Corporations, small and large, have begun adopting game principles to do business. The theory: Using fun game-like features such as leaderboards and achievements can produce more efficient employees and more satisfied customers.
Business spending on what has become known as "gamification" will increase from an estimated $242 million this year to $2.8 billion in 2016, predicts M2 Research, an Encinitas, Calif.-based technology research firm. And many small businesses, as well as 70% of the top 2,000 global organizations, will use "gamified" applications for marketing, employee performance and training, and health care by 2014, projects technology research firm Gartner.
Kiip's program fit into Popchips' grass-roots underdog marketing approach for its chips, says Brian Pope, Popchips' senior vice president of marketing. "We will get a lot more mileage and impact out of our limited dollars than doing a lot of mass communication," Pope says.
The rewards pop up when a high score is set or a level is beaten. Rewarding a player with a freebie when they're already happy, without interrupting the game, can cement customer loyalty, says Kiip CEO Brian Wong. "That is very powerful."
Privately held Popchips has seen its sales rise 40% this year, according to SymphonyIRI Group, a Chicago-based market research firm, and its 2012 sales could top $100 million.
Kiip and Popchips are using games as a way to personalize mobile advertising and overcome user resistance to ads on their smartphones and tablet computers. The market for mobile ads is expected to explode, soaring from an estimated $2.6 billion this year to $10.8 billion in 2016, according to research firm eMarketer.
Small businesses can exploit the location-based nature of mobile apps to their advantage, says Lars Leckie, a managing director at Hummer Winblad Venture Partners, which invested nearly $4 million in Kiip last year. "Small businesses can actually interact with you in ways that would not have made sense in the desktop world," he says.
Small businesses might have more to gain from gamification than big corporations, because the technology can help small companies stand out, says Doug Palmer of Deloitte Consulting, which lists gamification among its Top 10 Technology Trends for 2012. "A small tech company not using gamification might find themselves in a minority," Palmer says.
Foursquare, on location
Social-media giants Facebook and Twitter have become corporate tools for companies big and small, but reality-based app Foursquare arose as the early "poster child for gamification" at small businesses, linking consumers and companies, says Gartner Research Vice President Brian Burke.
Users "check in" to the Foursquare app on their mobile devices at restaurants, stores and other destinations. They can post their check-ins on Facebook and Twitter, as well as add tips about the place on its Foursquare page.
"I would say with 98 percent certainty it has helped our business, says Christophe Hille, co-owner of Northern Spy Food, a 40-seat neighborhood restaurant in New York's East Village that specializes in seasonal American cuisine made from local ingredients. "But quantifying that is really difficult," he adds.
Since Foursquare's 2009 launch, about 750,000 companies have begun to tap into the app's audience of 20 million global users by curating their virtual venues with special offers to customers and to the person who earns the title of "Mayor" by checking in the most.
"On one level, it's like a digital maitre d'," Hille says. "The person who checks in all the time on Foursquare gets recognized not just by my servers, but by me. I keep an eye out for this guy because I know he checks in like every two weeks, consistently. So we want to take care of him."
Hille has begun adding menu items and photos using new local updates that Foursquare made available to businesses earlier this month. The practice rewards regulars and informs newcomers. "They have hit on something smart with Foursquare," Hille says. "I'm excited to see where it is going to go from here."