Industry Analyst: Failed Gamification Projects, Costing U.S. Businesses More Than $700 Million, Can Be Fixed

BOSTON, March 19, 2018 -- For years, it was the hottest trend in trying to incent customers and employees, and some of America’s largest companies spent millions of dollars implementing it.

“It” was gamification, the use of gaming elements in non-game settings.  For instance, a company might try to improve customer loyalty, having them compete to buy more, with “winners” rewarded with special incentives.  Alternately, companies might rank employees by productivity on a scoreboard, either individually or as part of a team, with those producing the most given prizes such as free company-branded sportswear.

But in a new report, Amalgam Insights analyst Todd Maddox, Ph.D. says the results of a million-dollar research project show that existing enterprise gamification theory is fatally flawed.  Projects have largely failed, Maddox says, costing companies more than $700 million over the last decade, because existing approaches ignore a wide variety of employee drivers and work scenarios, merely focusing on a “one size fits all” approach.

For instance, he says some workers quickly produce more product but make more errors along the way.  By contrast, other workers may be more methodical in their work, trying to avoid those errors.  Maddox says companies that clearly differentiate their approaches toward what he terms “global versus local motivation” are more likely to succeed in their gamification projects.

Maddox states that companies can regain value from the past decade of failed gamification efforts by moving past simple “game mechanics” and “incentives.” Maddox’s research has uncovered a science-based approach to reuse gamification investments and fix what was set up incorrectly.  Prior approaches, he argues, were too focused on business outcomes and ignored key brain science concepts.

The list of companies that did not succeed at gamification includes several of America’s top corporate names:

• Adobe tried gamification to get consumers to learn more about Photoshop and buy the software.  “We didn’t find the golden egg,’’ said an Adobe executive, quoted in an CMO.com article.  “We were able to teach people how to use Photoshop in a different way and use it more successfully, but that didn’t result in an immediate increase in revenue.” 
• An article in iMediaConnection.com says Zappos tried rewarding its best customers with online badges.  The article says, “Badges might make people happy because they depict currency they have earned through specific behavior. But badges are not currency.”
• The Los Angeles Times reported that when the Walt Disney Co. implemented a system to rank laundry crews by their performance, complete with a scoreboard, some workers began sardonically referring to the system as the “electronic whip.”

Maddox writes that traditional gamification schemes, among workers who “have a (risk) avoidant personality, are in a bad mood, or are in a social pressure situation and are attempting to earn points for completing tasks, will result in reduced, not enhanced,” outcomes.  Managers, he says, who are “trying to optimize productivity and employee satisfaction need to understand which of their employees and which situations are more attuned to global approach-based motivation vs. avoidance-based motivation.”

Maddox’s full report is available at https://goo.gl/Ag6kVr.

About Amalgam Insights
Amalgam Insights (www.amalgaminsights.com) is a consulting and strategy firm focused on the transformative value of Technology Consumption Management.  AI believes that all businesses must fundamentally reimagine their approach to data, design, cognitive augmentation, pricing, and technology usage to remain competitive.  AI provides marketing and strategic support to enterprises, vendors, and institutional investors for conducting due diligence in Technology Consumption Management.

For more information:

Hyoun Park                                        
Amalgam Insights                              
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Steve Friedberg  
MMI Communications              
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