Gamification, or the use of game-play mechanics to make non-game activities more fun and engaging, has taken off in a big way. Multiple gamification companies made appearances at’s DreamForce 2012 conference this week with apps that gamify sales via leaderboards and rewards. Gamification resembles the old airline loyalty programs, but now companies can access much more data and feedback from users that can make gamification more scientific and effective.

At the MIT/Stanford Venture Lab, Margaret Wallace (far left above), chief executive of Playmatics, led a discussion about gamification at the Stanford Business School in Palo Alto, Calif. From left to right, the speakers included Courtney Guertin, chief technology officer of Kiip; Rajat Paharia, founder and chief product officer of gamification firm Bunchball; Amy Jo Kim, game designer and CEO of ShuffleBrain; Joshua Williams, senior software design engineer at Microsoft; and Andrew Trader, venture partner at Maveron. They talked about subjects such as intrinsic rewards and gamifying fitness. Here are some of the choice quotes from the second part of the panel. And here’s the link to part one.

Wallace (pictured right): Amy Jo, I know you talk a lot about intrinsic motivations, and recently you’ve been speaking a lot about how gamification can lend itself to all kinds of collaboration and problem-solving. Could you describe, in broad strokes, how that plays out? Do people take on different roles within the collaborative setting? If you’re trying to do smoking cessation for health care gamification, just as one example, how does that play out? What have you seen in your work?

Kim (pictured left): That’s a great question. It plays out in a lot of different ways. I can speak most authentically to how I’ve actually used it, which is not the whole shebang. Rajat has a lot of insight into how that’s playing out in the enterprise world, which I’d love to hear more about. There’s a few ways that plays out.

One of the seminal experiences in my professional life was working on the first version of Rock Band. That’s a game, as you know. But my job was really all the social design and the social systems. Okay, there’s the personal progress aspect where you’re gaining points and leveling up and playing big venues. But there’s very much a social aspect where you form a band and your band has its own area online. So we put a lot of effort into thinking about how to make that fun. How to make it fun even if your other band mates weren’t online. How to create motives to log on, so that even if you got tired of playing the game, you still wanted to hang out with your buddies. That’s something I learned about much more dealing with those. People get very tired of those games, but they want to hang out with their friends there. They’ll go to that blog or do that thing.

I learned about the power of a team commitment versus a personal commitment. That’s one thing that I always bring up with my clients and I encourage them to think about. People are often more loyal and more engaged with their commitments to a team than to themselves. Something I’ve been learning about lately that I’m really on the edge of understanding is the relationship between the fundamental points systems that you set up in your product or service and the opportunities that you open up, either for collaboration or competition. The punch line is that if you set up personal progress metrics — meaning XP or something like XP, points that you get for your own actions, and then you level up with that — that very naturally leads into competitive game mechanics like leaderboards. You can slap that on. That’s pretty easy and pretty straightforward.

You can layer groups and teams on top of it. World of Warcraft is a great example of that. You’ve got this fundamental XP engine driving all of it, plus this team dynamic with groups, and then a large-scale competitive dynamic with factions. That’s fantastic for very keen collaboration. “Oh, my guild needs me! Honey, put the kids to bed, I gotta go on this raid!” But there’s another thing that’s emerging from this other side of social media and the social metrics that you can track. Personal progress is pretty easy to measure through your own actions. Then there’s this other kind of points system which is fundamentally social, right from the ground up.

For instance, you might measure it, but you might not show it. What you might show people and highlight is their social contributions. How many people responded to their content. How many groups they joined and were active in. You measure how they’ve been contributing socially, and then you start opening up opportunities based on their very fundamental metrics. What I’m finding with my own clients is that if you start by laying a groundwork that’s social from the get-go, not focused on personal progress and competition, all kinds of different opportunities emerge. Sometimes we don’t even know what they are until we’re in optimal beta. That, I’d say, is the frontier, for one thing. I’m also very closely looking at companies like Kickstarter, which to me is just a phenomenally important model that’s not just changing the nature of funding and patronage, but of participation. I’m looking at that. I’m looking at Code for America. They’re doing a bunch of stuff you could call gamification, but it’s very grassroots. A lot of it’s lightweight. They’re engaging people civically in a way that’s deeply collaborative, but very much about caring for your own little neck of the woods and why you need to make it better. It’s great.

Williams: I wanted to say something about this idea that individuals can continue to progress in the game, and then there are bonuses associated with encouraging their teammates to accomplish something as well, so they can progress in the game even more. In a lot of the games we have, we have the role of the game master, someone who does things like cheerleading and reminding people who the game is going on and things like that. By having an opportunity in the game where people can encourage their teammates or invite their teammates to do things, it takes a big burden off the game master. It becomes a much more … I’m inviting everyone to go with me on this journey, as opposed to the game master sending out a reminder all the time. It has a really positive effect on the game.

Trader: Building off this social context that we’re talking about, I think it’s really important to acknowledge where we came from to arrive at social gaming. 2006 was not that long ago, right? Yes, there was a time before your iPhone. There was a time before Facebook was rampant. There was a time before FarmVille took over your feed. Our proposition going into Zynga was that we could bring games to a mass market. We did a few things. One, we made games fun, quick, and easy. We made them real social, so you were playing with your real friends. You allow the user to express themselves through the game. If we could accomplish those three things, we could reach the mass market with online games and social gaming.

There’s different ways to apply those ideas. Some are collaborative and some are competitive. I think it’s interesting to think about what those underlying compulsions feel like to the consumer. You’re eliciting different kinds of actions from the user. You’re motivating them to do different kinds of things. Whatever it is that you’re trying to accomplish. So how are those things applied to the things that we use every day? Reward programs, for example. Did anybody wake up today and say, “Gosh, I gotta get on to my United Airlines mileage program! It is so much fun!”? One of the big failures in this area is, you look at the daily deal sites. I look at Groupon and LivingSocial. I think they’re worse than United is. They are desperate to try to find a way to deepen the loyalty, their users’ loyalty to the sites. And yet, for me, as a consumer, I’m loyal to the market. I don’t care who delivers my deals, so long as the next deal is there. That’s it. That’s a huge missed opportunity.

When you think about it … Okay, what if Groupon rewarded me, encouraged me, motivated me through gamification…. So, therefore, giving me credits, and whatever I could do with those credits is up to them. You could think about getting cash within their program, or allowing me access to offers that other users don’t get. But whatever it is, to get there, what could they do? Well, you could motivate me to customize my profile. That helps them and it helps me. That would be a better user experience for me, and it would help them drive their conversion rate. What about sharing an offer with my friends? What about helping get my friends to actually take advantage of offers? I know these things seem obvious, but why aren’t they doing it? I know that this is a sore point for Andrew Mason, the CEO of Groupon, but I had this conversation with him two years ago.

Wallace: You must see a lot of folks come to you and pitch you a lot, and I’m sure some of them have some gamification elements. How can you tell if they get it or not?

Trader: You’ve got to start with a product or service that’s inherently valuable. That’s the biggest miss. Entrepreneurs come at this from the perspective that … Something that’s somewhat interesting, you can make it valuable by putting game elements around it. See, the table stakes are having a product or service that’s super valuable and compelling on its own to the user. Then, you apply game mechanics to it. That’s a way to deepen a relationship. That’s a way to drive engagement. That’s a way to lengthen attention. That’s a way to extract more value fairly from the user.

Maveron has three focus areas. We focus on online health and wellness, online education, and online consumer services like e-commerce and mobile apps. In online education, we are investors in something called Livemocha. Livemocha is social language learning. They’ve done an amazing job of applying gamification to their language learning marketplace. The way their service works is, I interact with a native speaker somewhere around the globe. I want to learn a language. They want to participate in a network and have a conversation with somebody who’s interested in learning a little bit about their culture. But they’ve added these elements where I get coins, I get currency in a game or the service for completing levels or achieving goals. Also, I get currency for helping other people. That’s a really good behavior that they’re trying to drive.

Wallace: Josh, when you’re working on games and applications in the productivity space at Microsoft, you said a few surprises have come up along the way. Like, for example, leaderboards and how leaderboards are leveraged. Can you tell us about that?

Williams: Leaderboards we’ve found to be tricky. Microsoft has no shortage of type A personalities. But leaderboards are great for people who are really aggressive, hardcore players and they want to get to the top. That can motivate them. At the same time, I’m not that person. I don’t do leaderboards. The guy at the top has 500,000 points and I have eight. To me, that’s a turnoff. So there are side effects. We’ve done a few tricks to kind of turn that on its side. Instead of the top guy getting the award, among the top 10 or the top 20 we do a drawing among people to see who gets something. That softens it. Maybe I can fight my way up into the top 20.

We’ve also done things where, instead of a straight leaderboard, we have a layer of abstraction. We say, “On a given day, I can accomplish X. If the next day I beat my personal best, then that gets me a point.” So now I’m competing against my previous best instead. That’s what earns me points on the leaderboard with everybody else. Now it really levels the playing field quite a bit. We had a game where your job was to set up machines running overnight automation. It turns out that the guy who owns the lab, who has 500 kids at his disposal, can pretty easily top the leaderboard. But this layer of abstraction takes that away. Can he go from 500 to 501 the next day? If he can, that earns him the same point as if I go from one to two. That really normalizes the amount of effort we have to put out each day. The leaderboard itself, again, is great for guiding people’s behavior. Even this abstracted version is still a leaderboard, but it lets people play on a more normalized playing field. It’s less likely to result in people getting discouraged and giving up.

Wallace: I love that example. Both you and Amy Jo have talked about abstracting, taking something like pointsification or leaderboards and abstracting that to another layer of meaning for the user. I think that’s wonderful. Amy Jo, what about fun? Is fun a necessary part of gamification? Inherently necessary?

Williams: Well, it’s about engagement, right? It’s about making a compelling experience. Or making it an additionally compelling experience on top of what you’re already doing. You should have something that’s compelling to do in the first place. This is an add-on that maybe draws a longer-term engagement.

Kim: I think that, as Margaret said at the beginning, gamification means different things to different people. It can mean something that’s a lot like a loyalty program. It can mean a tutorial like Ribbon Hero that works more like a game. It can mean very different things. What I see is that, within the next few years, it’s going to stratify. We’re already seeing the signs of this. As you know, game techniques applying to education is really going to become its own thing with its own best practices. Whereas the enterprise work is very different, and has different goals. A colleague of mine working in enterprise at SAP told me that he thinks the core of all gamification is fun. I asked him why he thought so, and he said, “Because we desperately need more fun at SAP!”

So I understand that it’s correct from where he’s sitting. That’s what makes sense to him. But I did a progression design for an online for-profit university called UNow. We were working with the people who were putting this together and trying to deliver a quality education to very low-income people who were taking time from their families and their jobs to do this. The core of what we were defining around was the carrot of … “If I can do this, I can get a better job.” That’s what was motivating them. The fun factor was just about irrelevant to that particular audience. What was important was a really clear sense of progress and help in taking on what seemed like an insurmountable task. Breaking it into a series of manageable goals. That was the core of what we designed around, plus really compelling feedback at the right moments. Fun was not the core. I think what’s going to happen is that in some segments, in some verticals, fun is key, and very important. But if you’re thinking “I want to know what I can learn from games, I’d like to apply this to what I’m doing, but what I’m doing doesn’t really want to be fun,” that shouldn’t stop you from pursuing these valuable techniques.

Wallace: Can you give us what you look at as examples of key performance indicators for gamification? How is it measured, and where are some examples of success?

Paharia: There’s no one answer to that. It all depends on what you’re using it for. Whenever we sit down with one of our customers, we always start with the key business objectives. If you’re trying to get salespeople to sell more, it’s if they sell more. If you’re trying to get kids to exercise more, it’s if they exercise more. If it’s trying to get more page views on your site, then you start with that end and you work backward from there. What are the behaviors that lead to that, and what motivates those users and what can we do with this palette of tools that we have in order to create an experience that satisfies end-user needs, while at the same time accomplishing the business goals?

In the case of a USA Network show called Psych, it was all about page views, time on site, visit frequency, things like that. In the case of, it’s about getting salespeople to sell more. In the case of HopeLab, I used to love these guys, it’s a non-profit organization trying to get kids to exercise more. They gave out this activity monitor. It looks like a USB stick. Kids plug it on their belt and run around all day. At the end of the day they plug it in to their USB port and it uploads all their activity data. For every 10 minutes they spent on a certain activity zone, they get points. Certain days are double points days, things like that. They can then take those points and redeem them for either virtual goods or parent-funded real-world goods. They’ve been able to show a 30 percent increase in activity amongst those players, the equivalent of running an extra marathon every month. So again, it all stems from what you’re trying to drive at the end. Then you set up the measurement plan from the beginning to make sure that you can factor in all that data.

Wallace: With Kiip, the rewards platform, what kind of things do you look at to measure success? And how do you work to ensure that the rewards are meaningful? Whether that’s through design or through your site algorithms….

Guertin: There’s several things. One of which is, for different types of verticals — we have our health and fitness channel, we have our gaming channel — the developers do know, somewhat, what the average user is. Demographic and age, things like that. But you’d be surprised at how many people don’t know. So we went and we just drew in lots of different feedback. “Hey, do you like this reward? What do you want to see?” We asked them the question: “We can give you better rewards if you just tell us about yourself and what you like.” The first time we did those surveys, 57 percent of people responded with their gender and their age. We saw a huge increase in terms of redemption. It’s testing out new things.

We made a mistake when we first had this, as you always do. We had Carl’s Jr. and Hardee’s rewards. You go into Hardee’s and redeem that, you get a shake or a burger, things like that. Kind of cool, right? Well, not very cool if you just ran a 5K. The people redeeming these rewards were not using fitness apps. The fitness app developers were not totally pleased. And so obviously we added different triggers.

Wallace: Should the IRS, in the process of filing taxes, be gamified? Is that hype, or the real world?

Paharia: It’s absolutely possible to do that. Throwing out another example, Adobe with Photoshop. Here’s a piece of software that’s probably as complex as doing your taxes. I was a designer at world-leading design innovation firms for years, and I never learned how to use Photoshop. I downloaded the trial version, it took another 25 minutes to install it, I opened it up and it’s a blank white canvas with 10,000 panels and buttons. It’s not likely that at the end of 30 days, I’m going to buy it and spend another $800 dollars. What those guys did is they built an app called LevelUp for Photoshop. Now the out-of-box experience is, a panel pops up saying, “You want to learn, we want you to win, go through this gamified tutorial, you’ll earn points and we’ll give you a chance to win Adobe products.” Which is almost completely beside the point. You spend 50 minutes of your life getting to this point, clearly you want to use Photoshop. And they’ve always had all this tutorial content and videos and lectures. But nobody knows to look at it because it’s not compelling. They just want to get in and crop a photo and remove redeye or something. What this did is it created…. The hypothesis was to create 12 missions, each of which teaches somebody about one key thing. Teeth whitening and so on. Three levels, four missions in each level. You can’t get to level two until you do all the level one missions. You’ve got a progress bar showing your progress through a level. You earn points as you complete them and unlocking badges. You share it on Facebook and tell your friends you’re kicking ass at Photoshop.

What they’re seeing is that people who go through this are converting at a much higher rate, because at the end of doing this, they’ve been exposed to some elements of functionality. They’ve felt a sense of mastery and fluency at this tool. And they directly experienced the benefits of doing it. If you can imagine FarmVille … Say you open FarmVille and what you see is a brown plot of dirt. That’s the onboarding experience of FarmVille. How many people would be playing FarmVille? But no, Farmer Pete comes up and he says, “Click here to pick the strawberries, click here to plant them, fast-forward the clock four hours to harvest them,” and in five minutes you’ve learned how to play FarmVille by playing FarmVille. That same idea can easily be applied to the IRS and taxes or any other complex process.

Question: In so many games, like role-playing games and action games, there’s an end boss, an endgame. You beat that boss and you feel a sense of achievement and suddenly it’s over. In a lot of examples that you’re talking about, it’s a grind forever. Does that have to be the case? Can there be a point where it says, “Do this and the game is over, you’ve achieved something”? Or does it go on forever?

Williams: In a lot of games we’ve done, we do have an end point, which is time-based. You see how much you can achieve in this time and then it’s over. We do that for a couple of reasons. One of the big reasons is, people do lose interest over time. The game mechanic is going to seem worn out and overplayed and you need to make a new experience. We put artificial constraints on the games we do, because we don’t want people getting bored and frustrated with it, and it ruins the brand if we do another game in the future that’s going to work for us. We don’t happen to use the mechanic of a boss. There’s not one thing that’s harder at the end than anything else and then you’re done. Although that’s certainly a mechanic that could be used.

Trader: In my mind, I think that there’s a real opportunity here. Where does gamification go from here? I would suggest that there’s an enormous opportunity to leverage the social gaming mechanics, plus gamification, plus social, in a much sneakier way. When I think gamification elements, it’s a leaderboard, it’s progress, whether it’s collaborative or competitive. But it’s also the underlying social game mechanics, which drive the compulsion. This is what fuels the addiction. You didn’t wake up this morning and say, “I want to be a farmer today!” You said, “Holy shit, I can’t pick my strawberries late!” That game mechanic, that harvest mechanic, and so many others, those are very powerful underlying social game mechanics. I think applying gamification with those underlying social game mechanics, and social in a more deep way, is where we’re going to go with the experience in a whole bunch of different services. Why don’t I get all my news from my friends? Why don’t I get all my entertainment and ratings and reviews from my friends? It’s one of the problems I have with Yelp. I think Foursquare is another good example. I go to Yelp, and I don’t know the people are who are reviewing these things. If I have a seven-year-old daughter, I feel very differently about the kinds of restaurants and movies I go to, than if I’m a single 20-something. I feel like there’s going to be a second generation of social services that leverage all three of those components.

Wallace: What are the most exciting ways the health industry is leveraging data in terms of gamified practices?

Paharia: This is really hard. Honestly, I talk to a lot of health companies, and it’s like joining a gym or buying some new exercise equipment. People get really excited and they run around for a couple of weeks, and then it becomes the norm and it gets boring. It’s not exciting anymore, and then you’re done. You’ve just got another useless trinket. Building a game around health is really hard, because the feedback loops are so amorphous or big. I want to lose five pounds, so I go to the gym, but I don’t lose five pounds. It takes me like a month of going to the gym to lose five pounds, and I’ve got all this time in between updates. There’s a bunch of people have tried it. You see all these devices, but nothing has worked. I think it’s just a really hard problem.

[Photo credit: Dean Takahashi]

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