Episode 40 - Gamification for Retention

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📰 Top Story Gamification for Retention

First, let's define gamification: It uses progress-reward mechanisms to drive desired customer behaviours. Ultimately, it's about ensuring that the customer feels they get a benefit for taking action. When customers feel a sense of achievement, a small release of dopamine occurs, and ultimately, that is what gamification is about: creating an emotional connection or hook that brings the customer back for more. 

It is not, as some people mistakenly think, about bringing games into your business or brand proposition but more about using game-like concepts in non-gaming contexts.  

Tinder is an excellent example in that they have gamified dating. Swipe right, and if you get a match, the reward is confirmation that somebody likes you, and dopamine is released. 

Let's look at some detailed examples of how and where you can use gamification to drive customer retention. 

Checklists

In episode 4 of this newsletter, I explained why early life is often the most significant opportunity for retention-led growth, since it is often when churn is highest. 

Often, brands assume that once converted, your customer is sold on your brand. However, in any subscription or recurring revenue context, in early life, customers are still evaluating whether you fit their needs. So you must: 

• Remember, customers want to hear from you a lot 

• Reassure them they have made the right decision

• Try to create an emotional connection 

• Help them get to a result fast  

To be effective, you need to help customers get the most value out of your product or service. 

A straightforward and highly effective gamification mechanism to do this is to leverage checklists. 

The Zeigarnik Effect, named after the psychologist Bluma Zeigarnik, is based on the idea that people remember unfinished tasks better than finished ones. 

In early life, customers want to hear from you and they want to know what to do. A checklist gives them the instructions they need to get the most value from your product or service.

You can reward the customer with a progress bar, profile % ratio or even incentivise checklist completion. 

The Zeigarnik effect is directly related to the Ovsianka effect, which states that people want to finish what they start.

An empty checklist nags at the customer (Zeigarnik Effect), and as items are ticked off, customers have an intrinsic psychological desire to finish what they start (Ovsianka effect).  

These items on the checklist nag at customers until they complete them. 

One example comes from LinkedIn, where you get a profile completion percentage when you first join. This percentage continuously nags at you until you complete it. The benefit for you as a user is that you get more value from the platform, and the benefit for the platform is that you are more entrenched because you are leveraging a richer suite of functionality. 

This is also something that SKY Bet has done well in the past. This checklist encourages customers to take a range of free-to-play and paid actions, which results in the accumulation of points which can be redeemed for a free bet: 

The key is not to make the tasks too hard while providing a strong sense of progress. 

The Power of Streaks and the Case of Duolingo 

Another effective gamification mechanism is to leverage streaks. 

A streak tracks how many days in a row someone has used your app and then shows them that number.

This is the idea that if you do something each day, the value builds up over time, and apps like Duolingo allow you to track and share your progress, as well as providing digital rewards and badges when you reach streak milestones. 

Duolingo doubled down on streaks because customers completing a streak of 10 days or more had much higher early-life retention (source: Jorge Mazal former CPO of Duolingo).

Since the name of the game for Duolingo's is actually Daily Active Users, streaks have become a fundamental part of the app. 

Yann Leonardi takes this a step further, suggesting that Duolingo does not really care whether you learn a language or not; all they care about is whether you use their app. He raises a valid point: Has anyone actually learnt a language using Duolingo? Please let me know if that's you ([email protected]).

But what is true is that Duolingo are the masters of gamification and social currency. 

The lessons are so short that they are easy to complete, giving you a sense of accomplishment. If you miss a day, your streak returns to zero (unless you pre-purchase a streak freeze). Notifications actively encourage you to take the next lesson, and when you reach milestones, you are rewarded with special badges to demonstrate your achievements in the app. 

As of the end of 2024, Duolingo had 117 million monthly active users, and to date, 8 million people have completed a 365-day streak. That is 8 million people using the Duolingo app every day for a year! Ultimately, streaks, short, bite-sized lessons, and the psychological desire for accomplishment without doing work drive that success. 

Other gamification mechanics 

Other gamification mechanisms that work well with both checklists and streaks are: 

• Levels - allow users to advance through different tiers as they engage more with your product

• Quests - provide short-term specific tasks to complete and reward accordingly.

• Badges and achievements - Offer virtual tokens of accomplishment for completing specific actions or milestones.

• Leaderboards - Show users how they rank compared to others. 

Final thoughts 

Gamification leverages proven psychological triggers that keep customers engaged, build habits, and strengthen retention. Brands that are the most successful at gamification design experiences that tap into progress, achievement, and consistency.

Do you have brilliant examples of gamification in retention? If so, I’d love to hear from you. Message [email protected] 

Until next week,

Tom

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