Every couple of years, a new collective within the Software as a Service industry (SaaS) makes a huge breakthrough. In 2011, it was business intelligence. In 2013, it was marketing automation.
This year, I'm making a bold statement. In 2015, the SaaS sub-industry set to undergo a sudden growth spurt will be gamification.
Seem implausible? There is enough data out there to suggest that 2015 will be the year gamification begins forming the next huge wave in enterprise software.
You've heard this before though, right? Indeed, what started as promising projections from Gartner
and initial hype for the gamification industry has now largely dissipated.
Forget perceptions of industry malaise for a second, though, and look at the greater picture. Market conditions, product maturity, and workplace demographics are en route to a promising collision point for gamification. Together, these forces are about to drastically impact the ability for gamification -- yes, gamification software -- to offer sustained value to enterprise.
I'm here to predict that 2015 will be the year when key breakthroughs are made that will launch industry growth into perpetuity. This is the year that every enterprise will have a budget for gamification.The Shift from 'Luxury' to 'Need'
How does a SaaS industry collective hit a turning point with growth? Time warp back to the late 2000s with me for a second.
At the turn of the decade, business intelligence
and marketing automation
softwares were still in their halcyon days and regarded as luxuries. Industry revenue was a fraction of where it stands today, when you'd be hard-pressed to find an enterprise entering 2015 that lacks either software tool.
There was a notion that these specialized tools were a luxury that could only be afforded by Fortune 1000 companies. In the case of marketing automation, the concept itself appeared inherently dubious. Does any of this actual work? Five years and 12 times the growth in revenue later, I think that answer is pretty clear.
There are two overarching reasons why SaaS industry bigwigs in business intelligence and marketing automation began exploding.
● The products matured to the point of becoming genuine, sustainable utilities.
● Their subsequent proliferation within and across major industries created veritable "arms races" among enterprises to arm their personnel with these high-tech products and the competitive advantages they offered.
The state of business intelligence and marketing automation softwares as of 2015 is, in a few words, very bright.
These twin developments in business intelligence and marketing automation signify the equation required for industry breakthrough: The convergence of genuine, arising market demands plus product innovations that adequately meet those demands and a foreseeable future utility of the products for gaining a competitive edge.
All of these factors are now present for gamification, too.A Convergence of the Elements
Entering 2015, Gamification is arriving at a tipping point that I'd best describe as a "convergence of the elements required for success," if you will.
The first factor is a combination of increased growth in Inside Sales
(away from Field Sales) along with the rise of the Predictable Revenue
sales model. The conjoined industry trends have, in turn, created a market for the mass proliferation of sales development rep (SDR) tools, all aimed at creating more synergistic sales processes.
The second factor is the innovation taking place within leading gamification products themselves. Top-of-line gamification tools now not only integrate with other key sales technologies, but they also, more importantly, equip users with a set of actual incentives.
A third and final factor isthe emergence of Millennials in the workforce. Combined all together, you have a perfect formula for gamification's mainstream emergence.
Before we jump into each factor, it's important to note that it is the sum of these three elements, not the individual parts, that creates the conditions for an industry surge. As noted earlier, the sudden, world-beating arrivals of business intelligence and marketing automation in years past are indicative of how the market landscape, viewed in individual segments, masks a burgeoning industry's true potential.
Taken disparately, none of these particular elements prove all that compelling. Add them together, however, and we're looking at 2015 becoming "year zero" for gamification 2.0. Factor No. 1: The 'Year of the SDR'
I interviewed Max Altschuler of SalesHacker recently for the Ambition Blog, and he declared that 2015 will go down without question as "The Year of the SDR."
What does that mean? For one, it's a reflection of the changing landscape of sales in general, which has been steadily moving away from field sales and more toward an inside sales model over the last few years. Alongside this trend comes a greater demand for more complex and sophisticated sales development reps, inside sales processes, and effective management.
What we're seeing is the rise of the Predictable Revenue sales model
, which puts an emphasis on continuous commitment to refining one's processes and talent to create a capable, sustainable machine.
Tools that allow SDRs to track their own progress and, in turn, administer self-coaching are at a premium. Software that automates data implementation and reporting are at a premium. Both in no small way are related to the major coaching obstacles that plague time-and-resource-starved sales managers. The "Quantified Self" has met the Salesforce.
The thing about sales automation tools, however, is this: SDRs still have to care, even as they're making less money than ever before. And a past mistake from companies implementing gamification tools -- and gamification industry members themselves -- was thinking that things such as badges, leaderboards, and so forth could replace the dollars suddenly missing from SDR paychecks.
That pipe dream is over.
The question now becomes this: can Gamification go beyond intangible incentives and offer true value to enterprise users in 2015? Factor No. 2: New User Incentives
Powerful insights drawn from the failures of gamification 1.0, coupled with some major emerging product innovations that have taken place over the past year, create a key component enabling the breakout of gamification in 2015.
The pivotal realization is this: Using gamification merely as a reward, in and of itself, is inherently insufficient. Using gamification as a tool to foster self-analysis and automate coaching and recognition, on the other hand, is something entirely different.
Gamification companies are starting to get that. The Harvard Business Review
to self-quantifying tools such as the Nike Fitbit in an October 2014 article. Taking that comparison a step further, Level Eleven
adopted the tagline "Fitbit for Sales" in its for its new Scorecoard feature just last month. Rivalry
has honed in on using gamification specifically as a coaching mechanism for its users.
We've had Ambition users at companies such as Coyote Logistics tell us this themselves. Forget the competition aspect; the most sustainable value of the product is allowing users to stay focused and track their own performance over time. We've had managers say likewise about our "Triggers" reporting tool, and its abilities to automate exception reporting and attack performance issues when they're "sparks, not fires."
If nothing else, the product innovation decisions made by gamification industry leaders over the past year indicate a better understanding of user demand, geared toward tools that automate professional growth, coaching, and recognition. In that order.
So, how will gamification 2.0 incentivize SDRs and sales teams?
By replacing lost salary revenue with more revenue. Gamification tools that successfully compel users to be more motivated, more productive, and more committed to accurately tracking their own performance data in 2015 will do so via the ultimate reinforcement mechanism: bigger commission checks.Factor No. 3: The Millennials Are Here
The third and final factor -- the emergence of Millennials -- will foster the long-term value of gamification products.
As any sales manager will attest, the war for talent is real. And factor No. 2 is what will enable enterprises to attract and retain top Millennial talent, via incentives that are both hard (money) and soft (youth-oriented culture, innovative business practices, etc.).
The topic of managing Millennials in the workplace has been discussed ad nauseam, and if you have any experience managing members of my generation, you know firsthand the challenges that come with it. The playbook for motivating and engaging a demographic that has completely flipped the script in terms of how they respond to typical training and motivation methodologies is still being written.
That being said, I will cite leading Sales expert John Barrows
, who had some great insights on this topic in our October interview:
He said, "A lot of these kids coming into the workforce, especially in sales, don't see money as their top motivating factor. It's all about workplace environment and recognition." He was also quick to add the following key insight: "If you give structure, they will execute."
If nothing else, gamification softwares are focused around cultivating a sense of structure, environmental motivation, and recognition opportunities. And they're only getting better at leveraging these powerful forces within your workforce.
As Millennials continue to enter -- and will eventually dominate -- the workforce, companies using tools that instill structure and engagement will thrive. Those that additionally prize recognition, coaching and a healthy workplace environment? They will become downright lethal.
By the end of next year, Millennials will comprise almost a full one-half
of our entire workforce, a number that will pale in comparison to the demographics of most sales teams. Gamification stands poised to provide a competitive edge for attracting, retaining, and maximizing the talent for sales industry leaders.Room in the Budget
Now that we've reviewed all of these elements, one final question remains: Can a gamification product fit within the average sales team's budget?
I'd argue that 2015 is the year when that answer becomes "yes." The best time to invest in an enterprise software is during its transition period from a luxury product to a need product. The companies that invest in gamification, like those that invested in business intelligence and marketing automation, will enjoy the strongest strategic advantages from its usage.
To explain, the transition of SaaS industry products from luxury to a need take place via echoing positive reinforcement. Market reality (this product has true utility and adds sustainable value to my organization) influences market perception (my competitors and organizations I respect users and advocates of this product).
What results is a positive reinforcement echo chamber which, almost inevitably, leads to greater future investments in product research and design, and in turn, provides greater returns for users, propounding the positive reinforcement process and eventual transition from luxury to need.
All the indicators affirm that gamification stands on the brink of entering a new market reality and the echoing positive reinforcement process. The convergence of three elements -- the rise of the SDR, the sophistication of product, and the growing influence of Millennials -- is already manifesting, and will continue to compound over forthcoming years.
Few will see it coming, but year zero for gamification is here. So, mark your calendars -- and leave a little extra room in the budget.Jared Houghton is the CSO and co-founder of Ambition, a gamification software platform. A technology industry veteran, Houghton has guest authored posts for Sales Hacker and is the host of the Sales Influencer Series, where he conducts interviews with thought leaders in sales, management, and gamification for the Ambition Blog.