Although gamification, or the incorporation of gaming aspects into non-gaming activities, has been popular for several years now, many people might be surprised to learn the enormous impact it can have on a company’s revenue.
For example, in 2019, Starbucks reported that its earnings jump – from $4.6 billion of the same quarter the previous year to $6.31 billion – was due in large part to its Starbucks Rewards app. In fact, its sixteen million Rewards members accounted for 40% of its US sales. While most companies probably won’t see this kind of return on their investment (Starbucks is the gold standard for successful gamification), with the right platform there is certainly potential for unprecedented growth.
Why does it work?
The surface answer, of course, is that the platform rewards the consumer for making purchases or engaging in activities related to the company’s product or service. The true appeal, however, goes much farther than addressing a particular pain point. Gamification gives us a small mental break from the business of life, whether it’s online banking or something far less serious, like ordering our favorite coffee, and clearly this is something we’re happy to invest in.
Gamification on Nike+
That said, to harness the true power of gamification, a company must adopt a platform in alignment with its brand and mission. Nike is a longstanding excellent example of communicating what they’re about, from their famous “Swoosh” logo, which is worth an estimated twenty-six billion dollars, to their “Just do it” slogan that has been inspiring athletes of all fitness levels since 1988 and is still going strong today. So it’s not surprising that the company was ahead of the curve when it came to implementing gamification into its business model. Realizing that a major hurdle to working out is a lack of motivation, in 2006 they created Nike+, a platform that not only tracks speed, distance, and time but makes it sharable over social media so user can be part of a running community. The best runners are rewarded with their names on a leaderboard, inviting kudos and sparking healthy competition. It is the digital equivalent of having cheerleaders standing on the sidelines while you sprint toward the finish line.
Gamification of Headspace
A similar but even more fascinating example is Headspace, which according to The New York Times is still the best meditation app (this, by the way, is out of 2,500 such apps out there). Like Nike and language learning giant Duolingo, Headspace recognizes the challenges inherent in acquiring a particular skill and uses a combination of “carrots and sticks” to keep users motivated to return. The carrots include almost immediate gratification (i.e. a meditation that can be completed in under five minutes and praise for that completion) and the ability to connect with other bliss seekers all over the world. The sticks include those same people seeing that your ranking has dropped because of a lack of participation, as well as the reminders every time you are on the verge of breaking a “streak.” Both trigger “avoidance” behaviors and the likelihood that you will make room in your packed schedule to meditate, take that next French lesson, go running on a day when you’re tired, and so on.
Gamification for M&Ms
Other companies use platforms targeted to their own mission and oftentimes are games in the more traditional sense. For example, M&M’s does not need to motivate anyone to eat a bag of their candies, but back in 2010 they turned to gamification after the launch of their pretzel-flavored treat. The result, called the Eye Spy Pretzel game, was apparently equally addictive, garnering them an additional 25,000 Facebook likes. The game, in which players have to find a pretzel hidden in an image of hundreds of M&Ms, works because it is simple and pure fun – just like the candy itself.
The Key to Successful Gamification
The key to success is for the company to get very clear on its purpose before designing the game. For example, is it a particular campaign or product launch, as in the case of M&M’s, or is it more closely tied to the overarching mission of the company, as with Nike? Another piece of advice from the experts is to keep the process as streamlined as possible – anything too complicated may actually defeat the purpose (i.e., fun) by creating a sense of overwhelm and/or frustration. On the other hand, if the company’s goal is to keep customers engaging over time (versus a limited campaign) they want to continually add features that will keep the experience fresh and enticing. For example, Starbucks Rewards customers claim increasingly better prizes the more purchases they make, which, combined with Starbucks’ exemplary customer service and attention to detail, earns their loyalty.
In each of the above cases, gamification is much like any other advertising campaign – it uses psychological principles to attract people, convert them into customers and retain their business. What makes it special – and so effective – is that it takes these principles a step further, inviting a greater level of engagement beyond the purchase through experiences that tap into our needs for achievement, praise, and belonging.