Gamification: Building Loyalty to Build Profits

(Published in The Express Tribune, May 23, 2011)

The newly touted strategy of Gamification has been dubbed a passing fad by some while other players are banking on the idea in every way possible.

The idea of gamification is nothing new. In its most basic form, it encourages consumers to climb levels of loyalty–for example comic book collectors or star wars fans who need to have every memorabilia. Or frequent flyers who unlock new privileges by increasing their travel.

With gamification, the same strategies find renewed focus. For example Facebook shows a user’s friend count on their profile and Twitter shows the number of followers. Both these figures serve as a metric of social prowess and influence. Avid users will often use these simple metrics to compare themselves to other peers or to measure their growth over time.

While traditional schemes have focused on loyalty points and rewards, gamification encourages scores, levels, badges and differentiates the achievements. The idea is still new enough that it has not found greater mainstream application but there are now cropping up online communities that assign specific badges to user profiles for logging in 30 days in a row, staying an active participant for a year, leaving a certain number of comments or participating in enough discussions.

Other more subtle applications of gamification are employed by professional networking sites such as LinkedIn which show a percentage meter to indicate how much of the user profile is complete. Typically users feel rewarded when they see the meter read 100% and thus they may complete their full profile including career history, education and other professional information.

Other great applications of gamification may yet come within the mobile phone sector which already employs complex marketing schemes. The simplest of such strategies could just provide consumers with key indicators such as the number of words sent via SMS in any given month–an idea that could encourage teenagers to one-up each other. The mobile carrier Orange in UK encourages consumers to make more calls by using a daily tiered pricing model. The first 20 minutes of daily conversation may by charged at a higher rate while the next 20 minutes may be charged at a lower rate and so on. This encourages users to unlock new discount levels. The same rates may even be spread out over weeks or months.

Gamification relies on providing rapid feedback to users as they surpass new levels of achievement. Within the online social space, the same indicators are put up on the user profile pages as a billboard of achievements, and the same may yet happen as mobile applications are becoming increasing social.