CRM Gamification to Engage, Reward & Retain Customers

Gamification has crossed the chasm and will continue to increase in importance over the next few years. But those who sit on the sidelines may be asking, what is it?

A reasonably consistent definition is: the process of using game thinking and game mechanics to solve problems and engage people. As a practical matter that also means using CRM software infused with game thinking and mechanics to achieve your gaming ends.

I first got interested in this technology as a judge in the CRM Idol competition last year when some of the companies in the competition showed how they were gamifying CRM processes, especially marketing and selling.

Much of what I've learned about CRM gamification isn't new but an evolution of ideas that have been percolating about as long as social networking. Another fountain of source material goes all the way back to some research conducted at MIT in the 1980's and 90's by Eric von Hippel and published in his book, Democratizing Innovation. But von Hippel focused on learning about the link between customer happiness and loyalty when, for example, a company reaches out to the customer in various ways. Trust develops and often customers become more loyal to brands.

Many CRM products today offer multi-channel capabilities for exchanging ideas with customers and this bi-directionality is essential in gamified applications. In a sense gamified apps might simply be considered as having better reward systems than typical dialog systems, which are themselves a leap beyond conventional CRM and ecommerce.

Latter day gamified solutions seem to build on von Hippel's research using explicit techniques that cause people to engage with a product or a brand for rewards that are often measured in points. Nothing new here, by this simple description your credit card's offer of reward points or miles achieves the same thing. But the intensity of the experience and thus the bond in a true gamified relationship is much greater.

Think of dropping a coin in a slot machine or playing World of Warcraft and you have a better example. There's enough research that describes a link between the gaming act and the release of a tiny amount of dopamine in the player's brain.

Dopamine is one of the main neurotransmitters and it participates in the reward cascade. You feel good when you win at a game or receive some kind of reward or badge. But the dopamine high is fleeting and it is easy to develop a craving for the stuff, which is what drives many people to put a second or fiftieth coin in the slot.

If you can make the interaction fun and rewarding and thus build loyalty there is less need for more draconian customer or account control. Games can get customers to do your bidding — to a degree — without coercion. In this context gamification has at least two big benefits. First, it can drive loyalty and conversely reduces churn. But understand, the loyalty is not driven by some addiction to dopamine. Rather, the customer playing the games sticks around long enough to provide a lot of data that a smart vendor can analyze for patterns.

Second, and closely related to the first point, no company and no product is always going to be a perfect fit for every customer but gamified systems make it a lot easier to find customers on the road to unhappiness and intervene very early. So the gamified application at least has the potential of capturing data to figure out what the customer wants and to capture attitude data as well.

While there is no such thing as 100% in interpersonal interactions, gamified CRM might get a company much closer to a churnless customer base. There are many implications to churnlessness including figuring out how a new product penetrates the market. But a customer base without churn could also evolve to have much less friction too. I think it's reasonable to say that loyalty generated would be a by-product of generated trust and in a trusting relationship there is less friction of all kinds.

The idea of frictionless relationships is a long way from the current use and possibly just one of many unknown but knowable side effects of this new idea. The gamified CRM path is multi-faceted and has a powerful potential relationship to CRM and other front office technologies. It will likely change how we do business and it is certainly an area that deserves more attention and study from the CRM community.