Gamification: What is it and how is it used in direct selling?

In direct sales, using rewards to motivate distributors is not new. Each compensation plan is an intricate system set up to reward specific behaviors. However, sticking with pure monetary rewards leaves a good deal of value on the table. In recent years researchers have brought to the forefront the idea of using technology to create game like reward systems as a superior way to increase desired behaviors. All kinds of companies and educators are using the lessons learned from the booming technology game industry to “gamify” reward systems.

For me, household chores provide little emotional reward. I come by this hatred of household chores naturally. My mother used to say that she would have to be “real mad” to clean a house. Apparently I passed on this hatred to some of my children. My son and his significant other recently joined an online game called Chore Wars. I first assumed this was a group of people who sat around (face-to-face) and griped about doing chores. I then thought perhaps it was a reality show about people who get angry when they have to clean house. Both of my initial responses were wrong. Chore Wars presents an online challenge to gain points for doing housework. This resembles the sticker system I used to reward my children for making the bed or cleaning the toilets.

Using games to understand complex economic and psychological processes is a well-known motivation technique. As you may remember from high school psychology, B.F. Skinner and other behaviorists studied how reinforcements solidify a new behavior and the lack of reward allows a behavior to wither and die; a process known as operant conditioning. However, gamification goes beyond the basic cause and effect relationship of operant conditioning to add the appeal of game playing.

Essentially, gamification uses immediate rewards in the form of points. The points vary in appearance (points, completion bar, virtual currency, etc.). The process is relatively simple: provide a system that helps a person keep track of the desired behavior. Interestingly, the accumulation of points can be just as much of a reward as using those points to obtain a desired product or service. Typically, gamification provides the game and rewards in an online environment. You can find great explanations of the concept on Wikipedia and in several Ted Talks. I personally like this talk from Jane McGonigal, author of Reality is Broken and Superbetter:

In addition to points being used in exchange for products, gamification creates motivation. When we play a game, it triggers basic needs like competition and cooperation. We also enjoy the process of communicating and the camaraderie that comes along with playing a game. We like to play but we also enjoy playing to win.

McGonigal discusses the (possibly true) legend that the first games ever played were created by Lydians during a time of famine, to distract themselves from their hunger. Humans learned early in history that people often lose track of time and forgo other needs while playing games. In her book, McGonigal states that young people today play online games on average of 22 hours a week. In other words they’re spending about the same amount of time playing games as they would at a part time job. Obviously, playing the game provides a powerful motivating force.

Certainly the business world is no stranger to the use of games and rewards to solidify the relationship between the customer and the organization; reward points add up to everything from airline miles to groceries to books. Direct-selling companies are increasingly using gamification concepts to motivate sales forces. The concept of ranks and compensation are based on the same basic needs. Many companies use point systems to calculate commissions. Reaching a higher rank doesn’t just net you more money, it lends you prestige. Often in the industry we discuss the importance of non-monetary rewards and recognition. However, companies can do more. Technology and enhanced game elements may be the aspects missing from many of the existing systems.

Taking advantage of the current generation’s fondness for technology game systems seems like an easy process, but finding a way to design a game system requires that a clear set of behaviors can be identified.