Hearty congratulations to Badgeville’s strategic partner and customer Marketo for their successful IPO this morning! We are very proud to be part of Marketo’s Marketing Nation and also proud to be the technology powering engagement for this vast community.

In an email today, Marketo CEO Phil Fernandez — along with thanking the “Marketing Nation” that includes customers, partners, employees and 27,000 online community members — said, “In today’s data-centric, multi-channel business environment, marketing professionals are being pushed to fundamentally change how they engage and interact with prospects and customers.” We completely agree. Marketo’s online community uses Behavior Platform-powered gamification to achieve this critical customer engagement quite successfully.

Marketo is a rockstar today

Marketo was already finding success with their Community, but they wanted to increase adoption of and accelerate customers to maturity with their software even more quickly. By identifying and rewarding high-value behaviors like asking questions, submitting and voting on ideas, watching videos and more, they drove impressive lift in the daily activities that power healthy, active, engaged communities.

The success of Marketo’s launch today (as of this writing, the rise is impressive) highlights the importance of being to go beyond reaching out to customers and prospects to identify, incentivize and reward the key behaviors that are the nuts and bolts of what turn users into knowledgeable, valuable advocates. Marketo’s marketing automation and The Behavior Platform’s proven engagement mechanics allow marketers to do that. It also highlights the success companies can achieve when they do. That’s why we’re very proud to power Marketo’s “Marketing Nation,” and proud to congratulate their work today.

How do you increase adoption and long-term usage of your company’s enterprise applications? Gamification — the application of the behavior-motivating techniques from traditional and social games to non-game environments — has gained recognition lately as an effective way for marketers to build customer loyalty and engagement on digital properties. While that is definitely the case, gamification in the last couple of years has gained a large amount of traction in driving engagement across the enterprise, especially within sales teams and human resources.

Badgeville helps companies use gamification to incent and reward employees for completing the important, but often repetitive and less naturally rewarding, tasks that underpin business success. Additionally, it enhances daily work practices by making all enterprise applications more engaging and social. Here are six critical examples of how Sales, Finance and Human Resources can drive success with gamification:

1. Keep the Pipeline Clean. It’s extremely important that pipelines be kept clean and accurate to optimize the marketing budget and sales team growth. But for sales reps, celebrating a solid close to the prior quarter or diving back into selling to make up for a rough couple of months usually take priority over updating their pipeline. Sales managers can use gamification to reward reps for having the most accurate pipeline each quarter.

2. Encourage Contribution to a Deal. Most sales teams have reps with their own unique areas of expertise and experience. While the rep who closes the deal and his/her sales development representative will likely be the only team members to obtain a spiff, gamification enables the sales manager to reward others who contributed along the way. Implementing gamification within the company CRM system lets a sales manager offer a thank you badge to team members across the organization, even beyond the sales team, a sales manager can encourage cross-functional collaboration and creating a more efficient sales team.

 3. Incentivize Paperwork and Other Administrative Requirements. Paperwork is unavoidable in areas like expense management and benefits enrollment. DocuSign can make paperwork simpler and more secure, but when employees find other tasks more exciting and pressing, you still need a way to get them to do it. Why not make it fun? Rewarding employees with either peer or management recognition — or even tangible incentives — for completing required forms can create a friendly competition where employees try to outdo one another.

4. Manage Budgets and Reduce Costs. Most times, one’s reward for reducing costs within a department is…being given less budget to work with in the future. Budget management is another prime area in which peer or management recognition can go a long way towards encouraging people to put more effort toward reducing costs for the organization.

5. Motivate Employees to Learn and Participate in Training. Gamification can help spur employees to complete things like mandatory HR training, which is often not high on their list of things to do during their busy day. You can use a gamified platform to track these activities and opportunities and to showcase employee participation. As an added benefit, the platform maintains a record of all employee activities in the program, which is quite valuable information when it comes time to consider promotions, raises and other tangible rewards.

6. Map the Path to Career Success. Peer mentorship is a powerful motivator that drives employees to want to succeed. Using gamification, HR departments can create transparent, mission-based career paths that show the steps employees have taken to level up in the organization. By showcasing this behavior in a gamified platform, other employees can see what it takes to become the top salesperson as this mentor provides a breadcrumb path to show peers the way to the top. You can even design such programs to allow team members to recognize one another for contributions made toward a common goal.

It is always an honor to be recognized by esteemed industry organizations for the innovation across Badgeville. It’s been an especially rewarding period in the past month. Alongside companies like Salesforce.com; Eloqua; Cast Iron Systems; Nielsen; The Boeing Company; 3M; Mayo Clinic; AT&T, Inc.; Square; DocuSign; and Intuit; Badgeville and its Behavior Platform has earned top recognition in five prestigious competitions:

• SIIA Codies — Badgeville named Best Cloud Platform as a Service
• Gartner/1to1 Media CRM Excellence Awards — Badgeville-powered implementation wins customer Autodesk top recognition in Integrated Marketing Performance for its use of gamification in software trial marketing
• Edison Awards — Badgeville wins a Thomas A. Edison Marketing Award in the category of Measurement & Management Tools, alongside Optify Connect
• AlwaysOn OnDemand 100 — Badgeville selected as a top SaaS and Cloud Computing company; makes the AlwaysOn list of 100 top private companies for the second year in a row
• 2013 CRM WizKids — Badgeville named a winner and cited as outstanding in the CRM market

We are honored to be recognized alongside the top companies in cloud computing, SaaS, marketing and CRM. These awards highlight the magnitude of gamification’s impact on mission-critical areas of the enterprise.

Read more about Badgeville’s award wins here.

A lot of people who are new to Gamification assume it comes in two flavors:

• Reward the user with virtual badges
• Reward the user with prizes and monetary rewards

I’ll skip right to the big reveal: successful Gamification usually involves neither of these. The first thing to understand is that there’s no such thing as a virtual reward. Badges aren’t rewards — they’re symbols of rewards. A Gamification program that starts and ends with badges is destined for failure. Most people get this on an intuitive level, which is why so many assume that prizes and monetary rewards are the solution. So it might come as a surprise to learn that offering monetary rewards doesn’t work very well, either.

The extrinsic rewards problem  (a.k.a. “Pay them More”)
The benefit to extrinsic rewards, and the reason why they seem so appealing, is that they’re really easy to design. Cash bonuses, gifts and the like don’t take much thought. The problem is, monetary rewards invite employees to do math. And when people do math, they almost always come to the conclusion that they aren’t being paid enough. It’s human nature. “I worked the weekend for a $100 coupon? That’s only $6.25 an hour!”

The obvious solution, then, is to offer more money,  but unfortunately there’s a limit on the amount of money you can give your employees before it becomes unprofitable. Salaries tend to be market driven, and it usually isn’t feasible to exceed them significantly.

It gets worse
And we haven’t even started talking about the studies that show monetary rewards can actually hurt performance. The thing about monetary rewards is if the math is bad, employees feel insulted and if the math is good, they have all this stress over all the money they’re going to lose if they screw up. Salaries are guaranteed but incentive programs aren’t. Plenty of studies have shown that nothing hurts performance as much as stress. The bottom line is, motivationally, extrinsic rewards are often a lose-lose proposition.

So what’s the alternative?
If the answer isn’t badges for the sake of badges, and it’s not badges for the sake of prizes, what could the answer possibly be? Before you throw up your hands and walk away, I’ll say that there is a solution — it’s just not a terribly obvious one. And it involves discussing human motivation.

What motivates people?
Why do people do the things they do? This is possibly the single most complicated question facing humans. Fortunately, we can frame it a little because we’re specifically talking about workplace motivation.

Employees at Work
Employees are people who are being paid for their time and effort. The employee-employer relationship is a directed relationship (the boss tells the employee what to do), but it is also a voluntary relationship (the employee can quit their job if they want). It’s important to recognize the voluntary nature of work because it means employees have options — they choose a particular job not only for its salary but for its benefits and opportunities:

• Developing skills and reputation
• Interesting challenges
• Building professional connections
• The satisfaction of getting stuff done (tasks that have a meaningful and structured end)

Early last century, employees might have stuck with a job simply for the pay. These days if an employee feels like they aren’t getting all of the points above, there’s a stronger chance they’ll start looking for a new job. According to researchers, skilled employees are only going to become more difficult to find and retain in the future, and fulfilling all of their motivations is going to be essential in doing so.

Remembering the complexities of employee motivation can be hard. To simplify it, think about the list of motivations from the perspective of how employees want to feel:

• Smart
• Successful
• Socially relevant
• Structured

How does Gamification address these motivators?
The long answer would take at least four more articles to explain. The short answer is: by connecting badges to meaningful personal stories of learning, success, social connections and structure. Gamification is all about setting goals, tracking progress and substantiating the kinds of personal success that typically go unnoticed or underappreciated.

So…when to use money as a motivator?
Is there any time when it’s a good idea to do so in the workplace? The answer is almost always no. You can offer employees bounties to do extra jobs, such as with referral bonuses, but this isn’t really Gamification. It’s just another employment contract. (In the case of a referral bonus, employees are given the opportunity to work part-time as a recruiter).

Monetary rewards to motivate core workplace responsibilities only make sense in the rare cases where employees already feel smart, successful, socially relevant and structured. If these intrinsic motivations are already met, and the company still wants to incentivize a little more performance out of those willing to go the extra distance, a monetary prize, for top users, might be appropriate — but only if the intrinsic motivators have been addressed first.

Badgeville’s Omar Divina appeared on CNBC’s Big Data Download today to discuss the rising trend of gamification in the enterprise. Watch the clip to hear all about how hi-tech leader EMC improved key behaviors within its EMC Community Network with gamification:

• 21% increase in user activity
• 10% increase in website visits
• 15% increase in replies to discussion threads

You’ll get the inside track on EMC’s success and a few key facts about gamification’s rise, too. Check out the interview (3:40) and recap on Yahoo! Finance.

Michael Fauscette, IDC’s Group VP of Software Business Solutions, writes in a recent series of posts on his personal blog about his conversion from gamification skeptic to believer in the power of gamification to help companies promote key behaviors to meet business objectives. In the intro to his first post he writes:

I have to admit that while I “get” the concept of using game theory to shape behavior I was skeptical about how useful it really was in an enterprise context. I’ve spent some time over the past few weeks researching the topic and at this point my attitude has shifted quite a bit. When used correctly I now believe that gamification can provide a powerful tool to help companies encourage behaviors that they define as desirable.

In his second post he discusses various internal and external use cases for gamification. In his third, he details Deloitte’s increased user retention and adoption, realized in only 3 months after it added a gamification layer to its Deloitte Leadership Academy global executive training program, and looks at Engine Yard’s increased community engagement, gained by layering gamification on its Zendesk-based support community. (Both companies are Badgeville customers.) Among the figures he cites:

• Deloitte’s return rates increased to > 46% daily and > 36% weekly
• Engine Yard’s 20% reduction in support tickets, 40% increase in forum and knowledge base use and 40% reduction in ticket response time 

Read Fauscette’s complete posts here, here and here.

We had such great audience turnout and participation during our Elevate Enterprise Learning webinar (recording available here) that we couldn’t get to all the questions asked. Here’s a look at the key points raised by our audience, along with answers to their questions. For a summary of webinar key points, check out my other blog post on the subject.

Won’t people get tired of badges and gamification?
Just like any other program, gamification needs to be continually monitored and updated in order to remain relevant and engaging. This is why we monitor behavioral data and make ongoing recommendations to modify and tweak gamification programs.

Won’t people “game the system?
Badgeville recommends 2 ways to prevent people from gaming the system. Technically, we can rate-limit behaviors to prevent users from, for example, just repeatedly pressing a button to earn points and badges. The other consideration is to design the achievement structure carefully to drive quality behavior: for example, in online communities, making sure, beyond basic onboarding badges, to reward people for upvoting people’s contributions.

Isn’t there a danger of people caring more about the game than the educational content?
If designed well, the two can’t be separated. If the users care about the “game,” it means they’re engaged in their community or with the content, and we have an opportunity to channel the efforts they put into the game experience towards the educational behaviors we know will result in improved learning outcomes.

How do we sell this concept internally, especially to skeptics?
It’s important to note that the gamification of education is not about making the learning experience into a game (that falls under the category of learning games or simulations). Gamification applies mechanics that make people motivated, like what we see in games, to the educational context. Reputation, status, master, autonomy — these are all experiences that games are great at communicating, and we use techniques games use to make the educational experience similarly engaging.

Our Elevate Enterprise Learning webinar covered a lot of important, actionable information about the most effective way to design and deploy your learning implementation. (Couldn’t make it? No problem — watch the recording.) Thanks again to Thomas Hsu from Accenture’s Global Knowledge Management Group and Jessica Alvarez and David DeHaven of Kaplan University for their insights, and to the hundreds of audience members who attended. We got some great questions during the event and will address some of them in this post.

First things first: Understand business goals and what will drive them
First and foremost it’s always crucially important to have a clear understanding of what your business goals are and of what behaviors and behavioral change will drive those business goals. Successful training programs can be designed by using the 4 Kirkpatrick steps as a scaffolding for your goals:

1. Engagement – how engaged was the audience during the delivery of the content?
2. Retention – Did the audience retain the acquired knowledge?
3. Behavior – How did the knowledge modify behavior?
4. Results – How did the behavior change affect key business metrics?

Once the stage is set to design the implementation, we can apply things like Game, Reputation and Social Mechanics in ways that are compelling to your target audience. However, the first launch is just the beginning. Using in-depth behavioral analytics tools, we need to examine the activities and progression of the users through the learning environment. By monitoring and tweaking in response to real user behaviors, we’re able to adjust the program with surgical precision to ensure we’re driving towards our targeted learning outcomes.

Putting your planning to work
As the user progresses through their learning content, we can start sending them to the environment in which they will eventually apply the learned content, for example, into a CRM application, thereby building an explicit and clear bridge to drive Kirkpatrick steps 3 and 4. We can capture their behaviors on the CRM application back into the behavior platform, creating a single view of the learning journey that includes the application of learned content. This is an incredibly powerful way to surface learning speed and expertise, providing a deeply engaging experience for the user: suddenly they aren’t learning in a silo, but instead see how their learning path directly impacts their skillset and feeds back into their status and reputation within the organization.

Using a behavior platform is a powerful way to deepen engagement and drive to educational goals within an enterprise setting. In order to ensure success, we need to ensure that we design the experience thoroughly and with our business goals in mind.

To see some of the main question topics that came up, see my next post.

Badgeville’s Kris Duggan appeared on Business Insanity Talk Radio today to discuss how small businesses can build modern customer loyalty using gamification. Listen to the interview (it starts at 35:55 in the show) to learn why Global 2000 organizations, along with mid-size and small business, are turning to gamification to boost customer loyalty and engagement as well as to improve employee productivity. Kris discusses the power of the psychological principles underpinning gamification, the importance of reputation and status in behavioral design, why the term “gamification” can be misleading (hint: it’s about behavior, not games!) and more.

Hear Kris now on Business Insanity Talk Radio.

Less than three years ago, my co-founder Wedge Martin and I started Badgeville with a dream to revolutionize business using many of the same techniques that were fueling the growth of the social web. It feels like just yesterday when we were launching at TechCrunch Disrupt, presenting the first generation of our product, and taking home the coveted Audience Choice Award. Just 30 months later, we’ve built one of the fastest-growing cloud companies in the world, with nearly 100 employees, winning many more prestigious industry awards, and most notably securing hundreds of world-class brands as our customers from Samsung to Oracle to Deloitte.

The vision we had in 2010 came at a time when the term “gamification” hadn’t made its way into analyst reports, or even our pitch deck. Yet we knew that market demand for a platform to reward and influence both customer and employee behavior would be extremely high. Soon, major analyst firms began sizing the gamification industry. Gartner came out with reports that 70% of Global 2000 Organizations would be using gamification by 2015. And we saw the market explode, having conversations with many of the top brands in the world across virtually every industry, from retail to technology to oil and finance. I recently published a book on enterprise gamification, and now there’s even an entire gamification conference in its second year which attracts hundreds of senior business leaders from across the globe.

While many young companies take many more years to get to the point we are today, we have been fortunate to have built a team of thought leaders and launched a rocketship of a global market that is ready to be taken to that next level. As a founder, there comes a time in the life of a business when what’s best for the company is to bring in someone who has been in the trenches taking extremely fast-growth companies and helping them continue to scale, both operationally and through product innovation, to support explosive market demand.

Today marks a monumental day in the history of Badgeville. I’m excited to announce that Ken Comée, respected cloud and social technology leader, will step into the role of CEO to help bring Badgeville to the next level as one of the most successful software companies of the decade. Comée has vast experience scaling fast-growth startups into world-class technology companies with thousands of customers, from his experience as CEO at Cast Iron Systems, acquired by IBM, to his tenure at PowerReviews, which he sold to Bazaarvoice, both extremely successful results for the companies.

As Ken takes the helm of our company’s executive leadership, I will be transitioning into the role of Chief Strategy Officer at Badgeville, along with continuing to serve on the company’s Board of Directors. I will be working closely with Ken to help continue the growth of our business, as well as to educate the global market on the value of gamification and behavior management for the world’s leading companies. Ken and I, as well as the entire executive team, together share in our dedication to our customers’ success and happiness. I look forward to having the time now to focus on engaging with many more of our customers, future customers, and business leaders across the globe.

– Kris Duggan
Chief Strategy Officer & Co-Founder
Badgeville, The Behavior Platform

For press inquiries please contact pr@badgeville.com.