Gamification Pitfalls: Badge Fatigue and Loyalty Backlash

The following is an Op-Ed by Steve Bocska, CEO of Pug Pharm Productions

Steve Bocska is the President and CEO of Vancouver-based Pug Pharm Productions, a technology leader in customer gamification, retention, and activation. Steve has an extensive background as a gameplay designer, designing highly successful video games for companies including Disney Interactive, Electronic Arts, Ubisoft, Fox Interactive, and Activision. Pug Pharm’s Picnic™ Customer Engagement Engine creates community culture through gameplay.

Badges are Not Magic Bullets

Let’s cut through the hype – badges and points can’t magically resuscitate a disengaged online community. Never once during my career designing video games did we ever look at an unsatisfying level or poorly balanced game mechanic and say, “If we give players 1,000 points and a badge right here, it will make everything better!”

In spite of this, the buzz about “gamification” has spawned an entire industry fixated on overcomplicating the thinnest part of the overall online engagement equation–namely, audience capture through simple badging and points systems. Worse, we’re already seeing signs of badge- and points-fatigue from the first wave of online audiences subjected to these systems, including those recently identified by Marketing and Advertising expert, Adam Kleinberg. Indeed, overuse of these “high fructose” approaches can even lead to an undesirable outcome I like to call “Loyalty Backlash”—active disengagement when a customer realizes their behaviour has been manipulated with no personal gain.

This Loyalty Backlash is not a new phenomenon, particularly in the fast-paced and fickle world of online community engineering. Take the waning IPO darling Groupon, for example. If you’re like many people, you jumped on the daily deal bandwagon, lured by the promise of deep discounts. But many have now grown weary of sifting daily through their Inboxes for something they want, only to be rewarded by having to battle merciless crowds and deal with frustrated and exhausted staff. This has led to mass unsubscribing, or worse, taking the attitude that any company offering a Groupon was somehow a “damaged brand.”

I recently came across evidence of this damaged brand/loyalty backlash firsthand reading a restaurant review on Yelp. The reviewer was complaining about their most recent visit, criticizing everything from the food, to the service, to the behavior of the other customers. A respondent to this review posted a terse and telling comment, “What did you expect? You used a Groupon!!!”

There Are No “Quick Fixes”

With all due respect to infomercials, I find it generally wise to be skeptical of people promoting exceedingly simple solutions to complex problems. Even if someone did invent a “magic bullet” quick-fix to all your online engagement woes, you wouldn’t keep your competitive edge for very long. After all, if you can install a “plug-in solution” in 5 minutes, so can all of your competitors! Solving problems within a complex environment generally require more than simple solutions. And designing an effective and captivating gameplay system is not a trivial task. I’ve been designing interactive entertainment for well over 10 years, and I while I feel very comfortable doing it, I still don’t find it particularly easy.

Layering on badging and points services fall into exactly the same category of extrinsic manipulation as daily deal schemes and Foursquare check-ins. By themselves, they deliver interesting and momentary novelty value, but generally have a very short shelf-life—and carry little likelihood of generating long-term customer retention or activation. Granted, I won’t deny that most of us felt some fleeting thrill in Grade 3 from earning our “gold stars” for getting an A+ on our spelling assignments. But beyond the initial jolt of satisfaction, pride, and perhaps surprise (“Cool, I didn’t even study!”), those shiny little stickers provided no lasting joy or residual value.

Simply put: a badge is a motivational and interactive dead-end.

On the other hand, well-structured and carefully designed gameplay is an excellent motivator. After all, it’s fun to play. And win. And even lose, just to be part of the action. And most of us would have no objection to making “fun” more prevalent in our lives, as long as it is made voluntary, fitting, and intrinsically motivating. For proof, look no further than babies—puppies, ducklings, humans—and you’ll quickly discover how intrinsic, innate, and instinctive playing is in nature. What appears on the surface to be a simple game of tag, hide-and-seek, or play-wrestling is in fact a safe, effective proxy to learning useful, real-world skills. We’re hard-wired to make the association between playing with learning. And since learning provides great evolutionary benefit, we are naturally drawn to any form of “play.”

Crossing the Loyalty Chasm

Someone coined the phrase “Gamification” a short while ago (I say “someone” because I’ve personally met no fewer than three different people within the past year who claim to have invented the term). This word was initially intended to cleverly convey a novel approach towards deepening audience or customer engagement by applying gameplay mechanics. Unfortunately, the term has become hijacked by promoters of rudimentary/shallow approaches that have much more in common with “reward systems” or “loyalty programs” than true games.

My main point here is that it’s not enough to focus on just capturing audiences. They need to be managed, retained, and most important of all, activate the culture of their community. The focus of any brand’s online strategy should be to get their members safely across The Loyalty Chasm, moving beyond simple interactions and creating communities that are more involved, committed, and loyal—ideally, by bringing them into a system that grows more useful over time. In a recent post, Gamification blogger Andrzej Marczewski reached the same conclusion, identifying the three similar phases of customer engagement: brand introduction, customer engagement, and loyalty.

The “holy grail” among the elite designers of online engagement systems today is that which is self-motivating and self-rewarding—adjectives more commonly associated with true video game designs than simply a trophy case with a leaderboard.

And while on the topic of leaderboards, I’d like to take this opportunity to dismantle a big myth about their value and applicability. From my perspective, I can think of very few things that are more damaging and demotivating towards the culture of a community than a leaderboard. Look at it this way: if you’re lucky enough to be sitting in the top position, everyone below you hates you. If you’re ranking #17 on the Top 20, you hate everyone above you. And if you’re not on the Top 20 list, you feel like an outsider (and maybe hate yourself). The competitive elements introduced by a leaderboard don’t make things more fun and or more social. In fact, I’d go so far as to say they make things more ANTI-social and demotivating.

The Road to an Activated Audience

True “game design” approaches will increasingly make their way deeper into the design of online user experiences. As Matt MacLaurin, eBay’s Senior Design Director, announced in his Gamification Summit 2012 presentation, the term “Gamification” will soon go away. It will just be called “Design.” At Pug Pharm, we’ve experimented with applying many different tried-and-tested game design principles and technologies—those typically used by traditional video game designers—to achieve intrinsically motivated and fully activated online audiences. One of the most successful approaches we’ve tried simultaneously taps into two distinct core human tendencies that are commonly found in successful online video games: 1) the desire to collect interesting things we care about, and 2) a curiosity about meeting people who think just like us.
These are both powerful and universal themes. After all, we all like collecting unique things we find particularly interesting—sports cards, shoes, stamps, expensive cards, etc. One person I spoke with recently confessed (with a disturbing lack of compunction) to collecting various animal parts from roadkill! We also seem to like interacting with our collections, arranging them, completing sets, sharing and trading them, and even inventing games around them. Offering audiences a way to collect and organize interesting things is engaging at a very fundamental level—much more so than giving them a trophy case of generic badges with a leaderboard.

A very important characteristic collectables is scarcity. Earning a generic badge is nice for a moment, but owning an extremely rare collectable (the Honus Wagner baseball card, Action Comics #1, etc.) creates an additional degree of value, vanity, and prestige in the holder. To deliver these principles in the virtual realm, we’ve ensured that all the collectable rewards we deliver to the user are drawn from a managed economy of virtual goods—specifically designed to reflect a variety of interests, themes, topics, etc. This creates a wide range of interesting new engagement design possibilities—along with powerful and insightful user analytics. Through this approach, a user’s “virtual collection” becomes a powerful window into their thoughts, preferences, attitudes, and beliefs. By doing so, you’re unlocking the exact same gameplay mechanics that power some of the most successful casual online games. After all, most of the top Facebook games (Farmville, Mafia Wars, CityVille, etc.) are arguably nothing more than highly-polished collections games hidden behind a seamless and addictive player progression model. By applying these same principles, it becomes possible to get your audience safely across The Loyalty Chasm, moving them towards complete activation.

We’ve even taken this approach to an exciting new level in recent projects, building native technological systems into our Picnic™ platform whereby these virtual goods can be used as the bridging mechanism to socially connect people sharing common interests and create a unique community culture. This has been a game-changer. Using expressive collectables as a way for people to find other like-minded community members adds a compelling new sense of purpose to the collectables themselves, while adding an exciting dimension to the social online experience. It’s like combining the most intriguing parts of Pinterest and eHarmony.

Climbing Back Up The Slope of Enlightenment

Of course, the bad news is that Gamification is swiftly sliding down the Gartner’s “hype cycle” into the Trough of Disillusionment. The good news is that new technologies are now hitting the marketplace with the features and flexibility to service the next wave of more sophisticated online community engagement projects. This includes our very own Picnic™ Customer Engagement Engine—a platform designed to create community culture through gameplay and built over the past 3+ years by a team of veteran game designers, web technology experts, and software-as-a-service product managers.

But ours is just one of countless approaches and technologies that are sure to start emerging within the dynamic and rapidly evolving world of user engagement design. In the years ahead, we are certain to find many new projects—including those who have realized the “pointlessness” of points & badges—looking for flexible and lasting solutions to increase online loyalty, consolidate their communities, and convert people into customers. And that’s when I think things will start getting really interesting, with exciting new projects pushing the boundaries and redefining the expectations, interactions, and relationships between brands, their customers, and the community members themselves.

Steve Bocska, President of Pug Pharm Productions Inc.

sbocska@pugpharm.com

Image by Mr. Muskrat