Shall We Play a Game?

Gamification uses game mechanics such as competition and rewards to encourage consumers' behavior. Gamification encompasses the thinking, processes and technology that influence online behavior (such as social loyalty programs) for the direct benefit of the sponsoring party (say, a business), as well as for the online user (one hopes). Now, gamification is being adopted not only for the consumer market, but within enterprises.

One lens through which to view gamification is as the application of behavioral analytics. While predictive analytics has a valuable role, it only forecasts what is likely to happen, and so it is essentially passive. In contrast, behavioral analytics is proactive and dynamic; it attempts to make things happen by influencing users' behavior as they are engaged online.

Just as with the astrological view of the stars, gamification can only impel, not compel. For example, a website might use a social loyalty program to encourage users to Tweet about it, respond to polls, note "likes" on Facebook and perform other actions that increase the attractiveness of and participation on the website. The site can have a program that awards points for taking specific actions and can lead to achievements and levels that the user is trying to attain.

As one of the pioneers in the field, Badgeville illustrates the rise of gamification. Founded in 2010, Badgeville has raised $40 million in venture capital. It is already at 80 employees and nearly 200 customers, and is hiring people with a diverse range of skill sets, including behavioral psychologists and data scientists.

Badgeville offers a SaaS Behavior Platform. At the heart of this platform is the Behavior Engine, the purpose of which is to enable engine administrators--such as marketers, product managers, HR leaders and business executives--to measure and influence the behavior of individuals across a network of internal and external Web and mobile sites and applications. Other gamification startups include Bunchball and BigDoor.

Badgeville's Behavior Engine powers a program to influence user behavior based on gamification frameworks and strategies that its team of social gaming experts has designed. The Engine captures and stores behavior metadata across a network--such as tag, product ID, time and author--that describe real-time, contextual behavior experiences across customer and employee communities. Not only can this data be used to drive future behaviors (as the operator can see what incentives customers find most enticing and modify his/her strategy accordingly), it can also offer analytic insight into the health of a community (such as whether a website is achieving whatever goals it has set, such as increasing the length of time visitors spend on the site).

Rewards are often used to elicit what the Behavior Engine operators consider to be desirable behaviors. With Badgeville's Behavior Engine, operators can build business rules, such as one that requires multiple conditions to be met before a reward is triggered.

As with any technology (especially a rapidly evolving one), gamification has its potential downsides. For one, unrealistic expectations and failure to apply the technology correctly could lead to disappointment. Another is that it could be too successful in that it leads to online addiction (in the sense that a user spends too much time online, ignoring other demands on his/her time).

Next: Examples of GamificationGamification is not just about increasing revenues (although there are many applications of that), but also eliciting other desirable behaviors. Let's look at a few examples of how Badgeville's service can be used:

Salesforce management: An app, Badgeville for Saleforce.com, embeds into the Salesforce.com CRM application to reward valuable employee behaviors. For example, employees can earn points creating or responding to a lead, converting a lead to an opportunity or closing a deal. This may sound like common sense, such as having a leaderboard and achievement levels, but a structured approach such as gamification is necessary to get the most out of as many employees as possible. While some workers never need incentives, and incentives cannot drive others, there is also a group for whom incentives matter.

Prescription compliance: Kaiser Permanente is using Badgeville DGE gamification technology to help it address a problem of getting some people to refill and use their medical prescriptions properly. This benefits the individual with the prescription and saves the overall health care community money because neglecting to take medications may lead to higher medical costs later on.

Social loyalty programs: Badgeville's technology has been used in a number of social loyalty programs to not only improve customer retention and repeat usage on a site, but also to get users to socialize and interact with one another (social media being a big use case for gamification).

Some readers know that online experiences are becoming more pervasive all the time, and that website owners attempt to influence your behavior. Some might be offended by this, but like advertising, it has to be accepted as part of life online. As long as you can participate voluntarily for the most part, and the gamification element is not as intrusive as something like pop-up ads, it shouldn't be a major issue. The data collection process involved in gamification goes on anyway when you surf a website or place an order, so an offer that gives you points toward rewards doesn't have to be blatant. Not only that, the fact that you respond to incentives means you derive some value by doing so. That's not a bad thing.

Badgeville is not a client of David Hill and the Mesabi Group.