Gamefication Effects On Consumers
Introduction
“The future of marketing is games, and it starts today”. (Zichermann & Linder, 2010) Thanks to the development of technology we have seen over last decade has made it possible for us to do things we could never imagine to. Nowadays companies can reach out to customers via their smartphones and make them a participant in their everyday purchases.I remember encountering gamification for the first time back in the summer of 2012 during a vacation with my family in Florida. I was sitting there in the couch watching the tv when this Nike commercial came up, It was about a product called fuelband.
The thing with the fuelband was that it is a bracelet that tracks user movement. Players connect their bracelet with the Nike+ app and could then see statistics such as average heart rate, steps and calorie count in the app.The thing where gamification comes in to picture is that the app challenges you every day with different missions. The user is challenged to earn a specific amount of Nikefuel to move up to the next level while at the same time being played against the clock.After each mission Nike athletes such as Neymar and Calvin Johnson Gives you feedback and suggests Nike products that would help the player move on to the next level.After that I was hooked on this amazing way of doing marketing.
Background
Gamification has been around since the 70's but its only in the last couple of years the promotion method started to grow increasingly. This is thanks to the smartphones we carry with us who are connected to the internet 24/7 which makes marketing in terms of reaching out to customers and making them involved easier than ever before. With the flick of a switch the customers gets informed about ongoing promotions, sales and gets notifications about how many points they can earn if the purchase a certain product. All of this in the blink of an eye.In my opinion gamification is a very interesting and fun way of doing marketing. “Gamification applies game-related elements to non-game contexts” (Basten, D. 2017)Its goal is to improve consumer engagement and trigger its inner competitor and make them buy more, the more money spent the more rewards the customer get. rewards typically are in the form of points, badges, levels or discounts.In this thesis I aim to clarify how the basics of gamification works and how it affects the consumer physically.
Problem Area
The important thing for a company to survive is sales. The competition is tougher than ever so the promotions and advertisements is the key for its survival.In this report I have taken a deeper look at the latest non traditional promotion method called gamification. Does it really work or is just a way for consumer to have some fun with their products and play games? Does it really make customers more loyal and make them spend more, compared to the other more traditional marketing methods?
Method
This thesis is made using secondary data such as books, journals and online articles found on the internet.In this particular thesis we were restricted to the use of secondary data only.2.1 ProcedureGamification as a way to do promotion is still relatively new, so research on the subject is still very limited. I was still able to find some good sources online and some research were found and collected from third party sources found in Mälardalens höskolas database and in books.
Selection
Since Gamification is a rather new subject research and facts are pretty restricted and hard to find. I have based the information gathered on sources that are legit and are backed up by established names in this segment. For example Gabe Zichermann is a well known name in the gamification field and has written several books and articles about the subject.I also always check that the source chosen is up to date and has relevant data in it, even though the source sometimes may be two or three years old the data and facts is still relevant.Mälardalens Högskola is a good example where it has provided me with several different scientific journals giving me good information and a lot of relevant data.One article that has affected my work a lot is found in the school database and called (Robson, Plangger, Kietzmann, Mccarthy, & Pitt. (2015). Is it all a game? Understanding the principles of gamification. Business Horizons, 58. Many other sources have been used and will be listed in the end of the thesis.
Method criticism
As said before since the marketing method is rather new research and articles are very limited, because of this the information and data in all the sources is pretty much alike. This makes it rather easy to eliminate the few sources whose data is not up to date and facts are wrong.Since this is a thesis based on secondary data i have been careful and only used facts that are backed up by good sources.I don't think it is much to criticism here, expect the lack of data but in a few years when this method has grown even bigger that won't be a problem anymore. If we would have been allowed to use first hand data I would had done some surveys to hand out and let the people in the class fill in some questions about Gamification.The secondary data found have worked fine though and I don't see a lot to criticism.
Theoretical framework
This part of the thesis aims to give a better understanding on how this type of promotion is implemented and affects us in our lives. To analyze gamification I will use Maslow's hierarchy of needs (Maslow, 1954).This theory describes human motivation and it will therefore fit in very well in this subject.the hierarchy of needs is often described as a pyramid (see figure 2), where the largest of needs for example food, breathing water is is in the bottom being the biggest part of the pyramid.While the smallest part such as morality, creativity and spontaneity are in the top.(Figure 2) Physiological and safety: Gamification does not affect the players physiological needs by affecting their shelter, air and food. In games people feel safe, there is nothing that can harm them, they can not get robbed they can not hurt themselves and the laws of morality don't apply.The games can however play on the brain's need for physiological needs, many mobile apps do this by delaying how many actions a player can make during a certain time frame. The player is encouraged to pay if they want to reduce the delay and keep playing.
Love
A lot of the companies who uses this type of marketing often implements a function in the app where the users have the chance to interact with each other, such as forums, chats or scoreboards. This allows the right player to feel a connection to the game.Applications with this type of social possibilities often require teamwork and therefore will it will attract the “social” player and it will motivate the player to become much more active in the game itself.one example of this is the Nike+, once you have completed your workout you could post it to your feed in the app letting your Nike friends see it and you could also post it to your Facebook and Instagram making it possible for people to comment and like your workout.In 2016 Nike launched an update on the app making it more difficult for people to share their workouts. This made the users furious and the ratings of the app plunged (Welch, 2016).Now the apps facebook site has been inactive for a year.What Nike did not realize what that the users who played the game where there for the social part who appealed to our love/belonging needs and as soon as those features disappeared the users did as well.
Esteem
We as human beings always feel good when we develop and accomplish things it makes us feel great and gives our self esteem a boost. Gamification uses this by challenging us in different kind of ways. When we accomplish this challenge we receive some kind of achievement, it could for example be that we spent a certain amount of money at store in the demanded time frame and therefore got some kind of reward for it.The accomplishments cannot be too easily achieved otherwise it will seem hollow and be worthless for the player.What is important is for the company is to have many different rewards at different values based on the completion of different challenges. This makes players of all skill levels to be more active and progress to accomplish challenges, and therefore it will apply to a bigger scale of players.“A well-designed game is a system in which players engage in an abstract challenge, defined by rules, interactivity, and feedback that result in a quantifiable outcome often eliciting an emotional reaction” (Kapp, Karl M. 2012).
Like quoted above this is what the Nike+ app did so great once again, When people accomplish different tasks they got a reward for it that they then were able to share with their friends through social media where friends could like and give comments on how impressed they were wich made the players feel good.This filled both the love and esteem stage at the same time.Self-actualization: Can be divided into three groups depending on what the purpose of the player playing the game is.We have purpose needs, where the players play because of the reason that they think they are doing something good. We have Autonomy needs where the player is playing because of the desire to learn and explore new things often making the player create things in or for the game, this appeals to the players creativity.
Mastery needs is the most common and well used way of doing gamification, it makes the player want to achieve more both for social and personal reasons. “the player’s motivation ultimately drives the outcome. Therefore, understanding player motivation is paramount to building a successfully gamified system”(Zichermann & cunningham, 2011)Companies uses this method because customers always wants what's rare and uncommon, making loyalty programs that gives you VIP status very attractive.Like Zichermann and Cunningham stated the companies need to understand what motivates the players. In many cases the players motivation is the aim for status, we see for example airlines do this all the time, you can be a silver member, gold member or even a platinum member. You get points and status for your flying when being loyal to one airline or one alliance.
It triggers our inner competitor and makes us always wanna move up to the next level and that's exactly what the companies want, and in this case the airlines have found what motivates and drives people to spend a little more or be loyal to one company to earn that attractive status. You're always meet with a challenge to move up and the way they are doing that is by contacting you through texts, email etc and letting you know how many more points you need to earn to move up to the next level. Lower down in the email they give you some great examples of places you should travel too to receive the required amount of points.Worst case scenario is when the company give you a notice that you have been inactive for too long so they will soon remove your status.This is the where the physiological side of gamification comes in. people work hard to level up and build a consistent image of themselves because change is mostly seen negatively.
So customers who reach the VIP stage is going to fear losing it so the consistency principle pushes customers to maintain their program status in order to preserve their image.So does gamification really work? Gamification works because it triggers emotions that are linked to something positive, like when you get a reward for completing a challenge. And it's all up to the player, the player is in center and have the control, the control makes us feel safe. players can most often keep track of their progress and playing is simple and easy, often played from your smartphone. Gamification triggers dopamine, getting rewards, leveling up, or achieving something it all gives you that little rush.Gamification really triggers emotions and that's why we use it both as consumers and companies. “Assuming that players will not continue to play if they do not enjoy themselves, creating player enjoyment should be seen as the single-most important player engagement goal for gamification” (Robson, Plangger, Kietzmann, Mccarthy, & Pitt. (2015).
This is the crucial part, the game needs to be challenging and yet not to hard.if the game is to hard and the challenges not achievable the players will not enjoy playing it and then it would ad no value to the companies. Having players who enjoys playing the game is the single most important factor for the companies to be able to profit from the process. Does gamification increase customer loyalty and sales? It does, people are competitors some bigger than others. Receiving points and having a scoreboard where you can see whos in the lead makes us wanna achieve more. Companies who has loyalty programs and games makes the app or points only work when we shop from their specific brand. One good example would be the Swedish gas stations where if your are a loyalty member you get a certain discount on fuel and you get point of everything purchased on your loyalty card and you can keep track on how many points you gained and how many more coffees you need to buy to receive your free one. you get points on everything except for things purchased at competing gas stations.
And people will be loyal since they don't want to lose the chance to earn points and at the same time they dont want to miss out on their discounted fuel.Gamification is not only good for the companies it can also be very good for us as consumers. the benefits from gamification are many for example when you buy something online you get point for every purchase, once you reached a certain level you get a reward or a discount. You are also given points when giving feedback and sharing your latest purchases on your social media making it favourably for the consumer to do so. By interacting with the companies trough games and applications that they want us to use we can make good deals that makes it profitable for us in our everyday lives and might even save us some money.
Summary
My intention with this thesis was to get a better understanding about how gamification works and affects us, and how it is implemented in our lives.I have gathered all the relevant facts in this topic and relevant to my questions and then done a overall summarization and written them down.I have gained a lot of new and interesting knowledge about the subject. By using Maslow's hierarchy of needs I got a good overview on how it affects us as consumers and how the companies try to use the different factors explained earlier in the thesis to get the customers attention and motivate them and make them keep playing the game.In the future I believe gamification will only become more and more common and companies will pretty much do a game out of anything.
