With 2012 behind us, my team and I at BigDoor have been reflecting on the state of the much hyped and oft derided gamification movement. Game mechanics are now being deployed in a number of employee facing solutions, but the most exciting and impactful uses of gamification continue to be in consumer-facing experiences. 2012 saw new gamification efforts from a number of big brands; NFL, MLB, Yamaha, Adobe, Universal Music, Starbucks and Random House – just to name a few. Now that many of the most powerful consumer brands in the world are embracing gamification as a way to increase loyalty and engagement, it is worthwhile to take some time to understand why and what’s coming next.
So as 2013 gets underway, I wanted to lay out my predictions for where I see gamification heading in the coming year:
1. Gamification will define next generation loyalty programs. There is an ever growing trend that traditional loyalty programs are not delivering the results that marketers want. A recent Forrester Research, Inc. report noted that, “compared to 2008, 40% more consumers feel that loyalty programs offer them no value at all”¹. Affecting the success of these programs over the last 4 years is the rapid adoption of customers interacting with brands online. Traditional methods of loyalty marketing are not addressing the needs of online customers. But where traditional rewards programs are failing, gamified loyalty programs are rising to the occasion; consistently deliver higher customer acquisition rates, better engagement on and offline, and clearly offering customers value well beyond the traditional transaction based rewards model. Innovative brands are embracing gamified loyalty programs, and as a result are putting significant competitive pressure on those brands that have yet to deploy this next generation of loyalty programs.
2. The e-commerce/retail sector will deploy gamification faster than any other industry. Despite its increasing lack of success, loyalty marketing has been a cornerstone of the retail industry for a long time. With gamified loyalty programs rising in popularity, the rapid adoption of these programs in the retail and e-commerce industries is inevitable. Gamified loyalty programs – unlike traditional transaction based models – give marketer’s access to key customer metrics from acquisition to engagement. These insights allow marketers to better personalize interactions with their customers on and offline.
3. Gamification implementations will become more brand specific and allow more personalization of the user experience. One of the regular complaints I hear from marketers using a traditional loyalty program is that legacy loyalty program vendors provide a one-size-fits-all approach to their programs. As more brands embrace gamified loyalty and rewards strategies, gamification experts will need to ensure that their programs are on-brand and authentic, but they should also be personalized. Truly effective gamified loyalty programs should allow marketers to target specific rewards to their customers based on their buying habits and demographic/psychographic information. A more personalized experience for customers results in higher customer satisfaction, which means more customer loyalty.
4. Many gamification implementations will fail due to an absence of ongoing program management. Gartner released a report in late 2012 announcing that 80% of gamification implementations would fail. Despite the success gamification saw in 2012, this number seems likely, unless gamification experts embrace gamification as an ongoing strategy and not a bolt-on solution. While this means that gamification requires more work, it has also lead to some truly effective gamified loyalty programs that deliver a huge impact to the brand’s bottom line.
5. Successful gamification implementations will be cross-device, cross-platform and even available offline. Now more than ever, customers are interacting with brands through a wide variety of channels; mobile, tablet, web and believe it or not – sometimes even in-person. Unless customers are willing to register and login when using these various platforms, most brands have no way of knowing users as they move between them. As brands search for ways to get data from and develop relationships with their customers, the need for knowing who your customers are across channels has become crucial. Gamification implementations give customers a real reason to register and login, and this is a critical first step for a brand to develop a true relationship with their customer across all of their various platforms and touch-points.
6. Advertisers will embrace gamification as a new growth area. With the popularity of consumer facing gamification on the rise, it is only a matter of time before advertisers realize the huge new revenue potential these programs hold. Consumer facing gamification implementations provide an entirely new revenue stream, allowing higher ad revenues for brands and new advertising opportunities for sponsors. Brands like the NFL have already begun to embrace this trend, partnering with Visa as a primary sponsor for their NFL Fan Rewards program.
7. Gamification platforms that provide actionable analytics and reporting will succeed; those who don’t will fail. No gamification implementation is complete without a robust set of real-time analytics and insights. These insights tell marketers what is working and what isn’t working, and allow for real-time adjustments in gamified loyalty programs. Gamification companies will increasingly need to demonstrate the value of their products using detailed analytics and program monitoring. Marketers in 2013 should require simple and relevant metrics that help the iteration process of their program and validate the return on investment that a gamified loyalty program delivers.
¹: “Building A World-Class Loyalty Program”, Forrester Research, September 28, 2012[FRI1]
We will be highlighting each of these predictions over the next few weeks on mygamification.com. Keep checking back!