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.

During the recent Big Data panel at SXSW, a member of the audience asked this simple question: “When would you not use Gamification?” It turned out to be far more difficult than expected, however, as none of the panelists had a good reply…The best I could come up with on the spot was something to the effect of “Don’t use it if there’s nothing you expect in return.”

Then, on my flight home, I was reading the recent bestseller Fat Chance by Robert Lustig, which outlines his theory of how our obsession with sugar is slowly killing the human race, and came across the perfect response. It just stared back at me from the page:

Our brains are wired for reward — it is the primary force behind human survival. Reward is the reason to get up in the morning. If you take away reward, you take away the reason to live.

There’s the 2nd part to it, at the end of the same paragraph, which may be even more potent:

Kill the reward system, and you just might want to kill yourself.

While the book centers around the obesity pandemic, the biochemistry of reward is an essential part of the argument. It’s so fundamental to human nature that even the question of whether gamification is all about manipulation (incidentally also asked by someone during this panel session) becomes trivial. Of course it can be about manipulation, but it’s so much more basic than that. Why would you do anything that gives you no reward? Of course the reward may not be as simple as having a pleasant sensation. For example, I’ll wash my hands, because if I don’t, I risk getting sick. So my reward in this case is not getting an unpleasant sensation later on. But every action needs a reward to make it worth repeating. Too much reward could lead to addiction, but too little to inaction.

So in effect, gamification adds a compelling reason to repeating activities that otherwise lack a fundamental motivation for replication. Let’s say your job requires you to log your client hours for proper compensation. Ideally, you get off the phone, open some application, and enter a number in the right field. Save, close, done. But that activity in itself has no readily observable reward that would motivate you to repeat it diligently every time. Yes, there’s the motivation of getting paid, or not getting scolded by your boss for not doing it. But those are not very fundamental, not very certain, and very far removed from the immediate desire to just be done with this call. But add this activity to a list of other things you need to complete before you leave the office, and perhaps introduce a reward for completing the list a certain number of days in a row, and you’ve got a simple, immediate motivator. If we recognize the basic need for a clear, relevant, and timely reward system in pretty much everything we do, we have the answer to the final question posed to the panel: “What will we be saying about gamification in 3 years?” Naturally, nothing — the same way we don’t need to say anything about the presence of color on our TV screens.

So to return to the original question of when not to use gamification, I suppose the answer to take from Robert Lustig’s book might be: Don’t use it, if there’s a chance that your target audience will be harmed. We should probably think twice before gamifying the consumption of sugar in our everyday diet, just like we wouldn’t gamify the consumption of cocaine, although Dr. Lustig may tell you that the former has already happened…

Gamification, along with its underlying behavioral science, provides a powerful new toolkit to help organizations address their most pressing internal and external challenges. Internally, behavioral science can be applied both to identify expertise and to recognize and quantify performance. Externally, its mechanics can increase engagement frequency and depth while also driving increased advocacy.

Let’s see…performance, expertise, engagement, advocacy…quite the buzzword bingo entry I just put together. As the gamification industry evolves, we must go deeper than buzzwords and identify the impact that these techniques deliver.

Framing Matters

As Solution Architect at Badgeville I help prospects and customers translate the buzzwords above, and their organization’s unique goals, into quantifiable value measurements — and I’ve come to understand that framing matters. A conversation about the value of improved forecasting, or of increased revenues, is entirely different than one about user interactions or engagement.

So let’s talk dollars.

Funnel Everything

The first step in diving deeper into gamification’s potential impact in your organization is to funnel everything. Think first about your overall vision and strategy, outline the underlying goals, and define how you plan to measure your success. You can break down each of these performance metrics into a series of user behaviors.

For example, let’s use a sales organization. Their overall vision may be to define and expand a new market. Goals might include growing revenue and increasing market share. Metrics within these goals might include everything from reaching monthly and quarterly revenue targets to increasing salesperson adoption of CRM tools. Effective gamification requires a strategic planner to think one layer deeper — on the behavior layer. This layer breaks down every performance metric into individual user behaviors. For example, if you’re focused on increasing user engagement, you need to understand what engagement means in your ecosystem. (When I was a social engagement manager, I defined engagement as total user interactions within a given time period. That included a long list of behaviors ranging from visits to new posts, comments, shares, blogs, discussions started, likes, up-votes, and more.)

Digging Deeper: Gamification for CRM

Gamifying sales applications is a hot topic at Badgeville (as exemplified by the recent announcement of Badgeville for the Salesforce Platform). Applying behavioral science to sales teams and sales tools can positively impact many sales goals, including accelerating time-to-productivity, improving sales forecasting accuracy, improving win rates and average deal size, shortening sales cycles, and increasing employee retention rates. I’m going to dig into gamification’s impact on forecasting, a crucial component of any successful sales organization.

Sales forecasting is extremely reliant upon the quality of sales data collected throughout the enterprise. CRM systems, including Salesforce.com, are powerful tools that collect many of these critical data points. But they don’t eliminate the human element, which in practice means sales executives must constantly harass their teams to input all required information in the system. Gamification changes the conversation by guiding users through the steps managers require while also recognizing and rewarding salespeople for correct use of tools. The resulting improvement in sales data quality also drives significant revenue generation and cost savings, because better data leads to better forecasts. And both over-forecasting and under-forecasting are dangerous. Here’s why:

Forecast too high and you lose investment income and generate excessive payroll costs.

For every dollar you misspend staffing up to address a growing market, you lose another opportunity for more successful investments elsewhere. The $1 million you spent on IT infrastructure to handle incoming customer load could have been better spent delivering value in another part of the enterprise (or been invested in safe bonds, if you’re more conservative). Recruiting and hiring employees who aren’t yet needed comes with even greater associated costs. Regardless of where over-forecasting leads you to spend funds, though, you’re wasting money. Gamification minimizes this waste by improving data quality, thus reducing forecasting error.

Forecast too low and you risk customer dissatisfaction and churn.

If your enterprise can’t appropriately identify an incoming wave of customers, you’ll inevitably lose some of them due to an inability to deliver or to general dissatisfaction with the fact that you can’t provide the level of service and attention they deserve. (Some estimate that inability to deliver can result in revenue loss of up to 50% of unanticipated growth.) Again, by improving data quality, behavior management is an essential tool for helping you prepare for such as wave before it crashes on your shore.

Behavior Management Drives Business Results

Behavior management can drive similar results for any enterprise, not just those focused on sales. Every goal is measured by performance data, and every one of those data points comprises user behaviors. Properly designed and implemented gamification is built upon an understanding of user personas and their psychological motivations. So to figure out how gamification will translate into measurable revenue growth and cost savings, think first about the users behind those numbers.

It’s almost trite nowadays to state the pervasiveness of cloud computing. According to IDC, nearly 80% of new apps are cloud-based, while Forrester projects $240 billion will be spent on cloud investments by 2020.

As companies look to take advantage of the cloud revolution, many have chosen the Salesforce Platform, the platform as a service (PaaS) from Salesforce. It helps companies leverage a massive ecosystem of applications and sites to serve customers and enhance employee productivity. But despite the promise of cloud, one challenge remains: Driving user adoption and engagement. Most enterprise software never sees better than 50% adoption, making it harder to grow revenue and streamline business processes.

That’s why I’m very happy about our launch of Badgeville’s Salesforce Platform Toolkit. The toolkit enables companies that rely on Salesforce’s popular PaaS to build more engaging experiences across all of their Salesforce platform applications. Layering Badgeville’s powerful game, reputation and social mechanics across their critical Salesforce Platform applications, world-class companies can improve customer loyalty, enhance employee productivity and maximize their return on investment from their critical cloud apps.

A sizable portion of the Badgeville Community leverages Salesforce and Salesforce Platform–based technologies, including Autodesk, Engine Yard, Docusign, and Phoenix Idea Labs. Marketo, the marketing automation provider, chose The Behavior Platform by Badgeville to design and implement a gamification program on top of its Salesforce Platform community.

Since layering Badgeville across the Marketo community, for example, Marketo has grown its amount of active users while also increasing their overall volume of behaviors and engagement with key product areas. The Marketo team spoke about their experiences at a recent webinar and shared their transformative results, including:

• 2x More Behaviors
• 67% More Engagements
• 51% More Active Members
• 10% More Engagements per Member

The Salesforce Platform Toolkit is available for all Badgeville customers within the Badgeville Community. To learn more, please contact your Badgeville Account Manager or contact us to learn more.

Last week I introduced the first three of six critical game mechanics to consider when designing a leaderboard. Here are the final three visualization considerations that can significantly affect your leaderboard’s effectiveness: multiple leaderboards, points, and metadata.

Multiple Leaderboards
Many people assume there can be only one leaderboard per site, but this isn’t true. By narrowing the competitive space through filtering and aggregating, a leaderboard comes to represent a context — a subset of the larger experience. Not every context is relevant to every user, and multiple leaderboards are more likely also used to appeal to diverse users.

Context doesn’t always have to be based on user preferences either; boards can be used to encourage different behaviors. In social situations where both teamwork and individual effort are desirable, two leaderboards might be appropriate: one team board to encourage teamwork, and another, individual leaderboard to apply a little individual pressure.

Points (an abstracted measure)
So far I’ve spoken about “scores” and avoided using the word “points,” because they aren’t the same thing. A score is any measurable quantity and could include either points or direct behavior counts. In fact, behavior-based and point-based leaderboards are fundamentally different.

A behavior-based leaderboard is the simplest leaderboard you can have. Participants are ranked by the number of times they perform a specified behavior. What if you have multiple relevant behaviors and can’t be limited to just one? The solution is a points system: each behavior gets a point value whose amount corresponds to its perceived significance. For example, on the National Hockey League leaderboard, a win is worth 2 points and an overtime loss 1 point.

This leaderboard ranks by points (PTS), not wins (W)

Points are much more flexible than behavior counts but there are a few disadvantages to using a points system:

Audience Rejection
The biggest risk with points is that the audience doesn’t accept the valuation assigned to behaviors. By assigning (or not assigning) points values to behaviors, you are making an official statement of their relative value. If your valuation doesn’t match the general sentiment of the community, your leaderboards won’t be effective motivators.

Loss of specificity
The more behaviors you add to a points system, the less real meaning an actual score has (because there are multiple ways that score could be achieved). In an American football game, if a team has 15 points, it’s hard to tell how they got that point total. Maybe they scored 5 field goals (3 points each), or three field goals and a touchdown (6 points) but missed the extra point. Or maybe they scored two touchdowns and successfully went for two extra points after one of them. The fact is, once you abstract behavior with a points system, there is no way of knowing exactly what a participant did to earn their score. This becomes even more relevant when you consider the next problem…

“Gaming” the leaderboard
Once you introduce a points system, players will be encouraged to seek out the behavior that provides the easiest route to earning points and focus on it. This is a form of “gaming” the system, and the only solution is to take the best care possible when first balancing your points assignments.

Metadata
Think about a leaderboard that measures sales team performance. If the leaderboard counts the behavior “closed deal,” what’s missing? The number of deals a salesperson closes is relevant, but it’s not enough to provide the whole picture. You also need to know the dollar amount of the deals closed. This is an example of metadata. A single instance of the activity “close deal” might include a metadata value of $10,000, while another instance includes only $3,000. A metadata leaderboard is a behavior-based leaderboard that ranks players by the metadata sum of all instances of the behavior being tracked.

There is perhaps no other game feature as easily misused as the leaderboard. Not all leaderboards are created equally. The right one can transform a boring experience into a tense competition, while the wrong one can transform a pleasant experience into an affront. And the difference between the two extremes is unfortunately subtle.

Most visualization preferences don’t have much impact on a leaderboard’s effectiveness, but some do. Below are three of six such variables to think about when designing a leaderboard: centering, filtering, and aggregation. These can significantly affect a leaderboard’s effectiveness. (I’ll discuss the other three in a separate post.)

What is a leaderboard?
Let’s define what we’re talking about: A leaderboard is a list of participants, ordered by a metric.

• A leaderboard must be visualized.
• A leaderboard must be ordered.
• A leaderboard must be consistent (use the same metric for all participants).

Your Klout score by itself, for example, isn’t a leaderboard. A score only becomes a leaderboard if it is compared against others in a linear visualization. The actual layout of a leaderboard can vary, though. A leaderboard could be arranged horizontally or vertically. It could have three entries or three million entries. It could show three entries at once or fifty at once. It could be fixed, scrolling, or paginated. It could show ranks, scores, or both. It could refresh in real time, hourly, or daily.

Centered (a.k.a. “Local”) Leaderboards
Imagine a leaderboard with 10,000 players ranked on it. Does the average player see himself? If you said “no,” you’re probably picturing a leaderboard that defaults to showing the top performers. If you said “yes,” you’re likely picturing one that centers on the current user. A centered leaderboard provides two benefits:

• It makes it easy for a user to find him/herself
• It sets obtainable objectives

“Sets obtainable objectives” means that a player sees himself in relation to the other users that he has a chance of passing in the short term. It’s likely only a few points separate him from the “top” of a centered leaderboard. Once he moves up, the board will re-center, and he’ll see a new group of players just above him. Providing such “baby step” objectives to motivate behavior change is one of the primary tenets of gamification.

A leaderboard that isn’t centered probably requires the user to scroll down to find herself. There are tricks for making this easier (such as always locking the player on the bottom of the leaderboard for reference) but none of them solve the “obtainable objectives” problem. A leaderboard that defaults to the top-ranked players is discouraging for anyone not at the top. This isn’t much of an issue with small communities, but with larger groups it can be significantly demotivating.

Left: logged-in user is highlighted at the bottom, even when the leaderboard isn’t scrolled to her location
Right: Fixed leaderboard showing top players above and fixed leaderboard showing local players below.

It’s also possible for a leaderboard not to scroll at all. This is further demotivating because users who don’t make the top page of a non-scrolling leaderboard may not be able to view their status or progress.

Filtered Leaderboards
The simplest leaderboards include everyone; for example, if your leaderboard measured test scores of everyone in a college class, everyone in the class would show up on the board. A filtered leaderboard reduces the participant pool. For example, you could filter to show only undergrads. The advantage of this is that by reducing the competitive field, filtered leaderboards increase the chances of an individual user reaching the top. And users who get near the top are going to be more motivated by the leaderboard than users who don’t.

When considering filtering, think about the attributes that are relevant to your users. For example, their friends and social contacts – leaderboards are highly engaging if the participant knows everyone else on the leaderboard.  Other possible filters include physical proximity (e.g., a regional leaderboard), time (leaders for the week or year), cohort, experience level, office, and team.

Overall, you might be noticing a trend:

• Players want to focus on themselves.
• Players want to feel like they are near the top of something.

The more you can feed these two desires, the more effective your leaderboards will be.

Aggregated (a.k.a. “Team”) Leaderboards
An alternate strategy to filtering participants is aggregating them, or “rolling up” everyone who shares an attribute into a single entry on the leaderboard. For example, everyone in the San Francisco office contributes to a single score, while everyone in the New York office contributes to a different single score. San Francisco and New York then both show up as participants. There are a number of advantages to aggregated leaderboards:

• They lead to less “shame” in losing
• They encourage cooperation

By “shame” I mean that players near the bottom of a board feel bad about the public humiliation of being identified as the “worst” at something. In some cases, shame can be a motivating force, but in other cases, it drives people away. Hiding anonymously behind a team removes an individual’s shame. Aggregated leaderboards also significantly reduce the number of entries on the board (just like filtering) and therefore improve everyone’s likelihood of “winning.” Their biggest advantage, though, is that they encourage cooperation: everyone on the same “team” works together to move to the top.

Don’t miss the other three visualization preferences that have a major impact on leaderboard effectiveness in my second post.