Adding Gamification to Your Business

Whatever your business or team may look like, you can apply the principles of gamification to keep your customers engaged, and to build a habit-forming product. Every team in your company can be involved in an effective gamification strategy – be it product, design, tech, marketing, or social media.

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You can introduce gamification to any product or service workflow to enhance a desirable outcome. This could be anything from reducing Customer Acquisition Costs (CAC) to increasing the amount of time a user spends on your website. How you gamify often changes based on what your business objectives are. Your gamification strategy should be closely tied with the product DNA. It will help you achieve your business objectives at a minimal cost. With gamification, you’re able to significantly lower your costs and increase your ROI. For example, a refer-and-earn programme will lower your CAC but gets you a large volume of new customers.

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So, where do you begin?

Identify Your Goals

Start by knowing what you want to achieve before incorporating gamification into your business. Are you designing it for acquisitions (for example, Google Pay) or time spent on your app (for example, Instagram)? Once you’ve defined these objectives, narrow down on the action you want your consumer to take. This action should be tied to a habit that you want them to form. Double tapping on Instagram or swiping left or right on Tinder – it's such simple actions that become habits! The trick to successfully gamifying an experience is to latch onto behaviour that comes naturally to people. You want to design your experience around those habits such that your customer forms an associated habit around your product.

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Anything can be gamified. This is all the more reason for you to be careful about being very specific about your objectives. Your objectives will also impact the way you measure the efficacy of your gamification campaigns. Are they being met? If not, you need to go back and rethink whether you’re working with gamification in the right way.

The Lure of Rewards

For today’s generation, rewards have to be instantaneous and variable. People don’t want to wait. They want variety and love surprises.

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“The rewards have to be varied, but relevant.”

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So if you’re a food delivery app, your reward shouldn’t be in the life insurance sector unless there’s some overlap. Let’s say you’re an airline that’s giving out free dinners in Paris to customers who are booking tickets to France, that makes sense. Find a strong link between what you’re selling and the reward you’re offering your customers. Scratchcards with a variety of different rewards are an idea to consider.

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If you are on Instagram, Snapchat or Whatsapp, the story option is actually a form of a reward. You keep scrolling to check for new updates. What does it do? The simple action of a scroll down gives you a refreshed feed with new pictures, which triggers a dopamine release in your brain. That is what the reward is. This is what Instagram has been developed around. You feel a sense of reward by looking at what someone is doing, how many likes your picture got, or how many people have viewed your stories. People are slowly moving away from Facebook to Instagram because of the dopamine secretion, which gives a sense of gratification, and it's stronger on Instagram. The action is also simple and uncomplicated. You are just tapping, or double tapping. Easy and habit-forming!

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That is the power of variable rewards. Accessing new information is a type of reward as well. This is why people follow election results, or invest in the stock market. They feel rewarded by the unpredictability, and by constantly receiving updates or new information.

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Why do you think people go on LinkedIn to share their knowledge more so today than five years ago? People are now using hashtags to share their posts. They want their networks to know what they believe in, and the moves they’re making. They also want to have more connections, and have more people following them. This is a form of a reward as well!

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Let’s say you have a preview of a sale only for customers who have signed up to be members, people who are shopping are more likely thus to sign up. Now, if you gave them a cashback offer along with the sale preview, the effectiveness of the membership increases. More gamification is better! Studies show that putting together different gamification elements result in the product being more addictive to the customer.

In its early stages, gamification was limited to the PLB (Points, Leaderboards, and Badges) model. It is the most primitive form of gamification, and there’s so much more that can be done. Think about it: if I give you a business class upgrade in an airline, that is a level up, without necessarily using “levels” or similarly, a preview to a sale. We’ve moved beyond PLB.

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Now, there are several nuanced gamification models out there to choose from. I would recommend ‘Hooked’ by Nir Eyal and ‘Octalysis’ by Yu Kai Chou. When you put these two models together, you’ll find that they cover a comprehensive range of business and product scenarios.

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Most gamification frameworks out there have been derived from Hooked and Octalysis. There are four stages in which you can incorporate game mechanics into a product: discovery, onboarding, scaffolding and endgame.

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Discovery is how you find out about the product - it’s a trigger. It’s the first phase of the game. The second phase is Onboarding, and this is an important consideration when you’re designing a product. You want to make sure that the onboarding process is as smooth and as glitch-free as possible. For example, allowing someone to easily set up an account with you by using their Google or Facebook login. Scaffolding is the third phase, which is when you get your user to engage further and discover new areas of the business or app. For example, Netflix will tell you about a new TV show that was just added, or Zara guides you to a new section when you walk into a store. How do you incentivise your user to come back for more each time without dropping out? Endgame is the phase that is designed to keep people hooked.

Hooked: Four Stages of Behaviour

The Hooked model outlines four stages of human behaviour: trigger, action, reward, and investment. In any business, you want your consumer or customer to perform a certain action. That could be signing in, watching a movie, ordering a book or pizza, or booking a salon appointment. There’s some commerce that’s unfolding – a transaction. In order to get your customer to perform the action, they’ll need an internal or external trigger to do so.

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Let’s say you want to order takeout in the evening. You pick up your phone and order a pizza. This is an example of an internal trigger: you’re hungry. When you’re ordering groceries online on a Saturday morning, that’s an internal trigger too, since you’re running low on supplies. Now, if you walk into your office on a Monday morning and you ask your colleague “how was your weekend?”, and they tell you about a movie they watched or a cool new restaurant they checked out. That’s an external trigger. Someone else is giving you information that will make you want to book a movie ticket or make a reservation at that restaurant. Every action your consumer takes is motivated by either an internal or an external trigger.

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Now, if an action is performed, there’s always an outcome. This outcome turns into a reward. If you want to place an order, but for some reason the service fails and you don’t confirm the order, then the outcome is that you have abandoned your cart. It’s not a favourable outcome. Would you go back, fill your cart with the items you wanted all over again, and proceed to check out? What are the rewards for doing this? Maybe you’re ordering something you won’t get anywhere else, or something you really don’t want to miss out on. Ask yourself, for any product or service you’re providing, what is the reward that your customer is looking for? People make investments that will affect your business – to download an app, or sign up for loyalty programmes – based on rewards.

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Say you sign up for travel insurance when you’re planning a trip. You’re making an investment because you believe that the rewards will be valuable to you. This is essentially what the Hooked process is. You start with a trigger that leads to action, which provides a reward and it gets you to make an investment.

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The second phase of this is to build your product in such a way that external triggers become associated with internal triggers. This is what a habit-forming product is. Over a period of time, the external triggers you provide activate internal triggers in your customer. This means that with time, you won’t really need to send a push notification or an SMS. For example, you know that if you want to get a taxi, you’d probably book a Grab because of your experience with them.

Octalysis: Eight Core Drives

This model suggests that every action you take is motivated by one or more of the eight core drives of human psychology: Meaning, Accomplishment, Empowerment, Ownership, Scarcity, Avoidance, Unpredictability, and Social Influence.

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Let’s take the example of “beginner's luck”. Let’s say you go to the casino at Marina Bay Sands for the first time and you win. You feel great because you’ve fulfilled your core drive of Empowerment. People who work for NGOs feel that their work gives them a sense of Meaning.

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What about social influence? Kylie Jenner was already a millionaire when she took to social media to ask people to fund her so that she’d be the youngest billionaire single mother. You'll be surprised that people actually funded her, then went on social media to brag about it. That’s Social Influence in action.

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Think about why Game of Thrones is such a success. It’s because the show plays with people’s desire for Unpredictability. Every time you are given a raffle ticket card, or a scratch and win, for example - the chances are, you will use it. Look at what Google Pay did. When you made your first payment with them, you got a scratch card. That’s what made them stand out from all the other wallets out there in the market. The element of getting a scratch card and not knowing what you’d get was what kept users coming back for more.

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In the Hooked model, the emphasis is on rewards. But you can use the Unpredictability to keep your rewards from going stale. Imagine you get the same meal every day. Compare that to a service that says you get one meal every day but you won’t know what it will be. The latter option is more enticing.

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Then there’s Avoidance, which is essentially FOMO (fear of missing out). Car insurance thrives on FOMO. You continue paying for it because you don’t want to lose out on the sunk cost of the premium. When you’re on Tripadvisor and they tell you that you’re two reviews away from attaining a certain level or rank, you are incentivised to write a review so you won’t miss out. In this case, TripAdvisor is leveraging on Avoidance to get you to act.

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Have you ever been on a website that tells you to book your tickets because there are only 10 left? Or maybe they tell you 11 others are looking at the same item. This is Scarcity. Whether these numbers are entirely accurate is up for debate. However, the element of Scarcity will influence your decision-making process. Flash sales are designed to make people act on Scarcity. You have two hours left to buy this pair of shoes at a discounted rate. What do you do? In most cases, you’d jump on the offer and make a purchase.

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Ownership is a core drive that works in tandem with Avoidance, but with a bit of a twist. It’s something you take pride in owning. Think about virtual goods that you’ve collected (or “earned”) over time such as tiers, miles, or avatars. These are great examples of Ownership. Some of the most popular games such as Candy Crush and Temple Run were built on the sense of Ownership. People actually wanted to talk about the stages they crossed.

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Moving on to Accomplishment. LinkedIn uses this core drive to get you to complete your profile. It shows you the progress of your profile – you’re 50% complete. At some point, they’ll flip it around and tell you that you’re 10% away from an all-star profile. In this case, they first use Accomplishment and Ownership, and then flip that to leverage on Avoidance and Social Influence. You’ll find that a lot of businesses that involve filling long forms (such as job portals), measure your progress. The moment you're close to your goal, they get you to the finish line using Avoidance.

Product Strategy

Your gamification strategy should be tied with your product strategy. Successful gamification strategies are rooted in the product funnel. Incorporate gamification across your customer’s product journey, from entry point to post-product engagement via emails and notifications.

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What Separates a Good Gamification Strategy From an Excellent One

Simplistically speaking, a good gamification strategy gives you an above average engagement say, 2-3x engagement on a particular feature whereas an excellent one would give you a 10x jump across the entire product work-flow. Impacting Customer Lifetime Value positively, and exploring all aspects of your product.

1. Write Down What You Want to Achieve

Don’t gamify for the sake of gamifying. Start with understanding what you want to achieve by incorporating gamification into your business. This will help you design a more effective gamification strategy.

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2. Think Beyond Points, Leaderboards, and Badges

This is one of the easiest ways of applying gamification to your business, but there’s so much more to be discovered. Look through the various aspects of the above models and find a few potential ideas that are best suited to your business goals.

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3. Understand the Four Stages

Start by mapping your user’s journey from trigger, to action, to reward, and to investment. Think about how you can slot your product into each stage, and develop your gamification strategy from there.