Exploring the serious business of consumer products game-based marketing

Exploring the serious business of consumer products game-based marketing

In its infancy, advertising was an interruption. Ads were part of the price of watching TV or flipping through a magazine. More recently, brands have experimented with ways to make their messages desirable in their own right, via social engagement and branded content.

But at a Social Media Week event at the Time-Life Building in New York City this month, Gabe Zichermann argued that in the future, brands will use game mechanics to go beyond just getting a customer’s attention. Instead, they will make themselves a part of the rhythm of their customers’ lives. Games are “a process, not a destination,” Zichermann argued.

Zichermann said he defines “gamification” as the use of game mechanics and game-based thinking to solve problems and create user engagement. But more broadly, he explains, a solid game-based marketing program is really just the final incarnation of the loyalty programs businesses have been using for almost 200 years.

In the first phase of loyalty programs, customers were given free merchandise for buying a set amount of product. Think of those cards that promise you a free pizza after you buy nine pizzas at the regular price. These are still the most common form of loyalty program, he says, but they’re not the most effective. They tend to offer incentives to customers who don’t need them. A customer who buys nine pizzas will probably come back for a 10th whether it’s free or not, he argues.

I don’t know if that’s true for all goods and services — heavily commoditized products would seem to be a likely exception — but I think he’s probably on to something when he says that businesses give away more stuff than they need to, especially if you buy his argument that other loyalty incentives are more powerful and cost-efficient.

The next phase of loyalty programs offered customers a points-based rewards system, such as credit card reward points or the old S&H Green Stamp program. These systems create virtual currencies that can be traded on private markets for certain goods — but their cash value is never precisely defined, he notes. By getting someone to buy into a private economy, you create a more lasting bond that goes beyond scoring that free pizza, he argued.

Next came status-based systems, such as airlines frequent-flier clubs, that convey privileges. The value of a privilege can be even harder to calculate, he notes, because different people in different circumstances might assign different values to not having to wait in line. But Zichermann argued that access to perks can be a more powerful motivator than material rewards because they turn customers into members of an exclusive club — something they can’t readily buy through other channels, he said.

With gamified loyalty, status takes the place of actual rewards, he said. Players are aiming to amass virtual rewards that have no real world value, but do possess personal value. Sometimes, that reward is a virtual item, but it could also be the sense of accomplishment that the player feels. The best games keep the player involved enough to ward off boredom, but not so involved that the activity makes them anxious — a state known as “flow,” Zichermann said. I suspect anyone who has played a really addictive game will recognize this state — it’s the compulsion to play just one more turn without even thinking about it.

Zichermann explained that in old loyalty paradigms, businesses exchanged rewards for purchases in a transactional, linear fashion. Gamified marketing is different because its based on a cyclical model in which a player sees progress toward a goal and that progress increases their engagement and makes them more receptive to an organization’s message. But you can’t use virtual rewards as a bandage to cover up a lousy set of game mechanics or a shoddy product. It’s not enough to slap on a Foursquare-style badge mechanic and call it a day, he said — drawing murmurs of approval from the crowd and plenty of emphatic agreement via Twitter.

Creating a gamified system requires understanding your customers’ desires and pairing them with mechanics that tap into those motivations in a way that also serves the brand message, he said. Zichermann then pointed to the work of British researcher Richard Bartle, who divides gamers into four distinct categories based on their motivations for playing:

  • Achievers: Want to win a game as thoroughly as possible.
  • Explorers: Want to see everything the game has to offer and experiment with it as much as they can.
  • Socializers: Want to meet and cooperate with other players, with the game serving to facilitate that interaction.
  • Killers: Want to win the game, but they also want to see others lose. Zichermann argues that even these players can make positive contributions to a game’s community if they are given proper ways to explore this desire.

I suspect that combining brand messaging and player desires in a coherent way will remain a stumbling block for many brands for some time. Very few brands have developed games that serve their message in an organic way — as opposed to just creating product-placement opportunities. But that doesn’t mean it’s impossible.

The idea that people would voluntarily watch ads was laughable until the infomercial came along — and the idea that customers would want to convince each other to watch ads was every bit as ridiculous until the rise of branded viral videos. Placed in that context, the idea that we’ll someday itch to play games that reinforce a relationship with a brand doesn’t seem so far-fetched.

What companies and organizations do game-based marketing well? What stumbling blocks do great game-based programs need to overcome?

Image credit: kencameron, via iStockphoto


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