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How Consumer Tech Companies Use Gamification

5 key insights to boost adoption, growth and retention for your next startup


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Varun Rustomji

3 years ago | 5 min read

Gamification is broadly defined as applying game mechanics to non-game environments like websites and apps. The term “gamification” was coined in 2002, but the concept dates back further.

In this post I am going to focus on the game mechanics that prominent Consumer Technology companies use to boost adoption, growth and retention among users. Mechanics help in creating rules and feedback loops that hook customers and keep them engaged. Let’s analyze these mechanics and understand how to use them effectively.

  1. Points

Points are used by companies in many different ways but the primary purpose is to reward users for engaging with the product. They can also be used to indicate status, identify high priority activities and purchase real or virtual products. Let’s analyze some example for better understanding.

Points can be used strategically to change consumer behaviour and the way they interact with a company. Starbucks for example, wanted customers to order and pay through their app instead of ordering in-store. In order to achieve this goal, they started awarding points to customers who ordered via the app.

These points could then be redeemed in the form of free food and drinks. They also wanted consumers to order from Starbucks more often so they started awarding 2x points to customers who visit the store twice in the same day. This strategy was so successful that by the end of 2017, 30% of US transactions were paid from their app. You can read more about it here.

Source: Starbucks

Points can also be used to build brand loyalty and customer retention. Uber is a great example of a company that used point to build brand loyalty in two extremely crowded sectors.

Uber wanted users to use their platform over competitors so they gave users points every-time they spent money on Uber and Uber Eats. Other apps could do the same but since Uber provides ride sharing and food delivery, users can gain more points and spend them on either of the services.

Key Insight: Use points to incentivize behaviour that you want to promote.

2. Badges

Badges are used to help users get acquainted with a platform and/or demonstrate mastery over important tasks. Badges are visual indicators of achievements or accomplishments that players can unlock over times. Many applications also allow users to unlock badges with the points that they have collected so far. Let’s look at some interesting examples:

Khan Academy is a non-profit organization who’s mission is to provide quality education to students around the world free of cost. The company uses gamification extensively to keep students interested and engaged with the subjects.

They use badges extensively to motivate students and keep them excited about learning topics like algebra and calculous which can get very monotonous in a classroom settings. Duolingo is another app that uses badges along with other game mechanics to encourage users to learn new languages.

Key Insights: Use badges to promote discovery and reward mastery.

3. Leaderboards

Leaderboards allow users to compare their skills and achievements with others on the platform. They make collecting points and badges more meaningful and add a social aspect to the platform. They can be used to increase retention by promoting people to compete with others and spend time improving their skills.

Fitness apps use Leaderboards to keep users motivated and make working out more competitive. Fitbit has a new app where users can share the number of steps they took in the last 7 days with their friends.

This promotes healthy competition and makes people walk more than they otherwise would have. Peloton also has leaderboards to keep people motivated.

Source: Fitbit

Key Insights: Use leaderboards to encourage healthy competition.

4. Variable Rewards

This might not be as intuitive as the other mechanics above but it’s probably the most powerful tool employed by companies today. Nir Eyal, a two time founder and investor says, “variable rewards are one of the most powerful tools companies implement to hook users”.

He explains this idea further in his excellent blog post. The easiest way to understand this phenomenon is by understanding how slot machine work.

In case of slot machines, you pull a lever to win a prize which can be generalized as performing an intermittent action in the hope of being rewarded.

This creates a “ludic loops” or repeated cycles of uncertainty, anticipation and feedback — and the rewards are just enough to keep you going.

Photo by Benoit Dare on Unsplash

This is one of the primary mechanics that Facebook leveraged to become the most powerful social media company in the world.

The pull-to-refresh and infinite scrolling mechanism on our news feeds are similar to slot machine. Consumers cannot know when they will be rewarded, and they generally don’t find anything interesting but that’s precisely what keeps them coming back.

You can read more about how Social Media companies use variable rewards here.

Key Insights: Use Variable Rewards to keep customers guessing.

5. Streaks

A streaks refers to doing something daily without missing a slot. Streak is an extremely effective tool used for building habits. One of the biggest issues most startups deal with is churn which means people use the app once and never come back. Streaks are a great way to minimize churn by compelling users to use the platform daily.

Many productivity apps like Habitica and Habit List use streaks to help users build healthy habits. The power of streaks in this context is turning any activity into a game. Even though we might start out with the intention of simply completing a task, our motivation can soon shift to merely keeping the streak going.

Source: Better List

Snapchat uses streaks better than most consumer app. In Snapchat, when two friends have been sending Snaps to each other every day for more than three consecutive days, it’s a streak. A little flame icon and a number next to a particular contact count how many days the streak has gone on for.

Longer the streak get’s between two users, the more pressure there is to keep it going. This feature has been so successful that many parents are worried about how obsessive teens get about maintaining streaks.

Source: Business Insider

Key Insights: Use streaks to build a habit.

Key points to remember in order to use gamification effectively:

  1. Gamification alone can not make a product successful. However, it can help a well designed product gain more users and keep them engaged.
  2. Different game mechanics accomplish specific goals as explained above. It is important to choose the correct tool for the goal you are trying to achieve.
  3. Gamification, like most technologies can be used in harmful ways like the Facebook example mentioned above.

With great power there must also come great responsibility.

Originally published on medium.

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