Why Loyalty Programs need to know this.

Why Loyalty Programs need to know this.

Gamification is one of the fastest-growing buzzwords when companies think of designing their Loyalty Programs. Business owners know that it is likely the best way to increase user engagement for their product. This is because of the fundamentals of gamification, which is based on the human-focused design philosophy.

However, while the term ‘gamification’ is now becoming popular in a wide array of fields, including software development, human resource management, marketing and education, little is known about the true meaning of the concept of gamification.

As a founder of The Octalysis Group, Yu-kai Chou, put it in his Tedx, many people assume that Gamification means “adding points, badges and leaderboards.” However, this is a misconception that diminishes the true meaning and potential of the concept of gamification. In order to design true loyalty in your loyalty program, you first need to grasp a key concept in the Octalysis Framework. Octalysis articulates two main types of motivational design (explicit and implicit) and details how and when to use each of them. Let’s start by defining what gamification is.

What is gamification?

Simply put, gamification refers to the deployment of the human-focused design elements of game mechanics to achieve a non-gaming goal. So contrary to popular opinion, gamification does not mean incorporating games in your platform, at least not exclusively. Instead, it means incorporating the principles and best practices that have made games and the gaming industry so successful in our processes of creation and work in the real world.

Unlike most other industries, the gaming industry is centered on the engagement of the user. A game is only as good as it can entertain and engage you. For that reason, the creators of games have had to develop a higher understanding of humans; our drivers, incentives, the eternal struggle we all face trying to balance risk and reward, all so they can create games that appeal to and engage us. As our founder Yu-kai Chou put it;
“Good gamification does not start with game elements; it starts with how it motivates our core drives.”

This unique approach pioneered the philosophy of human-focused design, a shift away from the conventional approach of function-focused design. It doesn’t mean turning anything and everything into a game but rather leveraging the fundamentals of gaming to achieve your non-gaming goals.

The Octalysis Framework

Yu-kai Chou pioneered the gamification framework called Octalysis, which traces human motivation back to eight core drives. According to Chou, these eight core drivers motivate us to do everything we do, regardless of whether that is in a game or the real world. These drives are:

• Epic Meaning and Calling
• Development and Accomplishment
• Empowerment of Creativity and Feedback
• Ownership and Possession
• Social Influence and Relatedness
• Scarcity and Impatience
• Unpredictability and Curiosity
• Loss and Avoidance

These are the drives that successful ames have leveraged for centuries to motivate, engage and entertain us. Now all the other industries are picking up this philosophy and deploying it to perform non-game-related activities like market products, educate students, train employees and in some cases, re-educate societies and breed new norms and practices.

With that understanding of the meaning of gamification, let us delve into the two different types of gamification. These are explicit and implicit gamification.

What is explicit gamification?

Explicit gamification refers to the use of overt and obvious game-like strategies to achieve non-gaming goals. With explicit gamification, users often have to ‘opt in’ to playing a game in order for the creator to achieve their non-gaming goals.
Examples of explicit gamification include the so-called ‘serious games’ and ‘advergames‘, which use games to perform non-gaming activities like employee training, student education and product marketing.
One example of explicit gamification is McDonald’s’ Monopoly Game. In the game, players play Monopoly while constantly getting the McDonald’s brand, aesthetic and color scheme further entrenched into their subconscious. This is a clear example of using explicit gamification for marketing purposes.

One of the emerging industries that have embraced explicit gamification and look set to help it evolve is the crypto industry. Web 3 Crypto platforms are leveraging explicit gamification to mint cryptocurrencies and NFTs.
An excellent example of this phenomenon is Reality Cards. Reality Cards lets users bet on the outcome of a real-world event, and it creates NFTs for each of the likely outcomes of the event. Users have to pay a rent fee for every hour they hold the NFT, which is the equivalent of placing a bet. The user that holds the card for the winning event for the longest time gets to keep the one of one NFT event card.

What is implicit gamification?

Implicit gamification refers to design techniques that do not overtly appear to be related to games but rely on the eight core drivers utilized by gaming to induce the desired response for non-gaming purposes. This type of gamification is subtle and more prevalent than explicit gamification. It is so prevalent that chances are you are deploying some version of it in your business without knowing that its origins are in gamification.

Some of the most common implicit gamification tools used today include progress bars, countdown clocks, live leaderboards, points-based rewards systems, achievement badges and many more. These tools are often used to induce artificial competition and scarcity to achieve a goal, like selling out a product in a limited amount of time and motivating team members to reach their respective work goals.
Some of the most popular examples of implicit gamification include LinkedIn’s progress bar, Kickstarter’s countdown clock, the points and rewards system at your favorite retail store and many more. These tools help their respective platforms to increase engagement and conversion of key metrics by leveraging the core drivers of games without actually feeling like they are games.


How to know when to use explicit vs. implicit gamification
Both explicit and implicit gamification have several benefits to the creators. Explicit gamification can drive up engagement with short term work and consumer processes that would otherwise be mundane and tedious. Processes like employee onboarding and training can be explicitly ‘gamified’ to increase engagement, retention and improve your employees’ attitude towards your brand.
However, it is worth pointing out that the impact of your explicit gamification strategy is heavily dependent on the quality of the game you create. People won’t play a boring game just because it is a game. The game has to be entertaining and engaging and most extrinsic design like Points. Badges and Levels do not create a fun and engaging experience by themselves.

Here, implicit gamification can help you. It feels more serious and less playful so your customers still treat your program as being something they feel safe in. You can apply it to help customers navigate tedious customer journeys like registration, submitting information for KYC due diligence and collecting feedback. You can also use implicit gamification to reinforce certain behaviors in your customers, like rewarding daily logins to your business platform.

But just because both explicit and implicit gamification are useful does not mean that they are interchangeable. For loyalty Programs we need to keep in mind that some experience are better suited to explicit gamification, and others are suited to implicit gamification. Here are some factors to consider when choosing which type of gamification to deploy;

1. Your target demographic
One of the main factors you should consider when choosing whether to deploy explicit or implicit gamification is the age of your target demographic. This is because the older generations often prefer implicit gamification while the younger ones gravitate towards explicit gamification. However, as mentioned above, the quality of the game matters a great deal to the success of your explicit gamification project.

2. Your industry type
The type of industry you are in will also indicate the type of gamification that will be effective for your organization. The banking industry, for instance, is better suited for implicit gamification because of the target demographic of the banking industry and the brand image that most financial institutions project to their customers.
On the other hand, industries that train skills like education, programming and human resource management prefer to use explicit gamification because this helps create new habits and increases knowledge and skill retention.

3. Your Project Goals
Not all goals can be effectively translated into either explicit or implicit gamification models. Some goals are better suited to explicit gamification, while others work better with implicit gamification. This means that it is your responsibility as a project leader to evaluate your project and its goals and determine which of the two approaches to take.
For instance, an HR campaign in bank to increase productivity and efficiency would work better with implicit gamification than explicit. Let’s assume you’re trying to motivate your sales team to make more calls and generate more sales. Having a live leaderboard on the sales floor can induce competition and increase your sales, but developing a game to make sales in the game might not have any meaningful impact on your sales numbers.
On the other hand, if your project is designed to impart new skills, market a new brand or change consumer behavior, then an explicit gamification approach would work better for you.

4. Your resource level
Last but not least, the amount of resources you have at your disposal for your gamification project should factor into your decision whether to pursue explicit or implicit gamification. Building a game from scratch is not cheap. You must ensure that the potential reward is worth the risk you are taking with such an expensive tool. You also need to ensure that the time and money you have is enough to produce a quality game; otherwise, you run the risk of being ineffective because you made a low-quality game.

By comparison, implicit gamification is much more affordable and can be integrated with every part of the business pipeline without upsetting the flow of things. So endeavor to tailor your gamification to the budget you have.

Let us help you

Now that you understand the difference between implicit and explicit gamification and when to use what, you are probably wondering how to get started integrating gamification into your company’s daily operations. Contact us for gamification advice today, and we will help you get started on your journey to driving up your brand’s engagement through gamification.


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