The value of personal referrals to marketers
So what exactly is gamification?Gamification is a marketing activity whereby elements commonly associated with games are applied in non-game contexts.It can drastically increase the level of engagement of a user.This is accomplished by turning potentially unexciting activities into fun. In the end, the users benefit as they are enjoying the ‘game’ and the company benefits as it is getting user engagement.Examples of gamification include awarding users with badges, points or levels for achieving certain goals, showing leaderboards that allow users to compare their relative contributions to a cause, or even offering prizes for outstanding contributions.Many online businesses use gamification, including Tripadvisor, Amazon or the Strava fitness app.Increasingly, organisations are effectively crowdsourcing their marketing – by using gamification techniques to encourage existing customers to recommend the brand to their friends via their own social networks.
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Digital Marketing: Challenges and Insights
Our Gamification ProjectWe have been investigating how to use gamification to motivate people to make referrals. In particular, what is the best way to encourage more participants in a project, or contributors in a charitable drive, or customers of a company to recommend their friends to take part?Our approach is applied – we compare various referral motivators side-by-side. Website visitors are assigned to different motivators at random.You can read about our last experiment that was done in partnership with Cancer Research UK in this guest blog post for JustGiving.
The value of personal referralsWe are all exposed to a growing amount of information and marketing. A natural reaction is to filter out all of the ads thrown at us.Many studies have highlighted a growing distrust of traditional advertising by consumers.A personal referral on the other hand carries a more compelling message. We are much less likely to ignore a recommendation from a trusted friend.When companies succeed at getting customers to make a referral, they are obtaining a very effective marketing channel. Facebook is recognising this and it displays the names of friends who “like” a particular advertisement to make it more personal.Companies like the taxi provider Uber are offering significant rewards for customer referrals in terms of free rides or account credits.
Measuring successWe have experienced some challenges in getting access to participants to carry out our research. There are a certain amount of technical changes that need to be made to a company’s system in order to implement an experiment. This takes time and resources. It is often hard to convince companies that they will benefit from this investment in the end.The main measure of success is the increase in the number of customers/users/subscribers since the experiment began. A cost-benefit analysis can be performed to show how well a given referral motivator is performing compared to other marketing channels.The approach of rapidly testing various marketing strategies and relying on existing customers to help marketing activities is even more important for small businesses and startup operations than it is for large organisations that have big marketing budgets.Without the large budgets, you have to be creative. In the start up world these activities are known as growth hacking.
Digital Marketing: Challenges and Insights
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