August 10, 2011
By Guy Krief
Gamification (or “Game mex”) in marketing has become a popular buzzword in the last two years, but the practice of using game-like mechanics in marketing programs has been around for a long time.
American Airlines’ AAdvantage® loyalty program and McDonald’s Monopoly promotional game are just two of many well-known, longstanding examples of gamification.
Scoring points
Gamification is the use of game-like mechanics and dynamics in a non-game environment such as marketing to increase consumer engagement and/or influence consumer behavior.
Game-like mechanics typically include items such as points, countdowns, bonuses, and escalating levels that are informed by game-like dynamics such as rewards, urgency, pride, competition, and status-building. These socio-psychological principles drive the use and calibration of game-like activities.
One basic rule of thumb is that consumers should be rewarded with virtual items (e.g., points) for specific behavior (e.g., purchase), and those virtual items should offer access to exclusive privileges and rewards, such as levels or prizes.
As with any game, this interaction can be viewed as a simple set of rules and conditions that define the underlying marketing objectives of a program, such as:
- Increase in the frequency of purchase
- Boost the value per purchase
- Encourage usage of a new sales channel
- Drive new product/service adoption
- Perform consumer profiling
- Conduct new customer acquisition
- Obtain feedback
- Upsell/cross-sell
If an increase in the frequency of purchase is the marketing objective, consumers could be encouraged to purchase more often through an attractive non-linear reward/purchase frequency.
For example, if each purchase corresponds to 10 points, a second purchase within a given week could correspond to 20 additional points (versus a linear-based 10 points).
While a gamified experience has to be interactive, fun and enjoyable, its success is measured through conversion rates (how many consumers engaged) and participation rates (how much/often).
If properly designed, high conversion and participation rates should lead to a desired consumer behavior change.
Beyond the initial act of purchase itself, such a high level of consumer interaction holds great potential both for brands and consumers. But it also presents some challenges that include but are not limited to the following:
- Proper set-up of the program that is aligned to the marketing objectives and in sync with the different consumer segments
- Clear communication of the program, and its rules and potential benefits to the consumers
- Convenient channels of interaction between consumer and brand
- Adequate consumer profiling to ensure relevance
Why mobile works for gamification
Initially, the mobile phone was perceived as a revolutionary interaction channel for gamified marketing promotions.
Consumers could easily participate in on-pack marketing promotions by simply texting a printed code to a short code to get back their points and/or rewards.
For example, consumers would buy a can of Coca-Cola and register their on-pack code via SMS to enter a sweepstakes or win an instant prize.
The convenience of SMS versus physically mailing the code was so high that the use of mobile immediately resulted in a dramatic increase in redemption rates.
When considering the role of mobile in gamification, one should consider four inherent characteristics of the medium:
- The personal, intimate nature of a mobile device translates into higher potential impact/cut through
- It is a time-sensitive device
- Instant, easy interaction makes direct response much easier
- Interactions can be tracked, leading to much greater accuracy in measurement
Time is the added spice to gamification
The element of time (e.g., countdowns, appointments, urgency, delay and limited time challenges) is a major dimension of game-like mechanics and dynamics.
From hide-and-seek to Tetris or Farmville, time is the added ingredient, the “spice” that makes successful games so engaging and rewarding.
Because consumers always carry their mobile device with them and it instantly activates on the network, mobile is the only marketing channel that enables a time component to be fully integrated in the gamification experience.
As a result, use of time-based mechanics becomes a central part of the challenges that consumers receive.
For example, a specific number of points can give consumers the right to take part in a short quiz for the chance to win a prize.
Time-sensitive communications provide marketers with the capability to define when an interaction should take place, such as right after or before a purchase, or at a time of day known for high interactivity.
For example, in a prepaid promotion where mobile consumers are rewarded with a specific amount of points per credit recharged, consumers who are about to purchase a recharge card at the beginning of the month can be targeted with a specific message informing them that – for a recharge of at least $10 – they will be rewarded with double points and a chance to win a prize.
This time-sensitive communication is critical to sparking an impulse decision to accept the offer.
Complexity and real-time engagement
The gamification experience holds a high level of complexity as it results from a combination of key settings: what types of mechanics to use; set-up of each mechanic (e.g., challenge, time and content); the order of progression; which rewards; at which frequency; and when.
For example, in a carrier mobile data promotion where every MB downloaded is rewarded with points, after having reached a certain level in the game, consumers can be offered a chance to win a special gift by downloading an extra 20MB until the end of the day.
This offer could be modified to downloading an extra 10MB within the next hour. Or, it could be an extra 40MB until the next day.
In short, the challenge and its deadlines can and must be optimized for different consumers.
There are two ways to address such complexity and ensure optimal results:
- Use past data to properly map the scope of possibilities and only deploy the best-performing set-ups
- Perform automated real-time optimization by systematically registering and analyzing all consumer interactions as they happen. This level of complexity rules out any possibility of manually managing this process.
Automated, real-time optimization of the gamification experience set-up is possible via mobile where all consumer interactions are measured.
This measurement allows the real-time optimization of the gamification experience per consumer segment. The segmentation is essential as the optimal combination of settings significantly differs from one consumer segment to another.
In the previous example of a mobile data promotion where consumers can win a special prize by downloading an extra 20MB by the end of the day, whether the incentive is a free week of astrology or free week of sports scores could make a huge difference depending on who receives the offer.
In other words, the reward – like all the other key components – must be optimized per consumer segment.
This automated real-time optimization has two other benefits:
- The proper set-up of rewards can enable efficient upselling/cross-selling. If a consumer prefers sports questions, offer one free week of live sports scores, then upsell the live sports scores service.
- The proper set-up of challenges can allow for unprecedented, in-depth mobile consumer profiling (e.g. identifying that a consumer prefers music questions, engages in challenges with mobile content rewards).
AS GAMIFICATION over mobile moves from buzz to reality, the market winners ultimately will be determined by the companies that fully understand the personal nature of consumers’ mobile devices, roll out time-sensitive game-like techniques that promote easy interaction, address the complexities of delivering a targeted gamification experience in real time, and segment their consumer audience to drive maximum engagement and conversion rates.
Guy Krief is vice president of innovation at Upstream, Athens, Greece. Reach him at krief@upstreamsystems.com.
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