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What is Gamification in Business?

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Last editedJan 20212 min read

At one point or the other, your favorite brand has engaged in an activity where you score points, stay top of a leaderboard or win badges for every purchase you make. This technique is called gamification, and is a proven tool for achieving certain business goals. Keep reading to find out more about gamification and it’s important for a business. 

Introduction to Gamification

To achieve certain business goals such as attracting new customers, increasing customer engagement, boosting productivity or improving customer loyalty/retention, businesses often employ game-like elements to unrelated situations. This art, called gamification, is a term coined by Nick Pelling in 2012. 

Gamification could be digital, as in online leaderboards, or analog, as in loyalty cards and milestone badges. Be that as it may, gamification generally makes use of various gaming concepts such as rewards, an entertaining interface, and a point system. It uses these gaming features to build systems that solve certain challenges businesses often encounter. Examples of such challenges include low customer engagement and retention. 

What’s more, gamification motivates the user to gladly get on with an otherwise boring task. It also increases participation and fosters other desired outcomes capitalizing on a person’s desire for recognition, competition, success and a sense of belonging.

Forms of Gamification

Several variations of games and game-like elements are being employed by businesses to drive organic business growth. These include:

  • Points and Badges: These gamification elements here create the much needed sense of accomplishment. It shows that the user has engaged and excelled in an activity. Some companies use different badges for different levels of customer loyalty or user participation. This prompts users and customers to do more to earn higher-level badges. Usually, the user or customer accrues points over a period of time through purchases and other actions to earn designated badges at different milestones. 

  • Leaderboards: Several companies use leaderboards to keep their customers/users engaged. This particular gamification element leverages on people’s desire for competition and status. Those who accumulate the most points through relevant actions rank higher on the leaderboard and claim bragging rights.

  • Contests and Challenges: These elements capitalize on a user’s desire for competition and victory. Organisations use this gamification element to drive up customers/employees engagement over a particular period of time, after which a winner emerges. Participants may have team or personal score cards.

  • Prizes and Rewards: Flowing from the last element, participants and winners in contests and challenges (as well as other tasks) may receive commensurate rewards for their efforts. In this case, the promise of a prize will drive engagement and productivity.

Gamification Examples

Gamification has been applied in several contexts, such as corporate training and human resource management. Examples of gamification in corporate training include using an application to gamify the onboarding process via group trivia, memory games and quiz modules instead of a boring paper guidebook.

Gamification in human resource management involves creating competitions for certain parts of an employee’s deliverables. Employees may compete against one another or compete as teams of different/same departments for a prize. 

Giving out awards in clear categories for specific durations is a good example of how we can use gamification to improve employee engagement. A recognition/reward for the best employee in a month or in a year will motivate employees to do more while also enabling a culture of merit. 

Pros and Cons of Gamification

Small businesses and large companies alike can maximise gamification if properly executed. They stand to gain better employee engagement and productivity, increased sales, enhanced customer satisfaction and loyalty and much more. 

However, gamification will not be effective where the reward given to winners/participants is not valuable or wrong actions are rewarded. In fact, you may end up getting  the opposite of the intended outcome, especially with employees, if some players have an unfair edge or where the prize promotes competition over collaboration.

Nevertheless, gamification remains a proven technique business can employ for business growth, most significantly for customer engagement and improving employee productivity. 

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