How Small Businesses Can Use Gamification Effectively

How Small Businesses Can Use Gamification Effectively

As popular as the term "gamification" has become, many people are still unsure exactly what it means or how it can be applied to their business or profession. By historical standards, video games are still a rather recent invention, and the culture that has sprung up around them is still a fluid phenomenon, changing and growing as it tries to find its identity.

Still, many of the things that make video games popular and financially successful can be adapted to the kinds of activities small businesses depend on for revenue growth and product improvement. The key is recognizing what features of games are popular and why, and how they can be converted from their video game context into a form that can be used to help build sales, customer relationships and success in a business. Let's examine a few of those features and use some gamification examples to see how they can be used in a small business.


This is the easiest one because practically all life experiences are based on it already. In a video game, progression occurs in features like "leveling" and "power-ups." The longer a player continues to pursue the goal of the game, the more powerful their in-game persona or avatar becomes.

Two interesting ways this can be applied to a business are in training methods and customer loyalty. In training, students can be rewarded with more elaborate "bonuses" each time they achieve a more difficult goal. For customers, every purchase can either give them an accumulated advantage—like reward points—or a gradually more valuable gift or bonus product.


This feature is fairly self-explanatory. In a game, an achievement is a milestone in a player's progress towards a larger or more elaborate goal. In business, achievements can be structured as the completion of a series of tasks, like collecting all four products in a set, finalizing a certain amount of sales, or finishing each of three major training certificates. Human beings are completionists and collectors, so this kind of feature won't require much encouragement.


What is a proc? The best real-world analogue to a "proc" is a slot machine win. Each time you pull the handle, you activate the machine and it presents you with a result. Occasionally, pulling the handle causes money to pour out of the machine. It doesn't take a rocket scientist to see how effective this kind of incentive can be.

Using "procs" for customers is difficult because it introduces an element of chance into their purchases, which can often run afoul of lottery regulations. One solution is to give every customer a prize, but to make some of them better prizes. Cracker Jacks have made use of this model for years. "Procs" can be applied in training programs as bonus assignments or extra credit assignments which can earn students additional rewards or recognition for exemplary work.


This one has been popular since the arcade games of the 70s and 80s. It's used all the time after college exams. Just listing students from top scores down is often enough to inspire competition. It works well for customers of a business as well, especially during a sale or promotion. It might be worthwhile keeping only the five or ten best employees on the public leaderboard however, and talking with the lower performers privately; public shaming is not usually very productive.

Team Progression

This can be one of the most powerful ways to motivate people, especially if they are already expected to work together. One need only look to reality television to see how hard people will work to support their team in a competition. For customers of a business, getting support for one product over another is a good way to get started. For students, attaching this kind of activity to an achievement is usually the best way to go.


These are similar to achievements, but in addition to recognition for meeting a particular goal, an unlock grants access to some new subject matter, product type or choice of future tasks. For customers, purchasing one product can "unlock" access to a second product that is only available to certain customers.

Many businesses use unlocks as an incentive for employees to stay at their company for a long period of time. For example, after five years they may “unlock” special privileges such as bonuses or extra days off.

Understanding games and game theory is an obvious first step towards applying gamification principles in other contexts. Knowing human psychology is equally important, however. Once you understand what human beings enjoy, then using game features as entertainment in other contexts becomes much easier. Ultimately, it is important to test and try new things as a manager, and only then can you see what sticks.



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