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Game-Based Marketing Author Shares Insights On Scoring Loyalty Points With Funware

  • Written by  Mike Santos


gabe_zichermann_smallIn an era where the Internet reigns supreme and social interactions account for a large portion of consumers’ online activity, the ever-present question is how to integrate these trends into marketing. Videogame innovator and entrepreneur Game Zichermann explores the concept of “Funware,” a new model for incorporating and leveraging games and game mechanics to reach today’s customers, in his book “Game-Based Marketing: Inspire Customer Loyalty Through Rewards, Challenges and Contests.”

Retail TouchPoints had the chance to catch up with Zichermann to learn more about what motivates consumers best, content that sticks and how the lessons from Facebook’s Farmville game can be leveraged in retail.

Retail TouchPoints: Although the Internet has been established as a place to harvest buzz and social interactions, a marketing model that actually leads to reliable revenue is not in plain sight. What are your thoughts on this? How does game-based marketing integrate?

Gabe Zichermann: While Google has been a major force in driving the discoverability of brands and retailers online, the massive concentration of pay-per-click advertising in their channel plus the ease of browsing online have eroded e-retail brand relationships substantially.  “Game-Based Marketing” is the first book to really look at how brands can engage with consumers using the tricks and techniques of videogames. Competitive, leading edge companies like Foursquare, Chase and the US Army cut through the clutter and create lasting, durable loyalty through game mechanics like points, badges, levels, challenges and rewards.

RTP: A key component to the book is the concept of “Funware.” Can you give our readers a flavor for what this is and how retailers can leverage it to their advantage?

GameBasedMarketing_book_smallZichermann: “Funware” is the use of game mechanics in non-game contexts, and really springs from the notion that any consumer experience can be made more fun, and through fun, more engaging. One of the simplest “big picture” ideas for retailers is to leverage the lessons of Farmville and refocus loyalty rewards away from discounts and merchandise to “soft” or virtual goods. Example after example shows that consumers are equally motivated by status as they are by cash or prizes, which means that retailers can offer cheaper rewards (virtual branded merchandise, early access to new products/services) in lieu of costly rewards. Such a switch will actually improve retention and sociability (especially among younger demographics) while vastly reducing loyalty program costs.

RTP: Can you provide an example of a game-based marketing program that’s effectively helped a retailers engage customers?

Zichermann: A great example from this last year isn’t precisely retail, but is related: Chase Picks Up The Tab. This promotion from JP Morgan Chase offered a slot-machine style reward when users paid for items at any merchant with their debit cards (sometimes, they picked up the tab). Although the program performed extremely well, they could have improved it substantially by making it open to non-Chase account holders. Another example was the Jimmy Choo Foursquare promotion that offered special rewards for Jimmy Choo buyers who acquired specific virtual badges for completing tasks in a given day. This promotion was also a huge success, driving hundreds of thousands of virtual and real visits for Jimmy Choo. Ultimately, fun sells — and that’s the premise of “Game-Based Marketing.”

RTP: “Content that sticks” is a popular moniker in retail. What are the nuances of sticky content for game-based marketing?

Zichermann: The stickiest content for consumers is that which delivers social status, enabling them to appear smarter, more connected, more successful, etc with their friends. “Game-Based Marketing” is premised on the notion that an effective loyalty and reward system in the 21st century is based on social status: Facebook, Twitter and rewards that emphasize users’ individual desires to be recognized.

RTP: The book emphasizes the importance of not only knowing your customer’s purchase motivations, but also knowing what drives them to invest, engage and succeed. Could you expand on this?

Zichermann: In the framework of Game-Based Marketing we talk about consumer motivations understood through a game-playing lens. These include user drivers like exploration, socialization, achievement and killing (not as bad as it sounds). These motivations drive each of us, to varying degrees, and at different times. In Game-Based Marketing we discuss how to design for all the different motivators to ensure maximum relevance and consumer impact.

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