With gamification moving into the corporate world, justifying the interest beyond the buzz becomes more and more crucial. We need hard numbers, and that boils down to the basic question: how much money can I make or save through gamification?

While we have some first tentative figures from gamified experiences - as reported by LiveOps (improved sales between 8% and 12% [1]), the Not Your Average Joe’s restaurant chain (1.8% increase in sales, 11% increase in gratuities [2]), Playboy (60% improvement in revenues from one month to the next [3]), there is still a lack of tie-in between gamification and ROI. What these examples have in common is the proximity of the gamification approach to the sales process, which is directly connectable to revenue. Down the food chain, it becomes more difficult to tie it to revenue. How much does gamification-driven data quality in my materials master contribute to revenue? How much the gamification-driven timely reporting of my work hours?

Part of the challenge is that the most common gamification metrics are only loosely connected, indirect measures for ROI. Fun, engagement, autonomy, or mastery are relatively "soft" concepts, that are hard to measure. Approximating them through "harder" numbers like clicks, Facebook likes, re-tweets, ratings, comments, number of articles, data quality, timeliness, or allocating a percentage of certain improvements (lower rates of sick leaves, customer satisfaction) to gamification is based on assumptions, heaping estimates on estimates. Of course, often there is no other way.

Ideally, you would be able to compare before and after gamification scenarios, or you have two comparable departments, where one would use the gamified approach and the other not and the outcome is measured. This is something that requires already a lot of effort in clinical trials or other scientific research, where as much as possible only few parameters are being changed and then statistical evidence being collected. In a company you cannot just keep parameters in a running operation under control, when the business - not the research – situation requires it. With other words: we are screwed.

One more challenge is the skewed perception that we define gamification mostly as fun an engagement enhancer, while in the end it's a concept that helps solving problems. Increased numbers of "like" or "re-tweet" in a community are not an indication of a solved problem, when the problem is that the quality of the knowledgebase is too low and turns customers away.  

Unless, there is a similar situation in a tightly related area, that struggles with the same situation, but has the advantage of time. They have been already through these first phases, and we can steal shamelessly their experience and apply it to gamification. I am of course speaking about Social Media. [4]

In a recent Deloitte study on "Social Software for business performance" [5] the authors addressed the very same issues. If social media tools help to solve a problem or make your work more productive, the adoption and usefulness will be seen immediately and spread to other organizations. But don't make the mistake to focus on adoption. It is a mistake to just report the number of likes, and posted pictures on an intranet. Skeptics will see this as a distraction to the work that the employees should engage in. If one unit adopts the platform and solves problems, that is a story you should tell, and others will follow. If the whole organization adopts the platform but doesn't use it for problem solving, all your adoption numbers are shallow, and you failed.

On a macroeconomic level, Social Media seem to be making really a dent in the real world and help solve problems as well. A Facebook-study claims that the service has added £2bn to the UK economy [6], an astonishing number for a service that's not that long out there.

Coming back to the microeconomic focus of this article, the same is true with gamification. Gamification, or the purpose of gamification, will neither lead to adoption, nor to long-term use of it, and not at all contribute to the real reason, why we use gamification: to help us solve problems more effectively.

The conclusion is to focus on the right KPIs, instead of adoption metrics or ROI.

If you cannot provide those metrics right now, there is another way to convince skeptics. Show them metrics from prominent use-cases of what happened, when gamification was not in place. And here again we steal shamelessly from the experience of Social Media.

You may have been following the current social media campaign failure of MacDonalds, where a missing, or apparently now well enough implemented social media-strategy led to something that we may call "sh*t-storm".[7] Very likely we will never hear, if and how this impacted their business. But the brand damage is here, and you better be on the safe side and assume that in a similar situation you will see some percentage drops. Another examples was Nestle's painful social media experience with their Facebook-page for Kit Kat. [8] Their failure is still being quoted as a lighthouse example for a social media failure. And you really don't want yor brand being associated with that for years.

Ok, while I cannot yet provide similar gamification use-cases (or should I say: non-gamification?), you may have already encountered first tell-tale signs of what it means not to have gamification in place: not being able to hire the best talents anymore, not attracting the right quality of engagement on your communities, an apathetic workforce (and you may not even notice it, because you are used to this type of "energy" in your organization), or a perception of many of your colleagues and yourself, that promotions in your company are unfair. And indication how much the effect could be, if you do not gamify can be found in the IBM-study on a gamified Enterprise Social Network Systems, and then turned gamification off. [9]

Do you have examples to share, that are signs that lacking gamification has or had a serious negative business impact?

And a last one: join our new Gamification Community and discuss and share experiences with us!

Links

[1] Wall Street Journal: Latest Game Theory: Mixing Work and Play; 2011
[2] Can Gamifying a Restaurant Get You Better Service?; 2011
[3] Gamification: Fact or Fiction?; 2011
[4] Measuring the Business Impact of Social Media; 2012
[5] Social Software for business performance
[6] The Guardian: Facebook adds £2bn to the UK economy; 2012
[7] McDonald's Twitter Campaign Goes Horribly Wrong #McDStories; 2012
[8] Nestle's Facebook page gets oily; 2011
[9] Removing Gamification from an Enterprise SNS; 2012