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by William Ng | April 05, 2011
In the near future, consumer loyalty programs could look more like FarmVille, Mafia Wars, and Foursquare than the “earn and burn” formats we know today. 

FarmVille, the Facebook social game, engages over 10 million people daily, who spend hours harvesting virtual crops and collecting “farm coins,” “farm cash,” and “experience points.” Players track their friends’ progress on Facebook and also help each other in accomplishing specialized tasks for virtual rewards, dubbed “coopetitions.” Each month on Foursquare, two million players gain virtual points and achievement badges by checking into places. 

The fanatical devotion to social network games has not gone unnoticed by loyalty marketers. Retailers and brands are now ramping up the social capabilities of their websites, giving away virtual points and merit badges and using other “game mechanics” such as leaderboards, ranks, and avatars to engage customers. In one example, Intuit, the maker of TurboTax software, has established virtual points leaderboards in its online community to recognize message board members who give out useful tax advice the most. 

But in more and more cases, virtual achievements are being linked to real-life rewards. Warner Brothers “gamified” its website and now awards redeemable credits to those who play its online games, comment on videos, and complete surveys; the credits can be used to acquire wallpapers, ringtones, DVDs, and Blu-rays. Fashion brand Jimmy Choo recently deployed a Foursquare scavenger hunt in London in which users got free shoes if they checked into a place where its new sneaker collection was present.

Loyal Gamesters
Experts in the “gamification” field anticipate the business use of social games will redefine engagement and loyalty. So much so that the first-ever Gamification Summit took place in San Francisco in January, linking 400 video game industry leaders, game designers, brand marketers, and interested parties to discuss how game-play elements can benefit other industries. “It’s taking what’s engaging, exciting, and addicting about games and applying it to loyalty programs,” notes Barry Kirk, solution vice president of consumer loyalty at Maritz Loyalty & Motivation.

The use of gamification to turn loyalty programs into enjoyable and social online experiences is seemingly the perfect marriage of technology and motivational psychology, leveraging people’s fundamental needs for achievement, reward, status, competition, and self-expression. “You see all kinds of social points, like YouTube’s star ratings—people who like my videos,” he says. “Those are public symbols [of] status. It’s not about points being converted. The rewards are intrinsic.” He adds that earning badges satisfies the natural urge to complete a collection, since people “don’t like unfinished things.”

Kris Duggan, CEO of Menlo Park, CA-based Badgeville, whose software lets website owners award badges to loyal visitors, echoes Kirk’s sentiment. “Traditional loyalty programs are not inherently social,” he says, “but once you make them social, and status can be broadcast, people are willing to work very hard to build that status” through loyalty tasks. (You can read our interview with Duggan here.)

Kirk says loyalty programs fundamentally haven’t evolved much from their points earning and burning cycles. That predictability and lack of emotional connection have put consumers on autopilot. Loyalty managers, he says, can stimulate participants with simple gamification elements like awarding badges for doing program-related activities and letting them display the patches in their profiles on the program website. They also can create status tiers to rank the participants. 

They can foster competition with points leaderboards but also can benefit from game mechanics like discovery and scarcity (for the thrill of uncovering something exclusive and valued), random coopetitions that let participants barter their skill sets to achieve an overarching program goal, and catchy graphical progress bars to reinforce and motivate individuals to complete tasks—for badges, social points, or even redeemable points. “It can be a unique earning experience where you have to do three things in a week that will earn a special recognition,” Kirk explains. “It’s saying the program can be a bit unpredictable. The brain loves unexpected rewards.”

All of this is designed to provide a constant stream of motivation and keep participants engaged throughout the program lifecycle and even after the real-life redemption or award period. 

Vendors Gamify Sites
A number of suppliers have emerged to provide gamification consulting services and software tools that give e-commerce sites game mechanics and analyze their visitors’ game involvement in real time. They include Bunchball, Reputely, Badgeville, and Gamify.  

“Most websites have no real-time interaction and engagement,” says Nathan Lands, co-founder and CEO of Gamify, a start-up based in San Francisco. “The basic idea is that if users earned points and achievements for having accomplished something meaningful on your website, they are more likely to feel ownership and connected to your brand.”

The company has just launched the free beta release of its gamification platform of the same name, and Lands says well over 1,200 companies have signed up to use it. Gamify adds a “game layer” to a website, with user actions, discovery quests, challenges, badges, virtual points, and status levels. Site visitors create user profiles, track their play with progress bars and notifications, show off their credentials, and interact with other users.  

The platform is designed for non-technical administrators and works on any device with an Internet connection. Administrators can customize the look and feel of their game layers and pick and choose the games they want to use based on needs and real-time feedback. The live release will be subscription based. 

“We expect the early implementations to just scratch the surface. We actually encourage companies to start simple, see what works, and iterate,” says Lands. “It’s similar to the way Zynga [the creator of FarmVille and Mafia Wars] operates, killing off a game if necessary, except in our case, a feature or a setting.”

There will be an online store where administrators can acquire additional game mechanics and widgets created by third parties, similar to Apple’s App Store. Lands, moreover, is planning to develop an entire gamified community around the Gamify platform. 

He explains: “The idea is that over time we will continue to offer new ways to reward and engage users. The Gamify Experts network provides a place to learn, share ideas, and work together. The more they learn and contribute to the community, the more points and achievements they earn, to reflect their experience levels on their user profiles. We plan on allowing companies that use our platform to discover high-level experts and potentially contract them for projects.” 

Maritz, meanwhile, last fall established a partnership with San Jose, CA-based Bunchball, the company behind the gamification of Warner Brothers’ website. The alliance intends to take advantage of Maritz’s loyalty and incentive management expertise and Bunchball’s Nitro software tools and game mechanics know-how, giving gamification clients one-stop-shop solutions.

Kirk cautions that before slapping badges on everything, make sure your “game story” is well thought out. The Maritz executive notes, “If there’s nothing more sophisticated behind the badges, [retention] is not going to last. It’s going through the exercise of saying, ‘If this were a game, would it be interactive, playful, and engaging?’ All good games are special experiences, and how to apply gamification is just getting started.” 

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Read Barry Kirk's thoughts on gamification for employee engagement at http://bit.ly/fAilxm