What is Gamification? Explore The Basics

Games are fun, engaging, and addicting. It is, therefore, no surprise that Gamification is widely used as a customer engagement strategy by marketers and product designers in almost every industry. Gamification has proven to be an efficient strategy for improving people’s motivation and performance.

Change is hard. Be it our learning methods, health habits, day-to-day activities, or financial habits. Certain variables always prevent us from achieving what we want. Gamification triggers powerful and real human emotions that motivate us to finish these tasks.

In this article, we’ll cover gamification, whether it is overhyped, and why it is a winning strategy for customer and community engagement. Also, read about different industries — from eCommerce to Urban Planning, where Gamification can boost your profits.

This article is written by Architaa who works as a Content writer and strategist at Upshot.ai. When not working, she loves to write fictional stories and dreams of getting them published. Being an avid reader, she loves collecting books. She also likes to research Customer engagement and retention strategies for different industries.

Gamification — The Latest Fad?

Gamification has become a buzzword in the last few years, but it has been around for decades. It has just taken time for business leaders to see the benefits of applying gamification techniques to their products and services. It is the secret weapon that helped many product leaders significantly increase their engagement and conversion metrics by up to 100%.

As per the trends, the global gamification market size was USD 11.69 Billion in 2021 and is expected to register a revenue CAGR of 27.4% during the forecast period.

Why Does Gamification Work?

Gamification is a technique where you take the crux of what makes games fascinating and incorporate it into a non-gaming context. It involves absorbing fun and addicting elements from game mechanics and dynamics into real-world applications.

• Using gamification elements such as badges, leaderboards, points, rewards, personalization, and more will increase user engagement, loyalty, and results in your business.
• A compelling gamification experience can trigger real and powerful human emotions.
• It also helps you create an unforgettable experience for your user, resulting in better user interaction, participation, and satisfaction.
• It could be as simple as collecting points every time you buy coffee which can collectively lead you to a free drink.

Gamification is 75% psychology and 25% technology!

Game Mechanics are elements that trigger certain behaviors. On a digital platform, game mechanics refer to the rules and rewards that appear in the program. These include points, levels, missions, leaderboards, badges, and progress bars. Gamification mechanics determine how users engage with a gamification program and receive feedback on their progress.

Game Dynamics are the emotions, behaviors, and desires embodied in-game mechanics. These include competitive leaderboards, team missions, community feeds, a collection of badges, and surprises when unlocking new missions. The combination of game dynamics and mechanics fosters engagement and motivates users toward habit formation.

Fintech Gamification — Bringing Fintech into Play

People are now beginning to understand the importance of financial literacy and wealth management. To enable them to do this, fintech apps came into existence. Fintech incorporates technology and innovation in helping people and businesses conduct transactions. Since money management is involved, the fintech app experience is usually very monotonous, serious, and boring. This is where gamification in fintech was a game-changer.

Gamification in fintech includes adding gaming elements and mechanics into a non-game solution to improve user experience and provide value to the user. It could be setting objectives, completing tasks, monitoring progress, and then receiving rewards in the form of badges, points, bonuses, gifts, or cash incentives. The objective is to drive users to develop healthy financial habits and reinforce their positive behavior with rewards.

Gamified fintech apps usually follow a “PLB” (points, leaderboards, badges) system to simulate and motivate users to perform actions like saving or investing money and planning their monthly budgets.

Areas to gamify in fintech:

• Encourage savings

• Promote financial literacy

• Ensure finance management

• Gain customer insights

eCommerce Gamification — Revolutionizing The Shopping Experience

Gamification in eCommerce is the inclusion of game-like features in the eCommerce app or website to make the shopping experience more fun and entertaining for its users. If the customer enjoys the app experience, it will increase user engagement, retention, and satisfaction. It also boosts sales and attracts new customers to the brand by using different motivators, both hidden and visible.

Elements like points, badges, leaderboards, and offers incentivize customers to share this with friends and family. Customer “bragging” about their winnings helps increase word-of-mouth marketing and motivates others to join the eCommerce brand.

Areas to gamify in eCommerce:

• Boost customer loyalty

• Minimize cart abandonments

• Drive product recommendations

Gamification in Community Engagement for Urban Planning

Can we understand cities better through play? Urban gamification initiatives prove that it’s more fun and impactful to explore, discover, and make opinions about a built environment with a playful twist. And it’s not only about catching creatures in PokemonGo or building cities in Minecraft.

Gamification in urban planning can be triggered by an object in a physical space. A QR code on a ubiquitous street object like a trashcan leads you to a digital space that prompts you to take action — share an opinion, vote, or take part in a digital public consultation. And so enters community engagement.

Here is an example of urban gamification in community engagement that had a tangible impact. The Finnish city of Espoo invited its residents to choose locations for 100 benches via an online map survey. There, residents could also share stories connected with each location. As a result, each installed bench had a QR code leading to a webpage with these stories. In this way, urban gamification fosters a sense of community and shows residents how their choices and stories visibly affect the environment.

Indeed, gamification can become one of the communication and engagement tools in urban planning. Some elements (like mentioned badges, scoreboards, and so on) can be used to reward residents for participating in consultations and voting. But these tools mainly influence residents’ extrinsic motivation — and not for too long.

As a planner, you can apply gamification design principles to your digital community engagement activities. With Maptionnaire, residents can engage in gamified budget allocation, scenario resolution, voting, and space design. This type of gamification helps residents better understand the planning process and make more informed decisions (check this webinar for more details).

Areas to gamify in Community Engagement:

• Raise awareness about planning initiatives
• Stimulate a better understanding of a specific planning project
• Build scenarios to estimate the effects of planning decisions 
• Encourage better decision-making with gamified budgets and resource allocation

3 Gamification Pitfalls and Tips to Avoid them

#1 Lack of User Research

Research is the foundation for designing strategies. Implementing gamification without proper research is a big pitfall. If you don't do adequate user research, your gamification strategy will almost certainly be flawed. Finding your target audience's fundamental requirements and goals should become the primary motive for conducting user research.

Tip

You must understand your users, their objectives, and what motivates them. To use gamification to engage your users more deeply, you must first determine the reasons behind your users' behaviors.

#2 Dependence on Extrinsic Motivation

Extrinsic gamification won't last very long if earning rewards or reaching the top spot on leaderboards are the only primary motivators for users to engage with the app. For these, you need to add new rewards if you rely on extrinsic motivation constantly. Users may lose interest and rapidly become intrusive as the novelty wears off because extrinsic motivational factors are only so influential for some time.

Tip

Users won't use your app again once they've won all the rewards, so give them something to look forward to. Include intrinsic rewards in your gamification plan as well; this is essential.

#3 Prioritizing Rewards Over Results

Your gamification strategy does not revolve around rewards. By selecting prizes, users run the risk of prioritizing rewards above results. They only serve as one of many motivators to assist your users' achievement of the intended outcome. Placing rewards above results is one of the most frequent gamification mistakes.

Tip

Prioritize users' overall learning and benefits of using the app. Incentivize participants with badges or awards when they complete a task or show that they have mastered the target skill set.

Your Takeaway

1. Gamification is a powerful strategy, especially when it comes to the world of business. After all, who doesn't like to be rewarded? But what exactly is Gamification? And how can you leverage it to make your business more successful?
2. The truth is that Gamification can take many forms, depending on your aims and objectives. For example, increasing customer loyalty by encouraging return visits is one reason you might use Gamification in your business while improving your sales go-to-market strategies can benefit from games with cash prizes.
3. Gamification works best for businesses that solve meaningful problems, like saving time, money, and energy and creating a better urban environment.