Pando

This is not a game: Why gamification is becoming a multi-billion dollar way to motivate people

By Rajat Paharia , written on November 19, 2013

From The News Desk

Is gamification the same as games? No, but I understand why people think so.  When you interact with a gamified experience, you see things like badges, points, levels, missions and leaderboards. You’re awarded trophies for completing certain tasks, and you might even amass enough points to earn an iPad or some other object of desire.

Certainly seems game-like, doesn’t it?

But gamification is serious business.  Look at predictions from Gartner, which anticipate more than 70 percent of Global 2000 enterprises will gamify at least one application by 2015. Meanwhile, M2Research predicts the market for gamification solutions will grow more than 11x – from $242 million to $2.8 billion – over the next four years. (See infographic).

Surprised? You wouldn’t be if you knew how gamification and games are different, because, well, that’s where those billions of dollars come into play.

Gamification, as the name implies, evolved out of the world of video games, where they have mastered the art of data-driven motivation. Think about it – from the days of Pong in the 70s to Call of Duty and World of Warcraft now, video game designers have lived in a world rich with data on user activity – they know every move you make, and every breath you take. And over the last 40 years they’ve honed and refined the techniques for using that data to motivate better performance in their games.

Gamification uses many of these same data-driven methodologies. But in the gamification world, these methodologies motivate users to achieve outcomes that are meaningful to businesses – to work smarter, perhaps, or to contribute more frequently, learn more, tweet or share in ways that support a brand, or make the company’s new enterprise platform part of the daily workflow.  And unlike video games, gamified environments aren’t created from scratch, they’re added to customer communities, branding campaigns, CRM platforms – any existing environment in need of a more motivated audience.

All of this boils down to engagement, a vital and infuriatingly elusive goal in a world where loyalty is eroding, where wired-in consumers always have access to the next best deal, and where digitally connected employees are distracted and disengaged from their work. And as more companies are learning, engagement is everything. In fact, organizations that are successful in engaging customers and employees see a 240 percent increase in performance-related outcomes according to a recent Gallup Poll.  And that means increased sales, improved customer loyalty, and a high-performing organization. This is why gamification is growing.

Where big data and motivational science meet

Well-designed gamification environments work because they make use of two developments that have converged at precisely the right moment: big data and motivational science.

Big data has been the catch phrase of the past two years - but what some may not realize is that because everything we do is in some way mediated by technology, we have all become walking data generators. Applications, social networks and websites constantly throw off data whenever we use them. Taken as a whole, that data shows conclusively what interests and motivates us. Companies like Facebook, Amazon and Netflix already understand this and they make use of it constantly. They know what you want sometimes before you know yourself. Those three companies aren’t alone – a recent survey by CSO Insights and Lattice Engines found 71 percent of companies understand the importance of big data, but only 16 percent are taking advantage of it. Gamification presents an opportunity to harness that growing stream of information in ways that drive business results.

Big data is a crucial ingredient in the secret sauce of gamification, but we need something else. And that something is motivational science.

Recent behavioral studies reveal that a core set of intrinsic and powerful motivators exists in all of us: the desire for autonomy (to direct our own lives), for mastery (to improve), for purpose (to make a difference), for progress (to achieve), and for social interaction (to connect with others). These motivators are ever present and they can always be stimulated by the right experience – especially an experience that’s customized to a particular person’s interests and activities. And that’s where big data fits in.

Shaped by big data culled from the platforms employees, customers and partners use every day, successful gamification experiences use motivational techniques – like goal-setting, real-time feedback, competition, virtual rewards, and leveling up – to keep users participating, progressing, collaborating and achieving.

It’s ironic, really: While today’s technologies are eroding loyalty and engagement, businesses can use many of these technologies to reclaim the loyalty they’ve lost. They’re finding that big data and motivational science combine to create a kind of “cold fusion” for loyalty – one that generates an endless supply of motivation. With gamification, they channel that motivation in ways that drive their business performance.

I call this concept Loyalty 3.0, and every day, more organizations are discovering how to marshal these principles. Let’s look at a couple of examples.

One day, $1 million in profit

I recently sat down with one Fortune 2000 company that was looking for a new way to familiarize its worldwide sales team with its online price book – a massive, complex matrix that’s updated annually. Year after year, the company’s salespeople gathered for a grueling day of intensive training to try and master this thing. But there were serious problems with that training model. For one thing, the company had to train 250 new employees who just joined the sales team after a merger. They’d never even seen the price book before, so they had a steep curve to climb. And because these salespeople all work on commission, getting them to carve out time for training required a special kind of motivation.

The solution was to gamify the experience of learning the price book.  A series of challenges motivated sales team members to progressively understand and master the optimal use of this vital, if not always intuitive, sales tool.

And did they ever learn it.  They became so proficient that the company recognized an additional profit of $1 million in just one day.

At this point, I have to fight the urge to get all Dr. Evil on this – you know, stroke a white cat, conjure a vaguely European accent and say, “One million dollars.” But it turns out with this story, I’d need a lot more cats.

That’s because as a result of gamifying the learning experience, this global company ended up creating all kinds of experts at using something that previously had flummoxed so many. As the weeks went on, and as salespeople became more knowledgeable, the bottom line just kept improving. And within two months, the company recognized an additional $8 million in profit.

Motivating a workforce of 20,000

You may have heard of LiveOps, a leader in the contact center industry with an intriguing crowd-sourced business model. The company employs 20,000 independent agents who represent some of the world’s leading brands, including Symantec, AAA and Royal Mail Group. Agents work from home and have total control over their schedules – they don’t even have managers. And every week, they bid against one another for work.

As I say, it’s an intriguing model.

Despite this built-in competition, agents know that they collectively benefit when satisfied clients keep returning and there’s more work for everyone. LiveOps knows this too. So the company gamified its My Work Community agent portal. A series of missions enable agents to earn points when they hit performance goals and onboarding milestones, when they interact with fellow community members and when they earn key certifications. Because the company’s goal was to create an environment in which the most active agents could establish reputations as experts and mentors, agents earned points not just for their job performance, but also for collaborating with other agents.

LiveOps monitored an array of big data, such as user activity, call times and service levels, and then used it to create an environment designed to motivate agents toward specific behaviors.   The results are impressive:

  • Certification courses that enhance the expertise of agents are completely optional and voluntary, yet 72 percent of agents have earned new certifications.
  • The average time required to onboard agents to a new client dropped dramatically – from four weeks of classroom training to 14 hours.
  • Service levels improved by about 10 percent.
  • Average inquiry handling times shrank by almost 15 percent.
  • Sales performance improved by 8 to 12 percent.
Every company’s story is different, of course. Consumer packaged goods companies, for instance, frequently focus their gamification efforts on web and social media engagement as they work to build brand loyalty with key demographics. Software companies often use gamification to convert trial users to paying customers. Companies of all types rely on gamification to accelerate adoption of crucial enterprise applications like Salesforce – which, it turns out, can be enhanced with a gamification module built expressly for that purpose. Yet no matter the differences, I’ve found that when they apply Loyalty 3.0 principles – built around big data, motivational science and gamification – they tend to engage people in ways that they never thought possible.

These companies understand that gamification isn’t a game. Because believe me, they’re not playing around.

Bunchball_Loyalty30FINAL

[Illustration by Photon Storm]