In Nir Eyal’s book Hooked, he explains a 4-step Hook model (trigger, action, variable reward, and investment) as key to building habit forming products. This can help customers get the service they seek in a more rewarding and engaging manner and can help organizations meet their business goals. Gamification is one of the tools that can help organizations in executing such a model. So, what is gamification? It is the strategy of deploying concepts in games (say for example: points, levels, leader boards, etc.) to products and services in any industry. The purpose of this strategy is to increase revenue (from existing customers, while also attracting new customers) by increasing customer engagement.
If designed and deployed well, gamification can make the experience of customers meeting their needs much more fun, more engaging, and simpler. Gamification, in essence, satisfies the psychological needs (belongingness needs and esteem needs as per Maslow’s hierarchy) while helping them meet their objectives.
One particular aspect of gamification, which many industries have deployed successfully are loyalty programs. Be it airlines, hotels, online shopping and many more. Introduction Other industries that have tapped into gamification includes fitness, education, learning and development among others. Banking industry is no different, where gamification can be a game-changer in engaging customers more. However barring credit cards businesses to an extent, gamification has not had the intended impact in banking.
There are various reasons contributing to this including:
- not being materialistically rewarding for customers
- not being designed properly or for the right financial use case
- not being interesting enough
In short, to increase the customer adoption of gamified offerings, banks need to pivot the purpose of gamification. The purpose needs to change from only encouraging more usage of banking products to facilitating the lifestyle goals of customers.
How Can Customers and Banks Benefit From Gamification?
Banks can leverage gamification to:
- Improve customers’ financial literacy
- Inculcate better savings habits in customers
- Reward customers for using their products & services
- Attract prospects, including potential customers like teenagers
In this process, customers get to understand their own needs better and to understand how their bank can help them. One use case in banking that can be made interesting and rewarding to a customer and to a bank is helping customers achieve their financial goals.
Achieving financial wellness is the holy grail for any customer. Planning for the same is mostly considered to be a painful & complex exercise and executing the plan even more so. It inherently involves maximising savings and minimising expenditure to various degrees and varying durations depending on the goals set.
Gamification in financial goals can not only help the customer meet the goal but also make the journey more rewarding and enjoyable. Banks also stand to benefit from this. They get to understand the customer and their goals better, which in turn, provides banks an opportunity to tailor personalized recommendations in the context of the goal of the customer.
In this journey, banks can also inculcate better savings and investment habits in customers by ‘doing’ and not just ‘showing’. As customers meet their goals with a bank providing such services, customer engagement and loyalty increases. Such customers tend to use more products of the bank which in turns makes the bank business more profitable and sustainable.
To further understand how gamification can be successfully deployed to help bank customers meet their financial goals, click here and read the detailed thought paper on gamification.
