About the Author: Yu-kai Chou is a Partner at the Enterprise Gamification Consultancy(EGC) and a gamification pioneer who has been working in gamification since 2003. Yu-kai is the original creator of the Gamification Framework Octalysis, and is a regular speaker/lecturer at organizations like Stanford University and Google Inc.
The Importance of Rewards in Gamification
One of the key values that good gamification design can deliver on is improving engagement with the company’s targeted audience, whether it be users, customers, employees and/or other stakeholders. To be effective for any given application, a significant amount of thought must be put into understanding what is necessary to engage and motivate individuals at a deep level.
Incentives and Rewards are a crucial piece in the engagement puzzle. With proper and thoughtful design, incentive and reward programs can be very effective in providing optimal motivations for driving engagement. That is, with the right selection and mix of rewards, and an effective system for delivering these rewards, participants not only become engaged, but are also retained and become valuable evangelists for the company.
Two Parts of Rewards Planning
There are two elements of a reward that need careful planning: WHEN a reward is given out, and WHAT the reward is. So, just as the timing of the reward is important, the nature of the reward is important. Ultimately, the goal of the reward is to maximize motivation prior to receiving the reward, as well as happiness after receiving the reward.
But in terms of the structure of the reward, we can look at six types of rewards that can be implemented into a design as well as their key features.
1) Fixed Action Rewards (Earned Lunch)
In Fixed Action Rewards, users complete a certain task, and get the exact reward that they want or expect when they complete it. Similar to fixed ratio schedules, these programs reward the user after they successfully perform an action a fixed number of times. This is appealing because users know exactly what they are getting and will work towards that goal.
One common example of these programs are sandwich store punch cards, where you buy ten sandwiches and get the next one free. This encourages the customer to eat at the sandwich shop more often.
Another example is the frequent-flyer programs offered by several airlines, where customers who are enrolled in the program can earn “frequent-flyer miles” which are accumulated by distanced flown on that airline (or their partner services). These “miles” can then be redeemed for free flights, class upgrades, or other goods and services. Oftentimes the miles can be transferred to other participants in exchange or as gifts.
2) Sudden Rewards (Easter Egg)
Sudden Rewards are surprises that are unexpectedly given out. This is appealing because users were not expecting anything and suddenly get rewarded. The surprise element would give them an extra shot of happiness, making them think about whether they would obtain another Easter Egg in the future.
A good example of a sudden reward system is the “Chase Picks up the Tab” program. Once enrolled in the program, Chase cardholders have a very small chance of getting a text that tells them that Chase picked up the tab, and will credit the $5 purchase back into the accounts. Though the reward dollar amount is not great, it compels consumers to regularly swipe with their Chase cards instead of other cards because they want to see if they “won” again this time. Oftentimes, users will tell their friends about their winnings too, attracting other consumers to sign-up to this “game.” This is a great example of utilizing Unpredictability & Curiosity from the 8 Core Drives of Octalysis.
3) Random Rewards (Drops)
This type of reward may be anything and it will only be revealed once the required action is completed. This is appealing because the user continues to anticipate and guess what the reward might be, creating a feeling of suspense that engages them.
One example of random rewards are those associated with the White Elephant Gift Exchange game that often occurs at holiday parties around Christmas time. Also known as the “Gift Swap”, among other names, this “game” provides a mechanism for distributing inexpensive or undesired gifts (often from previous holiday seasons) among the participants.
The Exchange starts with each participant providing a wrapped gift for the gift pool, and then a determination is made for the order with which each participant will select a gift. The first participant selects and opens a gift from the pool. The next participant can then either select from the pool of unopened gifts or “steal” the opened gift from the first participant, who then selects from the pool.
The next player has the option to select from the pool or “steal” either gift from the previous players. This goes on until the last player selects the last gift or steals from one of the others, in which case, that individual opens the last gift. Again, in this case, everyone knows that once completion of the task, a reward will be earned, but what the reward is can only be known at the end.
A second example of Random Rewards is the Mystery Box Shop. Customers join the service via subscription and pay a monthly fee. On the first of each month a package containing 5 to 10 “fabulous curiosities,” is shipped out to the customer.
The contents of each package follows the theme for that month. Recent themes include “Never Grow Up,” “Hallowawsome,” “Another World,” and “Old School.”
Promising to be cool, curious, odd, or even bizarre, each Mystery Box provides an element of intrigue, which strikes the customers curiosity. Consisting of a mixture of clothing, toys, gadgets, snacks, electronics, and who knows what, each delivery is like opening your presents on Christmas morning. It will keep them coming back for more.
4) Rolling Rewards (Lottery)
Rolling rewards go from one person to another – someone has to win. Typically this form of reward determines a winner solely on chance, while creating growing levels of anticipation. This is appealing because everyone has a good (though small) chance, but people believe they will win with enough persistence.
Examples of rolling rewards include lotteries and sweepstakes. Traditional lotteries have large numbers of participants who make modest commitments in order to have a chance of winning substantial, often huge rewards. Any individual can improve their chances by purchasing additional tickets, though this strategy increases the mathematical odds only modestly. Lotteries often create heightened levels of excitement, and can become somewhat addictive; a situation that sometimes cause criticism for the organizers.
Lottery and sweepstakes winners are often promoted and featured in the media, providing further incentive for current and future players. This encourages all participants to stay involved. In the case of the Speed Camera Lottery, the community also benefits from the safer driving habits that the system helps to establish and reinforce.
The activity “Musical Chairs” illustrates a game situation where someone has to lose on each turn. This is the reverse of a Rolling Reward (Rolling Penalty), and equally engages everyone as they continue to play through much optimism and engagement.
5) Social Treasure (Gifting)
Social Treasures are rewards that can only be earned when “given” by another user. This is powerful because the user must get others to participate, increasing the virality (growth) of the service. In a sense it helps to promote involvement from others, and further encourages them to stay engaged.
Referral fees are one example of this type of reward. A restaurant, club, or other organization might provide special incentives – “Your friends come in at 20%!” “Bring a fourth and get an entree for free!”
Other examples are voting competitions where people must obtain the most votes or “likes” in order to win a prize. I’m sure you’ve all had the experience of some friend or family sending you an email asking you to “like” for their image or entries on Facebook, so they could win the grand prize from their favorite company.
The Social Treasure here is not the ultimate prize from that company (that would be considered a Fixed-Action Reward), but the votes and likes that can only be given out by someone else other than the user him/herself.
Some view the Academy Awards as an annual game where each studio dedicates substantial marketing resources to sway academy members into voting for their candidates and features. Because so many members want the highly coveted Oscar (read: status), they go out of their way to obtain the “social treasures” from others who generally give them a vote, benefiting the program organizers.
6) Reward Pacing (Collection Set)
These are rewards that are given out a piece at a time instead of altogether. This is effective because once a user has a few pieces, s/he will work hard to complete the collection. It is also more cost effective because the company does not need to give out tangible rewards to everyone.
A good example of reward pacing is the McDonald’s Monopoly Game. A cooperative effort between McDonald’s and Hasbro, this game uses the original Monopoly theme to promote a sweepstakes type of awards system. Customers would receive game tokens with each purchase of certain menu items.
Since the tokens were matched with the different board properties, customers could redeem complete token-property sets for cash rewards, with the most valuable property sets yielding awards in excess of $1 million.
If a user had 80% of the set, they obviously will become a lot more engaged and trying to finish the set as soon as they can (but for some reason the last 2 pieces are always impossible to get eh?) But do be careful, consumers will only try until they feel like they are not making any progress for a long time and will give up after that.
Another example can be seen from some friends I have at Zapt: the meta-game on top of Twitter. Zapt gives real rewards and prizes, but only after a user completes the entire collection set of 20 “medals,” each requiring specific challenges and tasks. The amazing thing here is that active users who are engaged will tweet 3 times as much as the average Twitter user to try to obtain parts of the final prize. They will even pay real money to help unlock – not the real prize – but the virtual medals, so they can advance toward the completion of their collection set.
Gamification and Engagement is all about good design, and it’s never a cookie-cutter solution. Many solutions out there use a clever combination of the above reward types – think about slot machines in casinos.
This is why utilizing great service providers like BigDoor can significantly help your company design the best services and engagement programs to maximize your user motivation and engagement with each reward – instead of just giving away free stuff without any returns on your investment.