Game-Based Marketing Author Shares Insights On Scoring Loyalty Points With Funware

In an era where the Internet reigns supreme and social interactions account for a large portion of consumers’ online activity, the ever-present question is how to integrate these trends into marketing. Videogame innovator and entrepreneur Game Zichermann explores the concept of “Funware,” a new model for incorporating and leveraging games and game mechanics to reach today’s customers, in his book “Game-Based Marketing: Inspire Customer Loyalty Through Rewards, Challenges and Contests.”

Retail TouchPoints had the chance to catch up with Zichermann to learn more about what motivates consumers best, content that sticks and how the lessons from Facebook’s Farmville game can be leveraged in retail.

Retail TouchPoints: Although the Internet has been established as a place to harvest buzz and social interactions, a marketing model that actually leads to reliable revenue is not in plain sight. What are your thoughts on this? How does game-based marketing integrate?

Gabe Zichermann: While Google has been a major force in driving the discoverability of brands and retailers online, the massive concentration of pay-per-click advertising in their channel plus the ease of browsing online have eroded e-retail brand relationships substantially. “Game-Based Marketing” is the first book to really look at how brands can engage with consumers using the tricks and techniques of videogames. Competitive, leading edge companies like Foursquare, Chase and the US Army cut through the clutter and create lasting, durable loyalty through game mechanics like points, badges, levels, challenges and rewards.

RTP: A key component to the book is the concept of “Funware.” Can you give our readers a flavor for what this is and how retailers can leverage it to their advantage?

Zichermann: “Funware” is the use of game mechanics in non-game contexts, and really springs from the notion that any consumer experience can be made more fun, and through fun, more engaging. One of the simplest “big picture” ideas for retailers is to leverage the lessons of Farmville and refocus loyalty rewards away from discounts and merchandise to “soft” or virtual goods. Example after example shows that consumers are equally motivated by status as they are by cash or prizes, which means that retailers can offer cheaper rewards (virtual branded merchandise, early access to new products/services) in lieu of costly rewards. Such a switch will actually improve retention and sociability (especially among younger demographics) while vastly reducing loyalty program costs.

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