It's all the rage!  But what is it exactly?  Lets start with a basic definition:

ga∙mi∙fi∙ca∙tion [gay-muh-fi-kay-shuhn]: integrating game dynamics into your site, service, community, content or campaign, in order to drive participation.

The use of game dynamics into marketing is not new.  It's popularity has grown in recent years as a strategy for influencing and motivating groups of people. Brand marketers are just starting to realize the power it has to improve customer engagement, build loyalty, and incent employees and partners to perform.  In a world where everyone [millennials] gets a trophy, how will your brand engage your customers?

Conceptually, gamification has the potential to solve a variety of problems outside the business world as well, in areas such as:

• Health & Wellness: healthcare cost containment, obesity programs, smoking cessation...
• Education & Training: e-learning, corporate and vocational training, online testing...
• Public Policy & Government: education reform, climate change, welfare reform.

The technique can encourage people to perform chores that they ordinarily consider boring, such as completing surveys, shopping, filling out tax forms, or reading web sites.

But just like anything in business life you must beware of all the HYPE! Understanding how and why gamification works, in what contexts it is most effective, and what the limits are of this approach will be highly useful in sorting out the useful bits.  In the next few posts I hope to help provide a basic foundation and definition for the concept of gamification.

At its core, gamification applies the mechanics of gaming to non- game activities to change people’s behavior. When used in a business context, gamification is the process of integrating game dynamics (and game mechanics) into a website, business service, online community, content portal, or marketing campaign in order to drive participation and engagement.

Increasing Participation and Engagement
The overall goal of gamification is to engage with your customers and get them to participate, share and interact in some activity or community. A particularly compelling, dynamic, and sustained gamification experience can be used to accomplish a variety of business goals.

Game Mechanics & Game Dynamics
These two terms are closely related and sometimes used interchangeably. For our purposes, game mechanics are the various actions, behaviors, and control mechanisms that are used to “gamify” an activity — the aspects that, taken together, create a compelling, engaging user experience. The compelling, motivational nature of this experience is, in turn, the result of desires and motivations we call game dynamics.

Game mechanics include:

• Points
• Levels
• Challenges
• Virtual goods and spaces
• Leaderboards
• Gifts and charity

Game dynamics include:

• Reward Status
• Achievement
• Self-expression
• Competition
• Altruism

The rise of location-based platforms such as Facebook's "Place" feature, Foursquare (social network), and Gowalla have made a number gamification techniques mainstream.

• Achievement "badges"
• Achievement levels
• "leader boards"
• A progress bar or other visual meter to indicate how close people are to completing a task a company is trying to encourage, such as completing a social networking profile or earning a frequent shopper loyalty award.
• Virtual currency
• Systems for awarding, redeeming, trading, gifting, and otherwise exchanging points
• Challenges between users
• Embedding small casual games within other activities.

Humans have been playing games in various forms since the days of the caveman, and competition is deeply ingrained in the human psyche. Given this wide acceptance of gaming and the emergence of the internet, people have become more open to game mechanics in other parts of their lives. As a result, “gamification” is becoming a powerful tool that organizations teach, persuade, and motivate people.

Whether it is Frequent Flyer Programs, Samsung Nation, Nike and iPod's Nike+ or Starbucks or American Express & Foursquare we all at play. 

[Sources: October 2007, Bunchball; September 2010, Badgeville, Beyond Gamification: 7 Core Concepts for Creating Compelling Products]