Gamification is the recent buzzword that has taken over marketing and customer engagement strategies. Gamification can be used to drive certain behaviors and make tasks and technology more engaging to users. The premise of gamification is that desired tasks are translated into badges, status, points, etc. so customers earn more, the more they interact. Companies can use this to encourage customers to take surveys, watch videos, write reviews, visit stores or any other action they believe is valuable for the customer. The beauty of gamification is that rewards can range from strict bragging rights (for competitive customers) to actual discounts or special offers.

Research firm, M2, estimates that the gamification market is currently worth $100 million, and is expected to reach $2.8 billion by 2016. Experts are also projecting nearly 200% revenue growth in this market for 2012 alone. In the near future, it is clear that gamification will be a key part of user engagement and loyalty initiatives.

Many retailers have already started successfully integrating gamification into their marketing strategies. For example, Bluefly aimed to engage customers on their site by awarding them with badges when they watched videos, wrote reviews or created wish lists. These badges highlighted user statuses and could lead to rewards like deals and early access to products. The combination of tangible benefits and bragging rights has helped make this a success among customers.

Another example was when Best Buy partnered with CityVille, a popular game on Facebook. In the game, players are able to build homes, roads, and create entire cities. Last fall, players were also able to add a Best Buy to their city and collect different Best Buy electronics to unlock special decorations for their store. Since this partnership occurred right before the holiday season, it ensured that Best Buy was top of mind for players when it came to shopping for gifts and reminded users of the types of products sold.

Gamification doesn’t need to be a stand-alone initiative though. By partnering with banks and vendors like Truaxis, merchants can offer customers (and potential customers) badges and rewards based on how often they shop, how much they spend or how involved they are in the specific merchant category (such as if they frequently shop with a competitor). This allows merchants to easily reach their target clientele and reward customers with highly targeted discounts and rewards while building permanent relationships between the merchants and their customers.

By 2014, 70% of the top businesses are expected to have one or more gamified applications. Gamification is a great way to get customers engaged with a brand while simultaneously increasing customer loyalty and revenue.

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