What is Gamification?

What is Gamification?

Gamification is all about enhancing motivation levels to improve performance outcomes and increase engagement in specific tasks or activities.

Simply put, gamification brings game-like elements into non-game environments, turning everyday tasks into fun and rewarding experiences. More and more, we're seeing gamification pop up in new areas from ecommerce to personal health to customer service.

And it's super effective.

90% of employees report increased productivity when their work incorporates game elements. ⁽¹⁾

But that's just the tip of the iceberg.

In this article, we'll discuss what gamification is, how it benefits companies, limitations, and future trends.

• Gamification History
• Gamification Elements
• How Gamification Works
• Gamification Applications and Examples
• Gamification Benefits
• Gamification Limitations
• Gamification Future Trends
• How to Get Started With Gamification Today

History of Gamification

Gamification is a term coined by Nick Pelling in 2002 to describe the concept of integrating game-design elements and principles into non-game contexts.

Game designer Nick Pelling was developing a game interface for ATMs and vending machines at the time when he came up with the term Gamification. Nick is also the inventor and programmer of the game Frak released in 1984.

Though the term was only coined in 2002, it's been an integral part of how our minds are geared for completing tasks since the dawn of human civilization. From ancient warriors competing for honors to modern-day digital badges earned in the contact center, the principle remains the same: make it engaging, sometimes a competition, but always fun, and people will excel.

How Does Gamification Work?

Gamification works by tapping into our biology and psychology that is present in all mammals, not just humans.

By combining psychological principles with game-design elements, gamification creates a powerful system for driving engagement and behavior change in almost any sector its implemented.

Gamification transforms mundane into compelling, making the process of achievement as rewarding as the end goal itself.

The psychology behind gamification:

1. Triggers dopamine release

Gamification triggers a dopamine release. When users achieve their goals or unlock rewards, the brain releases dopamine a neurotransmitter associated with pleasure and motivation.

2. Operant conditioning

Gamification uses operant conditioning principles, where the presence or absence of rewards shapes behaviors. Earning points or receiving badges encourages desired behaviors, while the lack of rewards discourages undesired actions.

3. Social influence

Gamification uses social dynamics like competitions, collaboration, and social comparisons to tap into the human desire for social interaction, motivating users to perform better and engage with a specific task more deeply.

4. Goal setting and progress tracking

Gamification works through goal setting and progress tracking (like progress bars, levels, and challenges) that help users track their achievements and maintain a sense of forward momentum, keeping them motivated to continue in a particular task.

Gamification fun fact:

Websites with gamification options witness a 29% increase in website engagement. ⁽¹⁶⁾

Gamification Elements

Gamification elements can be almost anything that triggers the motivation and rewards systems of the end-user, limited only by the creativity of the game designer and the task that is being 'gamified'.

There are several gamification elements, but we'll list the most popular ones.

5 Most Common Gamification Elements

Gamification Benefits

Listed below are the top 5 Gamification benefits across various sectors.

1. Higher participation rates

Gamification captures attention by making tasks more interactive, leading to higher participation and sustained interest. Incorporating gamification elements into routine tasks makes learning new skills, exercising, or even shopping more enjoyable.

2. Increased motivation and engagement

Participants earn points by crossing levels or competing with others via a ranking system, which instills a feeling of accomplishment and motivates them to engage and push themselves to succeed.

3. Enhanced learning retention

Sitting through a college lecture or office training session it is so easy to get lost in thought while listening. If fun and engaging game mechanics were added to the learning process, students would be more encouraged to retain the study material, and employees would effectively retain training materials being presented.

4. Improved customer loyalty

Gamification is a must these days to get users' attention. Loyalty programs are a great example of gamification. As customers earn points for each purchase or hit specific milestones it encourages a close relationship with the brand and convert them into loyalists.

5. Valuable user insights

Gamification provides essential information on user behavior. For instance, retailers, healthcare providers, and education institutions can monitor how users engage with game elements to obtain insights that helps them understand what works and doesn't, shaping strategy and creating better experiences for end users.

Gamification Limitations

Fun and games does have its limits. Gamification requires a high degree of emotional intelligence to know when gamifying a task would be beneficial or harmful.

The following are some of the most common limitations with Gamification:

1. Misuse of gamification

Not all tasks or industries should be gamified. In industries where professionalism and seriousness are paramount Gamification will backfire.

Gamification limitation example: After-life preparations, banking or financial services, corrections, government, and some health-related sectors.

2. Complexity leading to disengagement

Challenging game elements or a complicated activity may cause the user to lose interest in the brand or the activity.

Gamification limitation example: A fitness app that sets unrealistic or hard to achieve goals, users may abandon the app altogether.

3. Over-reliance on rewards

Although obtaining badges and points is fun, users may become overly reliant on these rewards. As a result, intrinsic motivation—the desire to accomplish something because it's genuinely fulfilling—may decline.

Gamification limitation example: A company implements a gamified system where employees earn points for completing tasks. Over time, employees may become so focused on earning points that they neglect tasks that don't offer immediate rewards.

4. Privacy concerns with data tracking

Gamification sometimes includes tracking user behavior to unlock its full potential. Although this has advantages, it also raises concerns about data privacy and the moral application of knowledge.

Gamification limitation example: A shopping app that tracks and analyzes user purchases to offer personalized discounts might collect more data than users are comfortable with.

Gamification Applications and Examples

Gamification's benefits far outweigh the limitations if carefully implemented.

In fact, gamification is being used by some of the top globally recognized brands.

70% of global 2000 companies are actively using gamification. ⁽²³⁾

Below we've listed the top four applications for Gamification (we've included examples from leading companies):

1. Gamification in customer service

Gamification in customer service is the most popular and growing use case.

The retail industry is the most common gamification user at 28.6%, followed by the education sector. ⁽²⁵⁾

Gamified elements are used for both enticing customers to stay with a brand, and also within the contact center to motivate and engage the teams that serve those customers. With the right gamification approach, brands can expect to see an increase in conversions by 50%.

Gamification example: Top brands use gamification software like AmplifAI in their contact centers to motivate and engage their teams to achieve their goals and meet performance KPI's.

2. Gamification in education 

Challenge-based gamification improved student performance by 89.45% compared to lecture-based education. ⁽²⁷⁾

Gamified elements engage students through interactive learning experiences, making education fun and effective. 

Gamification example: Read Along by Google is a fun speech-based reading tutor app for children aged five and above. It encourages children to read aloud to help them improve their reading skills in many languages. As they cross levels, they collect stars and badges with Diya, the in-app assistant.

3. Gamification in healthcare

Healthcare gamification primarily focuses on managing chronic conditions, promoting fitness, and improving mental health by encouraging patients to adopt healthier behaviors, track their progress, and stay motivated in their treatment plans.

Gamification example: Headspace the famous mental health application,  uses gamification by highlighting daily achievements and providing badges to motivate consistent meditation. The app also offers personalized journeys and social sharing to encourage regular mindfulness practice.

4. Gamification in sales

Sales Gamification has been in use before the term 'Gamification' was coined. Rewards and incentives for meeting sales targets or closing deals is a proven strategy to engage and motivate sales teams.

Gamified elements such as sales contests and leaderboards encourages sales representatives to meet targets, leading to a 3.5x increase in sales. ⁽⁹⁾

Gamification example: Fortune 500 brands, like this insurance provider, use gamification and recognition tools in their contact center to increase Net Promoter Score (NPS) by 7%.

Gamification Future Trends

The gamification market is expected to grow at a 12.9% CAGR going into 2025, with the Gamification industry projected to grow from the current $15.43 billion to $48.72 billion by 2029.

This surge in Gamification's popularity is particularly evident in the customer service sector, where gamification is rapidly transforming how companies engage both their employees and customers.

For a deeper dive into the latest gamification trends and statistics, check out: Gamification Statistics You Need to Know in 2024.

How You Can Start Using Gamification Today

The contact centers driving leading brands like The Home Depot, Uber, American Eagle, and Discover are already well ahead of this surge with the integration of software like AmplifAI that not only offers gamification and recognition tools, but ties this into quality assurance and coaching mechanisms.

If you're running a contact center, and haven't heard of AmplifAI yet, don't get left behind. Check out the latest advancements in Gamification for customer service and support, book your gamification demo with our team today.