Gamification in CRM: More than child's play?

If you remember Al Pacino and Jack Lemmon in the 1992 film Glengarry Glen Ross then you will know that gamification is scarcely new to the world of business. The jaded salesmen are forced to make a game out of converting leads into orders, and told: "First prize is a brand-new Cadillac, second prize is a set of steak knives, third prize is you're fired".

Thankfully, however, the role of games in business has come a long way since then - as also, one hopes, has employee engagement. Much of that progress is down to developments in technology, first with the runaway success of video games that captured loyal followers among adults as well as the young. That following has continued to grow in line with the sophistication of games and devices, for example the development of interactive, multi-player, touch-sensitive and motion-sensitive features.

More recently tablets, smartphones and social media have contributed powerfully to the spread of games for consumer entertainment. But what is now gripping the imagination of people in many sectors of the economy is the use of gaming tools and techniques in a business context: gamification. The logic is straightforward. If people in their private lives enjoy competing, participating with others, winning rewards and gaining recognition, then they will also do so in their economic roles as employees and consumers.

As with all innovations, some are cynical, equating game-playing with time-wasting. But respected analysts Gartner think otherwise: they point to the success of companies such as Marriott and Omnicare in harnessing the power of gaming, and predict that two years hence over 70% of Forbes Global 2000 organisations will have at least one gamified process.

Already companies large and small are reporting impressive – and quantified – results in applying gamification to key elements of CRM – customer acquisition, loyalty and engagement, for example, helping create the e-world equivalent of word-of-mouth advertising. They are also using insights gained from using gamification techniques to address pain points in core CRM processes. Gamification can also yield a rich fund of data on consumer behaviour, allowing marketing and website content to be personalised, improving interaction and sales. Cloud-based gamification allows enterprises to widen their reach and make changes more real-time – and more relevant to consumers and employees.

Korean giant Samsung, in the headlines recently for reputedly beating Apple in the smartphones market in sales volume and coolness of image, was an early adopter of gamification in CRM. It already had a great website – but knew that too many people visited the site once only, and never made a purchase. And too many paying customers failed to come back for more. Then, working with gamification experts Badgeville, they launched Samsung Nation, a new social loyalty programme with classic game-playing features – leaderboards, learning activities and loyalty points, for example 500 points for registering a purchase, 100 points for providing a question for the website FAQs, 300 points for providing an answer.

The results in little over a year have been spectacular. The ratio of registered to anonymous users has increased by 47%, the number of customers providing answers to FAQs has risen ten-fold and – most important of all – the conversion rate of website visitors to purchasers has risen six-fold.

Gamification is also proving its power to galvanise customers in the world of healthcare. US company GymPact uses smartphone games to motivate and reward fitness-seekers under its self-explanatory tagline:Conquer excuses with $$$ and get your butt to the gym! The company uses GPS technology to track its users to the gym. Members who meet their workout goals win cash, much of it from GymPact members who pay penalties for failing to exercise as promised. After huge and mostly highly positive publicity in the New York Times, CNN, ABC News and other media, GymPact appears to be going from strength to strength based on its games-playing approach, one which has also fostered a strong sense of community and much social interaction among its customers.

The UK public sector might seem an unlikely arena for experiments in gamification, but the Department of Work & Pensions is forging ahead with a plan to drive innovation via greater collaboration with its own employees. The move is seen by many as a harbinger of using gamification as a CRM tool with the DWP's customers too. The Department launched Idea Street two years ago to add interest and excitement to a longstanding, old-fashioned suggestion scheme that had never really delivered much. Post-gamification, staff can earn 'DWPeas' – reward points for coming up with a new idea, or helping develop another employee's brainwave. Again, results have exceeded expectations, with 6,000 staff actively engaged and some 60 proposals now implemented by DWP and on track to save more than £20 million of public money.

As these examples show, gamification uses natural human impulses - to interact, participate, socialise, have fun and compete – to win share of mind with customers and employees. The interesting aspect is that it targets behaviour as the key lever to improved business performance. Many commentators have pointed out that gamification makes business fun. Perhaps, but what is far more significant – as many companies are discovering – is its power to impact key performance metrics, make business more profitable and build the Digital Advantage.