17 January 2024
Dan Taren

Why Gamification Works

Gamification is taking inspiration from video games on how to design a product with human motivations as the core driver of each feature. Gamification is not just throwing aspects of video games that young people play at products and hoping it will result in increased retention. Humans are motivated by a multitude of different factors, one of which is risk-taking. The iGaming industry has done a phenomenal job catering to this motivation – but has done little for other powerful motivational factors. Consumers want to be creative, to have their experience customized, to progress, to be challenged, to share in the experience with others, and so on. These are all experiences that mimic successful video games, and is the fundamental reason why video games are the largest entertainment sector. A successful video game triggers deep rooted human emotions as the core driver for every action, things like progression, mastery, customization, creativity, comradery, and so on. Gamification can be tricky and time consuming to implement into your product, but the results can be substantial. According to a study by Zipdo, gamification can lead to a 50% increase in human motivation, and according to a study by Tobias Wolf, Welf H. Weiger, and Maik Hammerschmidt from the University of Goettingen,“all motivational experiences with gamified services have significant positive main effects on customer commitment and willingness to pay.” In other words, it is clear that gamifying a product can lead to increased engagement/retention and an uplift in revenue, but how can you implement it?

Integrating Gamification within Loyalty

According to the Global Customer Loyalty Report by Antavo, companies with an active loyalty program reduce churn by 65%. Within those, companies with a gamified loyalty program see an 80% higher ROI than a regular cashback program. Meaning, adding a gamified loyalty program or revamping your existing loyalty program to include gamification is a proven way to improve your business. In iGaming, the existing loyalty solutions double down on risk-taking (spinning wheels, betting on airplanes and rocket ships going far, etc) or only use a transactional cashback program to give users any incentive to continue staying on your site. At Scrimmage, we build you a gamified loyalty program that gives your users new reasons to play and differentiates your product from competitors while keeping your costs low. According to that same report by Antavo, on average it takes 16.2 employees to actively manage their dataset’s loyalty program. Instead of paying 16 people to build and maintain a successful loyalty program, use a combination of our features below to materially increase your metrics.

Level Progression – Keeping Users Motivated

Level progression is an essential but misunderstood part of building a strong gamified system. In a study by Dominik Gutta, Tobias von Rechenbergb, and Dennis Kundischa, out of the Journal of Business Research, the team tested if gamification can permanently foster engagement in a community by increasing the challenge of a goal after each subsequent successful goal is reached. They found a positive impact of achieving new goals as long as goals remain subsequently challenging. In other words, giving meaningless levels or tiers for participating is not going to foster increased retention, you must give users goals that they deem as meaningful.

At Scrimmage, we allow companies to customize level up progression in a multitude of different ways. Each level up can be tied to the completion of a user’s specific (and progressively more difficult) actions, unlocking new abilities, ways to play, and items to redeem. Because of this, users are incentivized to progress through the loyalty program to gain more features while feeling challenged and a sense of pride when achieving the next level. In modern video games, level up progression is carefully constructed and results in gamers feeling accomplished when they finally achieve a new level. In iGaming, value is lost by not giving users a sense of accomplishment even when they are losing money. When users lose hope, they lose their willingness to continue playing. According to a study by Andreas B. Eisingerich, André Marchand, Martin P. Fritze, and Lin Dong out of the Imperial College business School and the University of Cologne, the team studied how to enhance customer engagement through gamification. They found, “gamification principles (i.e., social interaction, sense of control, goals, progress tracking, rewards, and prompts) that promote hope and consequently increase customer engagement and digital sales. Furthermore, we find that hope is more strongly associated with customer engagement than the psychological condition of compulsion, which even exerts a negative impact.” Users can lose money and still feel accomplished. If users think they are progressing and improving, they will be retained and stay on your site. According to the study by Zapdo linked above, gamification increases the time users spend on a website by 28%.

Quests – Solving Bottlenecks in your User Journey

Quests allow companies to incentivize users to take actions by giving them a reward for completing the action on top of a sense of accomplishment. A well built quest system can be a powerful tool that can mutually benefit both the company and their user base.

At Scrimmage, we built our quest system to alleviate pain points within an operator’s user flow. Our goal is to incentivize your user base to take the actions you most want them to take. According to the Zipdo report linked above, 72% of people believe that they would be more motivated to learn if their coursework was more game-like and employee training and onboarding programs with gamification elements can increase engagement by 60%. This makes our quest system incredibly impactful for getting users to learn your product through your onboarding process and motivated to get over the hump on processes that typically users get hung up on (verifying identity, linking bank information, first-time deposit, etc). Additionally, our quest system can be used for more than just retention, specifically referral acquisition. According to that same study by Tobias Wolf, Welf H. Weiger, and Maik Hammerschmidt from the University of Goettingen,“ customers are more likely to be engaged with referrals if the tasks deliver ongoing challenges and positive feedback.” We built our quest system to reward and challenge the user at subsequent steps of bringing their friends to your product, and companies have the ability to customize the rewards they are willing to offer their users for each step of the acquisition journey.

With our quest system, companies have a large range of quests they can offer, including:

1. Solo quests – User completes an action on their own
2. Group quests – A group of users (you can group users through tags) completes an action together
3. Time sensitive quest – Quest must be accepted and/or completed in a given range of time
4. Scheduled quest – Companies can schedule as many quests as they want ahead of time
5. Questlines – Companies can group quests together that must be completed one after the other in order to get a reward
6. AI generated quests – Use our AI tool to generate quests for your users based on their tags

Perks – Personalizing your User’s Playthrough

Personalization is a requirement for customers in other industries, but in iGaming products have been slow to give users an experience that feels built for them. According to a study by Mckinsey, 71% of consumers expect companies to deliver personalized interactions and 76% get frustrated when this does not happen. Additionally, 78% of consumers said personalization makes them more likely to repurchase. This is a massive area of potential value creation for iGaming companies who have no way for users to feel like their betting experience is built specifically for them.

Scrimmage gives users a personalized betting experience with our perk system. Our perk system allows operators to give their users rewards in the form of upgradable perks that enhance their playthrough. For example, if you identify one of your users as an NBA fan who places frequent bets on Trae Young, you can reward that user a perk that gives them a 1% odds boost on bets on Trae Young that the user can upgrade for a larger boost over time. This incentivizes more action from the user and makes them feel like this betting product and playthrough is completely unique to them. Operators can create an infinite amount of perks for whatever enhancement that you want to provide your players, creating an incredibly custom experience for every single different type of bettor.

Redeemable Items – Rewarding Different Player Types

Being able to customize the reward you give your users is essential to motivate different types of users. At Scrimmage, we allow for users to redeem the rewards they earned for physical goods (company merchandise, jerseys, etc), digital goods (tickets, coupons, etc) or free bets back to their account. Operators can select which users see which redeemable item and when the user sees it. Operators can link the redeemable item to the user’s level, betting activity, or any other tag. This allows users to stay motivated by progressively getting more enjoyable rewards while operators can target specific users with the right redeemable items that fit their objectives.

Scrimmage & Gamification

Gamification is an incredible way to separate your product from a competitor, and is becoming a requirement of the new generation of bettors. Adding gamification through a loyalty program is an impactful and proven method of increasing engagement. According to a study by Jiyoung Hwang and Laee Choi out of UNC Greensboro and the Hasan School of Business, the team studied whether gamification in loyalty programs has an impact.They found that, “the results confirmed that gamified loyalty programs (vs. conventional ones) increased consumer loyalty toward loyalty programs…these findings support the essential role of gamification in customer relationship management.” The team also found that “the findings of this study suggest that gamified loyalty programs can help companies differentiate their loyalty programs from other conventional loyalty programs.”

Scrimmage can build or revamp your current loyalty program and increase your retention, engagement, and revenue. Integration time is quick, seamless, and we will work alongside your development team to maximize effectiveness and lower the time to integrate.

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