The Integrator recently interviewed Jeremy Density, co-founder and managing partner at Imagin3 Studio, an innovation advisory firm specializing in driving digital innovation across various sectors such as Web3, NFTs, Community, the Metaverse, and Artificial Intelligence.
Jeremy, who co-authored the book “Virtual Economy” with Dado Van Peteghem, discussed the potential developments of the next decade while grounding them in present realities. In the following questions, we explore the concept of gamification and its potential applications across different industries in the region.
Explain to our readers what the gamification of business entails, including its various applications across industries?
Gamification traces its roots back to the gaming industry, which has experienced remarkable growth over the past two decades. It’s intriguing to observe how individuals across different age groups, from children to adults, immerse themselves in gaming for hours, drawn by the engagement and interaction it offers. This phenomenon is attributed to gamification, which enhances engagement, interaction, and loyalty among players. Consequently, there’s immense potential for businesses to leverage these techniques to foster better customer engagement, an aspect many brands currently struggle with.
Gaming is one of the most successful and fastest-growing industries with a report suggesting that young Americans spend 12 hours a week gaming. For example, Roblox boasts 70.2 million active daily users who spend on average two and a half hours per day on the platform, which shows how gaming has evolved from a hobby to a way of living, connecting, and consuming.
Those new generations of customers are getting accustomed to fast-paced, increasingly engaging, and rewarding experiences, which is what they expect from the brands they consume. In our book, The Virtual Economy, we talk about the Magic Triangle and how brands must create value by focusing on building better EXPERIENCES, LOYALTY, and COMMUNITIES. This is exactly what games are about.
How can customers interact better with brands?
The biggest impact of gamification for brands lies in the ability to nurture more loyal customers. Loyalty programs have historically rewarded customers transactionally, based on their referrals or a set number of purchases.
A great example of a brand leveraging gamification techniques to grow a loyal fan base is Starbucks. Starbucks introduced a sophisticated points-based and benefits system through its Starbucks Rewards app, akin to some of the most successful Triple-A games. This digital alternative surpasses traditional loyalty cards, fostering customer loyalty and contributing significantly to the company’s revenue.
As a result of their successful loyalty program shift, Starbucks reported a $2.65 billion revenue increase, with over 25% growth in membership, and 40% of sales at US stores attributed to the membership program.
Starbucks leverages this approach to enhance customer interaction and feedback collection, offering incentives for completing surveys. This gamified strategy not only entertains users but also provides valuable insights to enhance overall business operations.
Going even further, Starbucks introduced Starbucks Odyssey in late 2022. This new layer of the loyalty program offers members the chance to participate in Starbucks “journeys”, such as watching a video on the history of the brand or trying their limited-edition Christmas drink, and rewards participants with “digital stamps”. Those stamps are either redeemable for unique benefits -one of them a trip to Costa Rica to visit a coffee farm, or tradable with other members on a marketplace. More than $200,000 of sales have occurred on the marketplace between members, with Starbucks grabbing a 7.5% royalty fee, making Starbucks Odyssey one of the first “loyalty-to-earn” programs, delivering direct benefits to members, and the brand.
This innovative approach not only enhances user engagement, loyalty, and customer experience but also serves as a creative method of collecting and utilizing data for continual improvement.
However, gamification is not only limited to increasing customer engagement and building more brand loyalty but also to improving internal operations.
Why brands are introducing gamification into their business?
Engagement in the workplace has increasingly become a challenge for brands and companies. A recent Gallup survey showed that “active disengagement” from employees has risen each year since the 2020 Covid pandemic. Only 32% of respondents felt engaged in their work, and 18% felt actively disengaged.
This lack of engagement has significant consequences for companies, whether through a lack of productivity or through increased recruitment and training costs derived from a higher employee turnover rate. Gamification could be seen as an appropriate solution to solve this problem.
It appeals to our competitive nature and fosters deeper engagement. Gamification integrated into business practices introduces a competitive and fun aspect that motivates professionals to outperform colleagues or their competitors within their industry.
As an example, gamification can be used to create more effective employee training programs. Training programs are loaded with information that usually takes a while to be completely acquainted with.
Companies can learn from popular Triple-A games such as Call of Duty and develop a leaderboard and badge system that encourages employees to finish modules and learn new skills that will benefit them. In other words, allow them the ability to “level up” their stats, gain XP points, and be rewarded when they complete certain classes and certifications.
Aside from the retail sector, in which other industries do you envision the application of gamification techniques?
The application of gamification techniques extends to virtually every industry that interacts with customers. Whether it’s retail or any other sector offering products or services, there’s a universal need to enhance customer engagement and loyalty. Therefore, gamification is pertinent for both business-to-consumer (B2C) and business-to-business (B2B) enterprises seeking to bolster customer engagement through innovative loyalty programs and engagement strategies.
How do you anticipate the integration of in-car gaming experiences to influence both the automotive and gaming industries?
The prospect of in-car gaming experiences impacting both industries is intriguing. While it’s true that current in-car gaming experiences, like those in Tesla vehicles, offer entertainment during stationary moments, it may take several years before such features significantly influence the gaming industry. The automotive sector must address various challenges, particularly in self-driving technology, before we witness substantial impacts on gaming. However, once these challenges are overcome, in-car gaming could liberate countless hours spent commuting, potentially transforming how individuals engage with gaming and other activities while on the move.
Looking ahead, do you foresee car companies launching cars through gaming platforms, and how might this impact automobile enthusiasts?
Car manufacturers, much like luxury brands and retailers, recognize the importance of fostering emotional connections with customers, especially younger generations. They aim to avoid being perceived as mere commodities and instead seek to create meaningful engagements. Understanding that gaming platforms offer rich opportunities for emotional interaction; car companies are increasingly leveraging these platforms to connect with younger audiences and cultivate lasting brand loyalty.
How do you envision the future of gamification in both the workplace and consumer-brand interactions, considering the influence of Generation Alpha and emerging technologies like VR and AR?
Gamification draws heavily from the principles of Prospect Theory, a behavioral economic concept highlighting the motivational power of small incentives in situations with known probabilities of outcomes. Individuals, fundamentally motivated by the prospect of rewards, find their behaviors influenced by gamification elements, offering brands a cost-effective tool to shape consumer engagement and commitment.
Beyond Gen Z, Generation Alpha is the only generation born into the internet and gamified experiences. Growing up playing games such as Roblox and Minecraft that leverage reward systems, Generation Alpha anticipates a similar dynamic in the workplace, emphasizing gamification’s lasting impact and relevance.
With the latest technological advancements, such as VR and AR, gaining popularity in workspaces with a generally young workforce, gamification will continue to shape companies and allow customers to connect with brands at a more relatable level.
