Gamification: A New Hospitality Technology
By Michael Kasavana NAMA Endowed Professor, School of Hospitality Business, Michigan State University | January 06, 2013
Gaining a sustained competitive advantage in the hospitality marketplace almost always revolves around a strong customer relationship management (CRM) program. Obtaining customer loyalty, once based on having the right product at the right price, has evolved into creating strategies geared toward customer engagement through participation incentives. Social networking, digital media, mobile commerce, and geo-fencing applications have contributed to guest empowerment and/or entitlement. To attract and interest guests, hotels and restaurants are turning to gamification as a primary means for establishing long-term brand affiliation.
The term gamification refers to the use of game-like tactics or strategies to enhance customer engagement, allegiance, and repeat business in non-intuitive game situations. Simply stated, gamification is the application of competitive challenges to expand and retain a firm's customer base. Hospitality practitioners tend to favor strategies that directly influence consumer behavior, either prior to or at the point of purchase. Such incentives as awarding purchase points, offering promotional discounts, presenting spending rewards, and the like, capture the robust nature presented by gamification programs. One of the main differences between gamification and traditional loyalty programs is that gamification strategies often are conducted online, at no cost to the provider, and include virtual recognition status awards.
Legacy loyalty programs built on traditional "punch and play" or "earn and spend" formats fail to match the powerful impact of automated gamification stratagem. By combining competitive elements, status recognition, and built-in rewards, gamification can enact a significant influence over guest purchase patterns. Unfortunately, the attractiveness of yesterday's loyalty programming (e.g. frequent diner, frequent stayer, and frequent flier programs) has faded as the quest for purchase points has evolved to earning superior status as the visit leader of a venue or ranked recipient of special promotions. The opportunity to enjoy competitive success in a virtual environment is unmatched in the physical world of potential upgrades, complimentary goods, or access to concierge services. According to Bunchball, the self-proclaimed leader in gamification applications, participant companies experience a 100 percent increase in webpage views, interactivity, and repeat visits when incorporating an engaging, game-like format. In fact, Bunchball claims gamification applications can be designed to enhance consumer, employee, and business partner relationships.
Additionally, an often overlooked parameter of gamification applications is they tend to include a social dimension (one-to-many); this differs from traditional loyalty programs (one-to-one). By posting and sharing a participant's achievements with others, participating players appear more motivated to complete check-ins, purchases, and/or tasks.