Over the years, as a customer experience consultant, I’ve increasingly become a student of “game theory” and of the “gaming industry.” I sense I am not the only one. For example, Thomas J. Watson the founder of IBM is quoted as once saying that “business is a game.”
As you likely know “game theory” is a branch of mathematics that postulates how people interact with one another to get their respective needs met (either in competitive or non-competitive ways).
Even if you haven’t formally studied game theory you’re probably aware of many of its concepts such as those articulated by Swiss mathematician Daniel Bernoulli and others – concepts like the law of diminishing returns. That law suggests the benefits of effort or expenditure often decrease with time to a point where the gains don’t justify that expenditure.
Game theory obviously plays a role in “gamification” of mobile apps, online contests, or even the creation of buying incentives. In fact, according to gametheory.net an incentive is often, “given to overcome a moral hazard problem which arises due to imperfect information.” In other words, an incentive is a nudge to help people overcome fear or uncertainty when faced with a buying decision.
Clearly, game theory has its greatest application within the “gaming industry”. According to an article by Mark de Bruijn titled Level-up your customer experience: Lessons from the gaming industry, gaming has become a 100 billion dollar industry serving 1.5 billion customers. In his article Mark identifies three key ways that designers in the video and mobile gaming industry create “gamer engagement”, loyalty, and spend. Those 3 areas are:
- First Impressions
It should also be noted that all three of these design elements are applicable beyond the gaming industry.
Let’s take “immersion” as an example. In gaming, immersion involves enveloping customers in:
Mark highlights the role of gameplay broadly in business by noting, “At Starbucks you can earn stars with purchases. The Spanish bank BBVA lets customers perform tasks to promote the use of internet banking. And the running app Nike+ Run Club challenges sports enthusiasts to measure themselves against others.”
From the perspective of “graphics/sound,” companies not involved in the gaming industry address these issues through visual and sensory elements that drive pleasure and positive emotional connections. The efforts are reflected in the design of sights, sounds, smells, and possibly tastes during brick and mortar interactions or through the visual layout of an online company.
The story, from the perspective of gaming, typically involves character development, dialogue, and ways for gamers to personalize their experience. In other business settings, “story” often involves providing an emotionally engaging context for a branded customer experience and finding ways to have customers meld their personal story with your brand story. It also involves giving your customers a positive story to tell about the experience they had purchasing from you.
While I might not agree with John Watson’s ultimate conclusion that “business is a game”, I am certain that the more we apply mathematical principles about the economics of decision-making the more effectively we’ll design and deliver experiences that connect with our customers. Additionally, I am certain that the more we connect with our customers through promotion, graphics/sound, and immersion – the more they will purchase and demonstrate loyalty with us!
Joseph A. Michelli, Ph.D. is a professional speaker and chief experience officer at The Michelli Experience. A New York Times #1 bestselling author, Dr. Michelli and his team consult with some of the world’s best customer experience companies.
Follow on Twitter: @josephmichelli
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