share,” peeq,” or buy a product. Since implementing a gamification interface in November 2011, sneakpeeq’s engagements have grown from five per minute to 45 per minute. Sales have also increased dramatically, and Ghandi says the company projects sales of $30 million next year.
While Sneakpeeq is using gamification to lure customers, others are using games to engage employees. The IT company CA Technologies boasts a “CA Champions” game where employees and customers can earn points and badges by participating in the company’s social network. Writing blog posts, helping peers troubleshoot, and uploading user-generated content all earns points. Users can level up from a lowly Member to a VIP, a Hero, and finally a Legend. A monthly Wall of Champions celebrates all the users that reach a high rank. The company says engagement on the site has doubled since they added the points system in June.
“It’s human nature to want to be recognized for your talents, and I think we’ve created a platform that allows for that,” says Michelle Accardi, CA Technologies’ vice president for Internet marketing. “Things don’t necessarily have to cost a lot of money to be of value to people. That’s really about knowing who your user is.”
Werbach agrees, pointing out that gamification strategies don’t have to involve tangible rewards to be effective. “One of the important lessons out of the psychology research is that people are not just motivated by tangible rewards. There’s some situations where the motivation comes from the sheer fun of the challenge rather than something specific being at the end.”
For now, the gamified arena remains a relatively small one, with some believing that badges, points, and quests can have little real-world impact. But Werbach points out that a few years ago, social media platforms too had their doubters in the business world. “It’s easy to dismiss it as just something trivial and silly,” he says, “but if you understand it more deeply as leveraging motivation to achieve certain goals, it has all sorts of very legitimate business applications.”