A fully engaged customer represents an average 23% premium in terms of profitability while actively disengaged customers represent a 13% discount. Customer engagement strategies that incorporate gamification address both acquisition and retention.
Gamification is about applying game-like mechanisms to a non-game context, to encourage certain behaviors. Gamification does not necessarily mean building the user journey around a game.
A gamified user journey supports business goals by leveraging game mechanisms to influence desired behaviors. By rewarding behaviors that have the biggest impact on business goals, those behaviors are converted into habits over time, resulting in sustainable engagement.
There are two kinds of motivation which can drive action: extrinsic and intrinsic motivation. Extrinsic motivations arise from an external reward, such as points, milestones, achievements or awards granted when a desired action is completed. Extrinsic motivators work well initially, but the focus of the user soon shifts from the action to the achievement. The motivation to undertake the action then reduces.
Intrinsic motivations are internal rewards. They include being in control, discovering and mastering new skills, associating and relating to other people, feeling accomplishment, empowerment. They arise from the nature of the action itself, and are therefore more sustainable.
Selecting gamification strategies
When setting up gamification strategies, first decide what your objective is and what action you want to encourage. Design a strategy with gamified solutions that specifically target those actions. Once the solutions are in place, you can track and analyze the results before scaling.
For example, if your target is to increase the retention rate on an application after free trial, you want to encourage certain actions, such as:
- Time spent on app
- Engagement on app
- Engagement on social media
- Signup after trial
Identify gamification strategies for each such action. This could be cashback to wallet for later purchase, loyalty points, competitions and contests. It could also be something unique, such
Assign a KPI for each action. Carry out A/B testing if possible.
Studying successful examples of gamification in customer engagement
- Moosejaw, a clothing company, gamified e-commerce to increase sales revenue by 76%. With wacky marketing and a strong, tongue-in-cheek social media presence, Moosejaw made a unique decision – they pegged costing based on demand instead of a flat rate. As engagement increased, so did demand – and so did prices! The campaign resulted in 560% ROI from initial marketing expenses and 240K social media impressions. Read more here.
- The Nike Run Club app includes elements of gamification to increase user motivation, user engagement and retention, by providing GPS tracking, guided workouts, custom coaching plans, a running log and the ability to take part in challenges with friends. The app includes all sorts of gaming reward mechanisms such as progress bars, rewards and streaks. Read more here.
- By taking one simple step towards gamification – implementing a leaderboard – OpenText, a company operating in Enterprise Information Management got a 250% increase in business usage and adoption. Read more here.
Gamification increases social sharing and word of mouth promotion. The chances of a user sharing that they have won a lottery within an app is much higher than that of sharing that they’ve received a cashback, even if both amount to the same thing from the company’s perspective!
By using the right gamification strategy, you can increase user acquisition, drive loyalty and engender customer delight. Our experts at Hornbill FX are experienced with creating gamification strategies and solutions that work to meet your customer engagement requirements. Game-based applications, customer journeys and interactions are a great way to improve customer experience. Contact us today to get started on creating your gamification strategy.