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Thursday, November 4, 2010

Gamification Drowning In A Sea Of Coupons, Virtual Currency And Awards

Is it just me or does anyone else feel bombarded by the number of companies and institutions issuing coupons, virtual currency and awards. I lost count of the number of programs I am a part of and I am beginning to lose interest in managing all of the "credit" systems I am enrolled in. I am on countless leaderboards and receive a flurry of notifications and account updates on the status of my points, how to get more and where to redeem them. I entered a  grocery store chain the other day and was accosted by a representative encouraging me to go to their web site and enroll in yet another program.  

From an egotistical point of view I feel partially responsible for this onslaught. Over the past two years my company Gameinlane.com has been advocating and working with e-commerce businesses to help them  understand the value of gamification. I have encouraged the incorporation of "game mechanics" into business applications to improve customer acquisitions, retention and revenue per customer. Of course, I am not the only individual or company that has recommended this approach. There are now special conferences on the subject and rock star pundits writing books and chairing conferences advocating the gamification of business applications.

With the blurring of the line between an online game and an online business  are we at risk of killing the goose that laid the golden egg or in this case the golden coupon and virtual point?

I am not sure I have the answer to this question. However, I do believe something is going to have to change  taking the gamification process to a new level to avoid a meltdown of consumer enthusiasm.

In my mind there are a number of potential outcomes.

Consolidation - Will a handful of virtual currency/coupon providers become providers of all virtual currency/coupons? We are already seeing this with Facebook. We could see a few more "big" players step in to consolidate the market. This will help in the management of coupon, award and virtual currency accounts.

Virtual Currency/Coupon Exchanges - Will exchanges emerge that allow consumers to easily exchange virtual currency and coupons issued by different institutions allowing consumers to leverage coupons and currency outside of the issuing environment. The airlines have done this for years will the other issuers join in. Having a point, coupon or award only valuable within a single environment is not very useful. If exchanges emerge the issuer can still maintain an identity with the virtual currency and give the consumer more options to leverage the currency elsewhere.

Merging Of Games And Commerce  - This alternative is the most interesting with the distinction between an online game and a shopping experience disappearing. I have already seen this with a virtual world shopping experience under development. The consumer and merchant actually engages in the shopping experience as a virtual person transacting and then receiving the goods through the mail. This moves the entire shopping experience online with no offline complement except for the delivery of the good or service. Although virtual currency is issued there is no physical store experience allowing the consumer to avoid the trek to the store. It also allows for instantaneous virtual currency exchange between merchants in the online marketplace.

Conclusion - I still remain an advocate of  the gamification of business applications. However, my enthusiasm for the issuing of points, virtual currency and coupons is beginning to wane. The added fun factor that game mechanics bring to a business applications has an undeniable value in the buying and selling experience, providing gamification does not distract from the transaction process. My enthusiasm for virtual currencies could be revived if trading and exchanging of virtual currency and coupons comes together in an easy to use and ubiquitous way. My suspicion is that entrepreneurs are already working hard on making these services available.

Kevin Flood is the CEO of Gameinlane, Inc. Kevin writes extensively about gamification, online games and the impact and integration into iGaming and E-commerce environments. Kevin is a frequent speaker at online game events and conferences in Asia, Europe and the US. Kevin and his Gameinlane team are currently working with online gambling, social gaming and e-commerce companies integrating social gaming with online gaming operations and integrate game mechanics into e-commerce applications.

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