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Updated: July 16, 2018
What is Gamification Software?
Gamification software is any tool or platform used for applying game mechanics to non-game contexts in order to boost engagement and successful end-results. Common use cases include customer loyalty, e-learning, employee engagement, and performance management.
In recent years we’ve seen an explosion in the use of gamification and gamified elements in consumer and business software and apps. The increase in adoption of gamification has led to a split in definition between gamification and gamified elements. While there are still many platforms that provide custom and complete gamification tools for marketers, sales people, and consumer brands, there are even more types of software that have adopted gamified elements into existing products. Gamified elements include:
- Points or purchase-based rewards
- Social interactions and sharing
- Story and choose-your-own-adventure plots
This guide will talk interchangeably about gamification software and gamified elements as both have become commonplace and the distinctions between them become more blurred by the day.
Engagement. In many ways, it’s the mechanism that makes business tick.
It’s also easy to lose and difficult to inspire. Gallup’s 2016 The Worldwide Employee Engagement Crisis report found that only 32 percent of US workers are engaged with their jobs daily; less than half that number, 13 percent, are engaged worldwide. With such staggering news, companies must create new methods for making work more engaging. Disengaged employees are less productive and have lower morale because they tend to think negatively about their jobs. And this isn’t a static crisis: disengaged employees tend to bring their colleagues and teammates down with them, affecting the overall employee culture and spreading discontent throughout the company.
And engagement doesn’t just affect employees. Holding consumers’ attention through the continuous noise of competing marketing messages represents another avenue where engagement is critical to success. Modern consumers are fickle. Unless something truly intrigues them, they move on.
By harnessing the entertaining aspects of games, gamification technology offers organizations a solution to their engagement problems. In many of its initial applications, gamification has had impressive results, leading global organizations such as IBM, Deloitte, and NBC to use gamification in their marketing campaigns and workplaces, and even acquiring gamification startups to permanently integrate the technology into their software and business models.
Although some of the initial hype around gamification in the early 2010s has diminished, the market is still growing. Research in 2015 predicted the global gamification market to reach 11 billion by 2020, but at the end of 2017 the market was valued at 2.17 billion. Projections are still hopeful, however, with a predicted CAGR of 44 percent in the period leading up to 2023, with market predictions reaching as high as $19.39 billion.
The largest predicted area of growth for the global gamification market is in the HR space, where companies use gamification to engage employees with their work and career growth. While the integration of gamification into other tools may muddy market outlooks, it shows the methodology has wide acceptance. The normalization of gamification means you’ll find many other specialized and overlapping software categories including gamified elements:
- Performance Management: This HR software helps managers and teams better understand an employee’s job responsibilities, track job-related goals and metrics, and measure improvement. Gamified elements might be involved to track employee progress and increase engagement.
- Learning Management Systems: This software gives companies a platform to build, track, and improve employee and customer training modules through an online web portal. Gamified learning is often built into these systems to increase engagement and drive user outcomes.
- Employee Engagement: These platforms use gamified elements to promote productivity and revenue growth across a company. While often used to motivate sales teams to increase profits, employee engagement software can be used to reduce turnover, give meaningful feedback, increase training efficiency, and improve overall morale.
With such a huge market and a wide variety of solutions, it can be difficult for first-time buyers to make the right decision. This guide will detail the most popular methods of deployment, use cases for each scenario that can provide a roadmap for your engagement strategy, and common trends defining the gamification software market.
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How to Measure Success
Nearly all gamification platforms feature some type of analytics and reporting feature. As a gamification buyer, it’s your job to make sure the metrics within the gamification platform correlate to an actual increase in a metric that’s important to your business.
Consumer-Facing Use Cases
Keeping your customers loyal is marketing 101, and yet companies often spend much less on customer retention than customer acquisition. Forrester research found in 2016 that B2C marketers devoted 37 percent of their budget to attracting new customers and only 20 percent of their budget to retaining existing clients. This is despite research that shows that customer retention can pay off between 25 and 125 percent annually, with existing customers 60-70 percent more likely to convert than new customers. Let’s face it, it’s easier to retain than to find new, but companies are often focused on getting that next big customer rather than growing their existing relationships.
Loyalty programs can be found everywhere from your grocery store and coffee shop to mobile apps. Usually based on a point or badge system, customer loyalty gamification rewards customers for purchasing and sharing their experience with others. Common rewards include discounts and free gifts, free shipping, or other valuable prizes for engagement. By targeting specific behaviors and offering relevant reward systems, gamification provides an excellent method for rewarding your most loyal customers.
Marketing and User Experience
For marketers, grabbing the attention of consumers is more difficult now than ever before. Though increased engagement can be achieved through savvy social media usage, a tactic that Foursquare utilized to great success in its early days, creating engaging user experiences is often a more reliable strategy to ensure long-term engagement.
These strategies can range from engaging push ads that encourage consumers to interact with specific content to utility functions imbedded within an online application. Consumer loyalty mobile apps are increasingly engaging customers by enabling them to complete common time-consuming transactions on their phones. The Starbucks mobile app sends your order to a nearby store for pickup, the Walgreens app lets you renew prescriptions, and the Hilton app can work as your hotel room key. All of these features make customers more likely to stay loyal to brands because the apps make their lives easier, and they often earn rewards and discounts while doing their everyday activities.
Understanding what customers want and rewarding them for their engagement with your brand at the right moments is the new trend in customer experience. With all of our lives easily accessible through our phones, companies who give customers seamless access to their products will retain customers.
Business-Facing Use Cases
Gamification has been around almost as long as the sales industry; while modern systems may not win you a holiday turkey, they still work to motivate employees to compete against one another to sell more, complete sales tasks more consistently, and push revenue goals.
Sales people are naturally competitive, and those that aren’t don’t stay employed very long. So while increasing internal competition isn’t necessarily the biggest need in this department, gamification is most often used to focus sales teams around specific behaviors like putting data into the CRM earlier in the sales process or working on selling a specific type of product.
Sales gamification works much like any other gamification system in that it uses badges and leaderboards to communicate progress towards goals and motivate employees. Some products in this field build monetary or physical rewards into the games, while others are team-oriented and have the whole group working towards long-term goals. The best sales team gamification software will allow you to tie your contests directly to KPIs and revenue goals.
Call Center and Help Desk
As automation, predictive maintenance, AI, and other technological advances begin to remove humans from many manual jobs they once performed, industries have to pivot to a service-centered model to remain relevant and useful to consumers. Technicians have to learn to include customer service into their workflows and call centers and help desk teams no longer reset passwords but rather focus on edge case issues that require service skills and technical knowledge.
Consequently, automating your customer service isn’t a great option, but the increasing level of disengagement in service representatives needs to be addressed to keep their productivity from slipping further. To make matters harder, it’s difficult to keep skilled service agents. Call centers in particular can experience turnover rates as high as 27 percent among entry level employees, with experienced workers only marginally more committed to their positions.
To address this problem, many call center and help desk organizations deploy gamification platforms to solve their employee engagement problem. These tools pit individual or teams of service agents against one another in friendly competition to achieve high performance against customer experience and service KPIs and goals. Depending on the solution you choose and your company culture, rewards for high achievement can run from leaderboard recognition to prizes and bonuses.
Onboarding and Learning Management
The training process for new employees isn’t just important for making sure your new hire integrates well with the rest of team; it can have an impact on that employee’s productivity, the amount of time you may need for retraining, or even whether or not that employee will remain long-term.
Reducing turnover is particularly crucial in maintaining and extending the employee lifetime value (ELTV). A salesperson who received optimized onboarding and career management and development and stayed just one year longer than a counterpart in the same position could earn as much as $1.3 million more for a company. Studies indicate that the cost of a loss of a single employee increases exponentially with the employee’s pay: turnover of a lower wage employee who makes under $50,000 a year will cost you about 20 percent of their wages while a highly compensated CEO could cost as much as 213 percent to replace.
Gamified learning uses the same leaderboards, badges, and competition tools to encourage employees to take lessons tailored to the company’s training needs or contracted through third-party learning systems. These tools motivate employees to gain certifications needed for regulatory compliance, become better at working with people, learn how to use software tools, or even train to use complicated and dangerous machinery.
Onboarding nearly always requires recent hires to learn additional skills, or at the very least new organizational protocols that they’ll apply to their role. While gamification can be applied to many problems, it’s especially effective at encouraging learning. Companies who hope to train and retain their investment in employees should consider gamified learning as a way to get employees engaged in onboarding learning and extending their skills to grow into more complex roles.
Health and Wellness
Employee health can have a sizable impact on performance. Unhealthy employees take more sick days, which reduces their productivity and can cost your company money. Obese workers cost American companies 36 percent more on healthcare and 77 percent more on medication than their slimmer counterparts. This is a significant issue considering that 25 percent of American workers are not active at all, and 49 percent of Americans receive health insurance through their employer.
Implementing a company wellness program can make your employees more productive and healthier. For employees who aren’t currently active, forming healthy habits can be a challenge. Gamification offers an excellent supplement to a traditional wellness program, and can increase participation and long-term engagement.
Employee gamified wellness programs take many forms, from weight loss competitions and step count leaderboards to diet and exercise challenges that change from week to week. Many of these programs require self-reporting, but others gather exercise, heart rate, and calorie burn data from wearable devices like the Fitbit or via an app on the employee’s mobile phone.
Major Trends in Gamification
Our world has gone mobile. This change has affected how we advertise and how we interact with brands both at work and in our personal lives. The ubiquity of mobile usage for both work and play has driven the rise of gamified mobile apps.
Because everyone is connected all day, the chances for mobile gamification of business systems and consumer apps is much higher. Employees can get notifications on their phones to update sales numbers or work orders when they leave a job site, and consumers can interact with their favorite apps from anywhere including the office or coffee shop.
Modern life for many is dominated by social media: we keep up with friends and family on Facebook, we get our news from Twitter, we network on LinkedIn. Online social interaction has so dominated our lives that business apps now adopt many of the software tropes of social media including likes, activity feeds, and instant messaging. Each of these pressure software vendors to make interactions on business software like CRMs and ERPs more like the commercial apps we use every day.
The concentration of social interaction in our lives also drives and reinforces gamified elements of business software. Teams can support one another in sales competitions and congratulate the first to achieve a badge. In addition to growing revenue and helping teams achieve defined KPIs, the social nature of these tools helps all users engage in and form the culture of the company. A strong company culture results in more engaged employees, higher revenue, and reduced turnover.
Artificial intelligence (AI) has become all the rage among business and consumer software for lots of reasons, notably:
- It helps reduce some of the manual (and boring) work previously done by humans
- It brings together large data sets for fast analysis. The same data analysis would cost employees many thousands of hours and companies thousands of dollars in capital
- The algorithms and software that run AI are more common and less expensive to deploy than ever, giving more companies access to their benefits.
Companies can now collect massive amounts of data from customers about app usage, product interests, movements around the internet, and where they do their shopping (mobile, tablet, desktop). All of this can be used to better personalize marketing and sales pitches directly to the individual. Personalized pitches are useful in consumer gamification apps as they increase customer engagement with the app and bolster consumer loyalty.
Business-facing gamified apps can use AI to better understand employee workflows, collect and use data about which types of contests or engagements individual employees respond well to, and gather feedback via chatbots. Gamified business tools that use AI can also connect with employee engagement and performance management software to help companies improve their culture and increase sales numbers.
Consolidation of small companies into larger retail outlets
Growth by acquisition is a common story among large software companies: large and capital-rich companies bring on whole new technology branches by purchasing smaller businesses that are leaders in emerging technologies. And big name retailers and software corporations didn’t take long to hop on this trend. Walmart acquired Punchtab in 2015, Microsoft drafted Fantasy Sales Team in 2016, and SAP bought Gigya in 2017.
Market consolidation has a couple of effects:
- It makes gamification more accessible to business users who contract with the large software companies for their HR, sales, or IT software
- It results in fewer choices for individual businesses who want to introduce custom gamification into their software or business processes
- It makes gamification more common in the daily lives of consumers, who come to expect badges, leaderboards, and rewards in their interactions with consumer brands of all types
The overall effect of market consolidation is that it makes gamification so common in our work and personal lives that many of us come to expect these elements. Rewards for loyalty and healthy competition are so commonplace that brands who fail to employ some form of gamification risk being ignored by consumers.
Choosing the Best Gamification Software for Your Needs
Now that you’ve seen gamification in action, it’s time to find the solution that will work best for your organization. At TechnologyAdvice, we’ve already done the research for you, so you don’t have to spend hours, or even days, searching the Internet for the information you need.
Connect with the vendor that’s right for your business by calling one of our in-house specialists at 877.822.9526 or using the Product Selection Tool at the top of the page to get free custom product recommendations based on your company’s goals and needs.