Gamification first began making waves in the business community in the early 2010s. For the most part, small businesses have leveraged the strategy to boost effectiveness of employee training, onboarding, and learning management.
Gamification is the use of game mechanics and experience design to digitally engage and motivate people to achieve their goals. Gartner distinguishes gamification from video games and loyalty programs as gamification uses techniques from behavioral science to "nudge" people into achieving their goals.
According to a MarketsandMarkets report, the gamification market size is projected to grow from $9.1 billion in 2020 to $30.7 billion by 2025 at a Compound Annual Growth Rate (CAGR) of 27.4% during the forecast period.
Notably, the report cites that the gamification industry has begun to expand beyond HR. The major factors driving the growth of the gamification market include rewards and recognition of employees in order to boost employee engagement, providing high value incentives to repeat customers, and gamification yielding higher return on investment (ROI).
In this article, we’ll examine three gamification trends and offer some key insights on the short-term and long-term business impacts.
According to Gartner, gamification motivates a target audience—whether that’s your employees or your customers—”to higher and more meaningful levels of engagement. Humans are ‘hard-wired’ to enjoy games and have a natural tendency to interact more deeply in activities that are framed in a game construct.”
Using gamification is a natural strategy for improving customer engagement; however, over the past six years, businesses have mostly focused on improving employee engagement through gamification, neglecting it as a customer engagement strategy. (Google “gamification trends,” and you’ll see what we mean—it becomes clear that the application of gamification has mostly skewed toward HR and learning management.)
However, 2021 will see a shift toward a more customer-centric role for gamification.
Gartner’s Hype Cycle for User Experience, 2020 reports that though interest in gamification peaked in April 2013, the numbers have remained relatively stable over the past two years, with inquiries on gamification having increased 47% over the past year (full content available to Gartner clients).
Gartner also reports an uptick in client interest in using gamification for customer engagement, collaboration, change management, and wellness.
Organizations planning to leverage gamification must clearly understand the goals of the target audience they intend to engage, how those goals align with organizational goals and how success will be measured. Since gamification focuses on providing feedback to help people achieve their own goals, it engages people on an emotional level, rather than on a transactional level.
Gamification strategies are difficult to manage on one’s own. As a result, small businesses that want to use gamification to improve customer engagement will need to rely on prebuilt customer loyalty tools that incorporate gamified design elements, at least for now.
Here are a few examples:
One of the main benefits of using gamification to increase customer engagement is better customer retention. As the Gartner report mentioned above points out, gamification engages at an emotional level (the idea of feeling rewarded for an action) rather than just on a transactional level (purchasing goods or services).
In other words, gamification is more than just game mechanics; it’s a wider concept that taps into behavioral science to motivate a target audience, and it could give your small business a competitive edge among your customers.
If you run a small customer-focused business, you can begin to motivate customers to take certain actions by rewarding them with badges and other incentives for frequent visits to your website, sharing referrals, and purchasing items. One way you can do this now is through a gamified mobile app.
Gamified customer engagement will especially play a critical role in niche markets such as the physical fitness industry.
For example: A fitness and personal training business may try to expand their reach by offering virtual personal training, incorporating a mobile app to improve form, monitor exertion levels, and adjust the number of reps to match the fitness level of the customer. Some examples of fitness apps that are already using gamification to make fitness fun include Zombies, Run! and Superhero Workout.
Customers are further motivated through leaderboards, badge rewards, and friendly competition with other app users. They enjoy this level of personalization and flexibility, making them more likely to continue using the fitness service, thus increasing customer retention.
To understand this trend, let’s look at an example of gamification that has been used in advertising for quite some time: Coca-Cola began using game design elements in 2006 by encouraging customers to collect loyalty points and rewarding them with prizes. This initiative was part of its “My Coke Rewards” program and ultimately retained 20 million lifetime members as a result.
Though this tactic still bears out some success today, many small businesses could face challenges when it comes to engaging a younger demographic. As businesses look to expand their customer base and reach out toward more millennials and Gen Z, they have begun to reimagine loyalty programs that are less transactional and more reliant on interaction and engagement.
An uptick in gamification trends suggests that companies are addressing this challenge by integrating gamification into social media platforms and mobile devices.
Building gamification into your customer engagement program for social media is a great way to foster a loyal customer base by leveraging the natural motivation of gameplay.
Simple features such as achievement badges and social promotional offers will spread awareness of your business and loyalty program quickly and effectively.
At this point, leaderboards have become so synonymous with gamification that regardless of whether a particular software platform focuses on engagement, leaderboards will often be included as a core feature.
As we head into 2021, cloud-based software will increasingly offer mobile apps that also include core gamification features, such as leaderboards, making gamification even more accessible to small businesses.
Look for apps that offer mobile capabilities and that integrate with social media and collaboration platforms, including enterprise social networks, so employees can share rewards and leaderboard statistics for a more interactive, fun, and competitive experience.
For example: An app that already does this is the Nike app, which rewards users with “cheers” every time they share stats related to running, calories burnt, etc. on Facebook. A similar business application could reward customers with badges or points for peer-to-peer recognition.
AR and VR are a natural fit for gamification. AR (e.g., GLASS) and VR (e.g., Oculus Rift) provide rich visual sensory experiences. As we saw above, our brains are “hard-wired” to enjoy games, because of the emotional experiences they provide. So the fully immersive experiences provided by AR and VR, along with the game-design elements of storytelling and game-based learning*, make these new technologies a natural space for gamification.
*There is a distinction between game-based learning and gamification, which businesses that want to leverage this strategy should understand. While gamification adds game-design elements to nongame situations, game-based learning is the use of games to enhance the learning process. Pokemon Go and Clash of Clans are popular examples of game-based learning design.
AR and VR will provide a new platform for small businesses to provide deeply engaging experiences for both employees and customers.
These devices are still relatively new, but if you want to stay ahead of your competition—especially in the retail and eCommerce space—it will become vital that you understand existing applications of this particular technology.
For example: IKEA’s iOS augmented app helps customers plan the placement of furniture on their iPhone in a fun, immersive way. While such enterprise examples may seem out of reach for small retailers at this point, similar small business applications will begin to evolve.
In addition, AR and VR have already been applied in eLearning environments to enhance the learning experience. As these devices become more cost effective for employers, they’ll start to incorporate game-design elements to enhance employee training.
Based on the gamification trends mentioned above, here are some things to keep in mind while implementing game-design elements in your small business:
Have a focused approach to implementing gamification for customers: As a small business, it’s important that you prioritize how you invest your limited resources. Create a planned approach to focus on increasing engagement with customers. If you have a very customer-focused business, opt for gamification software that engages customers with loyalty points, badges, and point-based rewards. These kinds of strategies help you measure the effectiveness of customer engagement through a dashboard based on these elements.
Experiment with gamification elements on different devices: Before you begin implementing gamification, make sure you have an app that customers can install on their mobile devices. Once a gamified app proves to be successful at boosting user engagement, try out other game design elements on AR and VR devices. A gradual approach to implementing gamification on a series of devices will help you save money by weeding out any design flaws.
Don’t overwhelm your customers with a rush of changes: Consumers are overwhelmed by disconnected loyalty programs based on less motivational extrinsic rewards. Take leaderboards as an example, which have evolved to become a standard component of gamification and is applied across industries—education, health, sales, and customer service. Industry analysts have begun to question whether a simple platform for rewards management through leaderboards could be replaced with a more innovative tool designed to align customer engagement with business goals. However, this would require adopting an untested, cutting edge gamification strategy which might overwhelm the users.
Gamification continues to be a strong mode of innovation for customer and employee engagement, since its extensive market adoption in 2010. The trends listed above are just some of the top gamification concepts that will make a business impact in 2020 and beyond.
If you are interested in more information regarding gamification, check out these GetApp resources:
Visit our gamification software directory to view more tools that offer gamified solutions.
Check out our customer engagement software directory to view software that offers tools to engage customers.
Take a look at our employee engagement software directory to view software that offers tools to engage employees.
Note: The applications selected in this article are examples to show a feature in context and are not intended as endorsements or recommendations. They have been obtained from sources believed to be reliable at the time of publication.