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How To Nurture User Engagement Through Gamification

badgeville gamification

by Anand Srinivasan, founder of LeadJoint.com

There are essentially three challenges when starting a business – finding capital, finding customers and making money. Among these, finding customers and money is a recurring challenge that exists throughout the life-cycle of a business. One way to make these tasks less challenging is by building a loyal customer base. When customers keep coming back, the task of making money becomes less challenging.

So how do you make a customer loyal? There are several ways to do this, but one common theme in all these different strategies is building user engagement. When customers engage better with your business, they become more comfortable using your product. This increases the cost of switching to a competitor and as a result brings about loyalty.

As it is with building loyalty, there is no one way to build engagement. But as Daniel Goh pointed out in one of his earlier presentations back in 2010, gamification has been one of the most prominent ways to grow over the past few years. This is a strategy that has been successfully used by social networks, ecommerce stores and even enterprise businesses to drive customer engagement and build revenues.

What exactly is gamification? In its simplest sense, this is the process of rewarding customers for completing tasks that you measure and thus channeling your visitors through a funnel that drives conversion. For instance, an ecommerce store that is looking at higher repeat purchases could offer loyalty points for each purchase that may be encashed over future purchases. When such strategies nudge users into behaving a certain way, it is gamification. Here are some prominent ways to drive user engagement:

Loyalty Points.

Loyalty points may not necessarily be offered only against purchases. It can also be used to reward users for performing activities that help your business. For instance, online buyers frequently look up previous customer reviews before making a purchase. An ecommerce store could thus offer such points for each review that a user submits. Similar points may also be offered for referring new customers, sharing your products on social networks or using certain forms of payment (credit cards over Paypal for instance).

Leaderboards.

Leaderboards are a popular form of gamification in community-based businesses. For instance, message boards routinely carry flairs against community members that point out their “seniority” among the community members. Websites like TripAdvisor that rely on community reviews have ‘levels’ for their various contributors with users contributing higher number of reviews being promoted to their ‘Top Contributor’ status. This public gratification provides users with sufficient incentive to contribute and thus help TripAdvisor meet its business need of aggregating traveler reviews.

Virtual Currencies.

Sometimes, the biggest challenge for a business could be getting users to open their wallet and start spending on their website. This is common for websites in the financial space where amateur users are likely to lose a lot of money due to wrong investment tactics. It is a vicious cycle since amateur users cannot become serious users unless they keep investing which is, in turn, not possible unless the users are convinced about their investment strategies. Businesses in this space regularly offer virtual currencies to their users that they may use on simulated investment games. When amateur users can learn their strategies without losing money, it incentivizes them to eventually move towards opening their wallets. This is also a strategy that is used by businesses with complex user navigation systems to train their users to use their service. This not only helps them educate their users, but also creates a steep learning curve and disincentivizes users who want to switch to competitors.

 

anand srinivasan

Anand Srinivasan is the founder of LeadJoint.com, an online lead generation tool for digital marketing agencies. He is also a part-time marketing consultant and has previously worked with some of the most promising Indian startups.

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