I recently had the opportunity to chat with Rajat Paharia, founder and chief product officer at Bunchball, about his new book, Loyalty 3.0, pivoting startups, and the differences between the business of games and the gamification of business.
Lilia: You were one of the first to see the potential for gaming methodology in marketing. What sparked this idea?
Rajat: The company I founded in 2005 was the right idea, but it was 2 to 3 years early to market. It was a social gaming platform, and in the process of building it, we examined what made gaming sticky. Pogo was one of the best, most used sites at the time, and they had all these statistics that they were able to stitch together into a really engaging experience. So we started building that idea into our gaming platform – for game results, but also to get people to do other things, like invite friends. We saw that it worked for motivating more than just behavior within the game itself – and that was the spark.
We realized that combining data with “gaming” concepts can be used in other interactions. We were still a small company, so we had to make a very tough decision – continue in the social gaming market, or shift to gamification for businesses. We chose the latter, but we were early to market – again. Ultimately, though, that turned out to be a good thing – because we had time to develop a strong skill set and effective motivation techniques.
Lilia: Bunchball has helped well over 300 companies, including dozens of global brands, leverage big data to drive gaming-inspired loyalty programs. What surprised you most about how those companies have put this technology to use?
Rajat: We started with B2C applications of gamification, but the surprise has been how rapidly the business has transitioned to B2B uses. Companies are using (our solution) to motivate and train employees in sales and service, and to influence partners. B2B has taken off and is growing incredibly fast. That’s something we didn’t foresee.
It makes sense, of course. Consider that Facebook, Amazon, etc. know more about your employees than you do. Yet companies ignore tons of data about employees who spend 8 to 10 hours a day working for them and delivering enormous value. That data lives in Salesforce, Jive, Cornerstone, Successfactors and all manner of enterprise apps and systems.
Lilia: Loyalty 3.0 requires Big Data. Does that mean only big companies can really use it for employee and partner loyalty?
Rajat: Our customers range from small companies, as small as 10 to 100 people, to the bigger ones.
What you need is to understand customers’ or employees’ motivation. Then you need data. And today we are walking data generators – constantly throwing off information that can be used to create loyalty 3.0 programs. Now, when I say Big Data, I’m referring to the large volume of data being generated by each of us as individuals – a lot of it unstructured. Those individual data streams are available to any business, not just large ones. Finally, you need Gamification – that is, you need to create data-driven motivational techniques.
Lilia: In your book you discuss the entry of Gen Y into the worksforce. Is it that younger generation that’s really the audience for gamification?
Rajat: No. It’s based on fundamental human motivators, so it works for anyone. The demographic of our customers’ customers and employees is across the board. The thing about Gen Y is that this is the air they breathe. So to motivate them, these methods are indispensable. Gamification works for everyone, but it’s absolutely critical for the Gen Y.
Lilia: What do you find is the most common misconception people have about gamification?
Rajat: The word is a double-edged sword. People think it’s games and entertainment. And they don’t want their employees playing games. They want them working. The reason these techniques came out of the gaming industry is because game designers have been living in data-rich environments for the last 40 years, and have had a chance to learn and develop all these techniques for motivating and driving behavior. Now the rest of the world has caught up. So gamification is really not about games at all. It’s about business results.
Lilia: Certainly wearable computing will create a huge opportunity for gamification through increasing the volume of data even more and through the “everywhere with me” aspect of those devices. What are some other emerging trends that you see either enabling or driving the demand for gamification?
Rajat: The notion of sensors everywhere. There’s a company across the street from ours that’s making ingestable sensors, powered by stomach acids. So you can tell exactly when the medicine was taken, and how the body responds. That means we can use gamification to motivate healthy behavior like taking your medication on time. More broadly, technology is mediating a lot of what we do – and all those systems are throwing off data that can be used to motivate behavior and inspire loyalty.
Lilia: Where should a company start when considering gamification?
Rajat: Always start by determining what you are trying to accomplish. What’s your goal? For example, “We want our channel partner sales team to contribute 10% more to the pipeline.” Gamification starts with a business mission statement. Then you decide how you will measure that. Then, understand what are the behaviors that I need to affect. Next look at users and understand what motivates them.
Lilia: That sounds straightforward, but how would a company actually know what motivates customers or employees?
Rajat: The best way to do that is by talking to a few of them. Ask them lots of open-ended questions. You only need to talk to a few to get really smart. We break it down in the book – how to craft an experience that fits, and create automated, scalable, repeatable motivation and intervention that you can use to motivate employees or kids.
Rajat’s book, Loyalty 3.0, launches June 18th through all the usual channels. In the meantime, you can pre-order at http://loyalty30.com/ and get extra gifts with your pre-order.