Category: Gamification Study

Loss & Avoidance Design: Ultimate Loss vs Executable Loss

(Below is a snippet of Gamification Book: Actionable Gamification – Beyond Points, Badges, and Leaderboards. If you like this blog post, you will LOVE the book.)

Core Drive 8: Loss & Avoidance can be a tricky Core Drive to manage. If done improperly it can demoralize the user and lead to churn.

One important thing to keep in mind is that Loss & Avoidance is motivational in a proportional manner. The way users respond to Loss & Avoidance is generally proportional to how much they have already invested into the experience.

If users have played a game or used a product for ten hours, they will feel a more substantial loss than if they had invested only ten minutes. Starting over after losing is definitely more impactful on a player that’s invested a few days into the game and is on level 37, as opposed to a player who just started and is on level 2.

The key strategy here is that the experience designer should dangle the threat of a large setback (the Ultimate Loss), but should only implement (if at all) small marginal setbacks (the Executable Loss) to emotionally train the user in taking the Ultimate Loss more seriously. The Executable Loss reinforces the avoidance.

As a general rule from my own experience, the Executable Loss should never be greater than 30% of what the user has already invested in time and/or resources, and ideally never more than 15%. Generally a small loss of 2-5% is enough to motivate users to take the activities seriously. If the users lose over 30% of what they have originally invested, the odds of them feeling demoralized and quitting become extremely high.

Loss & Avoidance Design in Employee Motivation

Since it benefits no one if the user actually suffers heavy losses, it’s best to utilize the “ultimate loss” as a form of expectation management, with the system creating “grace systems” that the users appreciate but do not abuse.

For instance, in the workplace the manager may make it clear that performances below a certain level will result in being let go. So everyone becomes motivated, in a sure but limited sense, to avoid the dreadful loss. This Core Drive 8 manager may even exercise small loss-events ranging from pep talks, moving people off important assignments, to publicly scolding them (hint: generally a terrible idea). All to make sure the employees emotionally acknowledge this sense of loss, and are motivated to work harder.

However, when an employee has failed the performance goal and fully expects to be let go, the manager may execute another option. Knowing full well that turnover and retraining new talent is the least preferable outcome, the manager can tell the employee that the organization appreciates his effort and hard work, and that they will give him another chance to hit the target.

As you can see, the Ultimate Loss here is not actually implemented, but instead wielded as a black hat motivational tool. After this, the employee may appreciate the second chance and become more motivated to do the work. This then becomes an example of Core Drive 8: Loss & Avoidance setting up for Core Drive 5: Social Influence & Relatedness, where the employee potentially starts to work harder because of a new sense of gratefulness towards the manager.

Happiness is Determined by Expectations

Expectations have everything to do with happiness and motivation. A hungry teenager in a poor country will have an extremely difficult time understanding why a perfectionist student in a developed country would be depressed for three weeks simply because she received a “B” in school. On the other hand, a student who expects to fail the class celebrates for a week when they obtain a B.

Similarly, a billionaire who lost a lot of money and became a millionaire might end up committing suicide, while the average person who end up with a million dollars would become ecstatic. From my own observations, our happiness is almost exclusively determined by our expectations matched against our circumstances. Based on that, the easiest way to become happy may be to adjust our expectations and appreciate what we do have, instead of becoming upset because of the things we don’t. Even many marriages fail because of unrealistic expectations for each other, leading to built up bitterness over the years that plagues the soul.

When it comes to interactions with people, it’s always easier to start off stern and then become lenient, rather than being nice and then executing harsh punishment later. The dynamic between Core Drive 8 and Core Drive 5 often determines the relationship between landlord/tenants, teacher/students, employer/employees, and government/citizens.

Of course, if the employee starts to take the second (or third, fourth etc.) chance for granted, then it is crucial to maintain the credibility of the Loss & Avoidance system and let the employee go. If the ones breaking the rules aren’t facing any real consequences, it demoralizes the experiences of those that are performing their parts, and overall motivation plummets.

With that said, one thing to always remember is that this same slacking employee may shine like a star if the manager actually implemented more White Hat motivation. Motivational designs such as providing more autonomy, feedback, and meaning, as opposed to pure punishment systems. However, since the scope of this chapter is to explore the nature and effects of utilizing Core Drive 8: Loss & Avoidance, we focus mainly on the uses and effects of that Core Drive.

Careful Transitioning between White Hat and Black Hat Gamification

(Below is a snippet of Gamification Book: Actionable Gamification – Beyond Points, Badges, and Leaderboards. Please subscribe to the mailing list on the right to order the book when it launches. This post may be moved into a Premium Area after a certain period of time).

So now that we’ve covered the nature and differences between White Hat and Black Hat gamification, how do we blend that knowledge together into our designed experiences?

In general (with some exceptions), it is better to first setup a White Hat environment to make users feel powerful and comfortable, then implement Black Hat designs at the moment when you need users to take that one Desired Action for conversion. At that point, users will likely take the Desired Action, but won’t feel very comfortable. This is when you transition quickly back to White Hat motivation to make them feel good about their experience.

An example of this is seen in the previously mentioned game Battle Camp. In Battle Camp, there are often scenarios where you are in a “Troop” with twenty-four other players and the whole group needs to battle a big boss. Typically, you would have eight hours to fight this boss, where everyone needs to come back every fifty minutes when their energy is recharged (remember this technique is called a Torture Break), and then use that energy to attack the boss.

At times, after seven and a half hours, the will boss still have 20% of his health, and you begin to realize that your troop will not be able to defeat him. At this point, you basically have two options. Option one: you lose to the boss, and twenty-five players all waste eight hours of their time, not to mention falling behind other troops that will be ranked much higher after they defeat their boss. Option two: spend $10 and purchase more energy in order to beat the boss.

Because it is such a devastating event when everyone loses eight hours of their precious time, there is a fairly high chance that you will feel compelled to take option two – buy the energy needed to defeat the boss, especially if you were also the leader of the troop.

Now, we see that you were motivated by Core Drive 8: Loss & Avoidance when making this purchase – again, very compelling, but you feel fairly terrible afterwards. After you defeat the boss, if that was all and nothing special happened afterwards, you would feel pretty demoralized and perhaps subconsciously wished you weren’t playing the game anymore.

However, this is when the game starts to shower you with White Hat Motivation by showing you how great of an achievement you accomplished (Core Drive 2: Development & Accomplishment), and the rewards or trophies you have obtained (Core Drive 4: Ownership & Possession) because you have beaten the boss. On top of that, your teammate will often start cheering for you (Core Drive 5: Social Influence & Relatedness), “Wow! You spent real money just to save our troop. You are our hero!” Being sprinkled by all this emotional confetti, people often start to think, “Hmm, maybe that was $10 well spent after all!” And this eventually trains their brains to be more open to spending the next $10 to buy energy and defeating the boss when necessary.

No Buyer’s Remorse from TOMS Shoes

Similar to the Battle Camp example, businesses should consider creating an environment of White Hat motivations, use Black Hat techniques to convert users, and then revert back to a White Hat strategy to make users feel more comfortable again.

The initial White Hat environment is for people to take interest and have a good opinion of your system in the first place. A venture capitalist wouldn’t want to invest in a startup if he didn’t first consider it world-changing and a smart investment (Core Drives 1 and 2), even if there was convincing apprehension that he may lose the deal. (Oddly enough, some investors still plunge under the pressure of Scarcity and Loss, even though they have previously determined it to be a worthless idea with no future).

Once people feel comfortable in your system but aren’t necessarily taking the strong Desired Action, such as making a purchase, you can then use the Black Hat techniques within Core Drives 6 and 8 (and sometimes Core Drive 5), to close the deal. If the user ends up buying the product, you want to reassure them that, if true, this is indeed the smartest purchase possible (Core Drive 2), that legions of others also made the same decision (Core Drive 5), and that it positively improves the world (Core Drive 1). This will likely ensure that customers don’t feel buyer’s remorse.

When you buy a pair of TOMS Shoes and begin to feel a little regret for making an expensive purchase, they hit you with reaffirming information on how your purchase has made a tremendous difference to a poor child in Africa – one who couldn’t afford a pair of shoes and had to walk barefoot to fetch water for her family. When you see that, you instantly feel good again about your purchase. Subsequently, whenever you see your shoes, it will remind you that you are a decent human being that benefits the world.

It is the same thing with donations to children in developing countries. When you make a commitment, the non-profit will continuously send you pictures, thank-you letters, sometimes even something written by the “adopted” child to make you feel that you have truly made an impact in their lives. Of course, there is nothing wrong with sending donors these pictures and letters for such a noble cause (unless they are falsely manufactured) as these donors are truly making a big difference in the lives of the less fortunate. In fact, it would be a mistake for any charitable organization to *not* show visual and social information on the impact they are making in the world. We would all like to see some Feedback Mechanics after taking Desired Actions.

As you design your experiences, never forget that if you want good Endgame design, you *must* immerse your users in White Hat Gamification techniques.

Bad Shifts from White Hat Design to Black Hat Gamification Design

(Below is a snippet of Gamification Book: Actionable Gamification – Beyond Points, Badges, and Leaderboards. Please subscribe to the mailing list on the right to order the book when it launches. This post may be moved into a Premium Area after a certain period of time).

When you switch from White Hat motivation to Black Hat Motivation, you need to make sure you understand the potential negative consequences. As an example, there was a day care center in Israel that had a problem with parents being late to pick up their kids. Researchers Uri Gneezy and Aldo Rustichini decided to conduct an experiment and implemented a test policy where parents would be charged $3 every time they were late.

Now a typical economist will tell you that this penalty would result in more parents picking up their kids on time because they don’t want to lose money. However, the plan ended up backfiring – even more parents were now arriving late. Worse yet, when the daycare center realized this wasn’t working and decided to remove the penalty fees, more parents *continued* to be late.

The plan backfired because they transitioned the parents’ motivation from Core Drive 1: Epic Meaning & Calling (as well as Core Drive 5) to a weak form of Core Drive 8: Loss & Avoidance. Originally the parents tried to pick up their kids in a timely manner because they inherently wanted to be *good* and responsible parents. They also didn’t want to burden the daycare center and its staff, so they tried earnestly to show up on time.

But when the daycare center put a monetary value on tardiness, it basically told parents that it was alright to be tardy as long as they paid the modest fee. Parents who were in business meetings or were preoccupied were therefore able to justify being late because a business meeting is worth more to them than the $3. Loss & Avoidance against leaving that meeting early was more powerful than Loss & Avoidance for losing $3.

Returning to the concept of proportional loss, we see that despite Loss and Avoidance typically being a powerful motivator, the $3 fee was just too low to properly motivate the parents in this situation. Remember I discussed about how when you use Loss & Avoidance, the loss needs to be threatening? If the daycare center charged a lot more than $3, the Loss & Avoidance motivation would become more threatening and more parents would likely comply (begrudgingly of course, which would lead to switching day-care centers soon).

Currently, there are some daycare centers that charge a $1 late fee for *every minute* the parent is late. This design actively gets parents to be on time more often. This is not only because the loss is more threatening, but also due to the parents feeling a combination of Core Drive 6: Scarcity & Impatience, as well as a bit of Core Drive 3: Empowerment of Creativity & Feedback since they feel a stronger sense of agency over end results.

Continue reading When to Use White Hat Gamification Design

(Below is a manuscript snippet of my book, Actionable Gamification: Beyond Points, Badges, and Leaderboards. Please subscribe to the mailing list on the right to order the book when it launches. This post may be moved into a Premium Area after a certain period of time).

Sweepstakes and Raffles in Core Drive 7: Unpredictability & Curiosity

In Chapter 5 on Epic Meaning & Calling, I mentioned how I started my first business because of a small raffle held at a UCLA barbeque. Raffles are fairly popular because they add an element of “fun” to an event, as people are drawn by the possibility of winning a prize. Most of the time, the “Desired Action” is for people to stay until the end of the event, and therefore the results of the raffle is announced towards the end of the schedule. Though primarily driven by Core Drive 7: Unpredictability & Curiosity (in the Octalysis Framework), these events draw power from CD5: Ownership & Possession (the desire to win a prize), and a bit of CD8: Loss & Avoidance (if I leave too early, I’ll lose my chance to win…)

As you remember when I first recounted my story, when I drew my own name out of the hat, I was also hit by a strong sense of *Calling* (from Core Drive 1) as I felt I was destined to start my own business.

My perceived *calling* compelled me to be persistent in the face of some dark days and difficult challenges throughout my entrepreneurial career. Many times at the brink of failure I felt like giving up, but because I believed that I was meant to walk this path, I pressed on and became more convinced that I could persevere in the startup world as a young entreprenuer. As you can see, being “lucky” in a scenario of chance can install a higher sense of mission and purpose. The same goes with the effects of Beginner’s Luck (Game Technique #23), where people who are extremely lucky the first time they do something feel that they are somehow destined to do it.

As you can see, the power of the raffle is more than the value of any individual reward. Beyond the prize itself (which is extrinsic in nature, stemming from Core Drive 4), the intrinsic motivation behind the “will I be lucky?” thought plays an important role in ensuring people remain engaged with the process.

Companies that use Sweepstakes and Raffles

On a larger scale, many companies that utilize social media marketing are now successfully deploy techniques such as sweepstakes to engage users with their brand and message.

Often times, these companies will give out a quest where those who commit the Desired Actions will have a chance at winning some promotional prize. Sweepstakes can vary quite a bit. The Desired Actions can be as simple as “liking” the company website on Facebook (an example of such a campaign is Macy’s marketing campaign where “liking” their Facebook profile gave fans a chance to win $500-$1,000 in gift cards.

Kellogg’s The Great Eggo Waffle Off Sweepstakes

The Desired Actions can also be something more complex, such as Kelloggs’ “The Great Eggo Waffle Off!” challenge, where entrants submitted their best waffle recipes for a chance to win $5,000.

They also utilized Core Drive 5: Social Influence & Relatedness by incorporating the Social Treasure game technique into their sweepstakes. The odds of an entrant winning the competition could either be entirely based on, or at least partially affected, by community voting.

In that way, an added Desired Action of “promoting our brand to all your friends!” comes into effect. This works great for a challenge like The Great Eggo Waffle Off since users are sending images of guilty-pleasure waffles to their friends, asking the friends to vote up their submissions. Eye candy works like a charm.

Some Sweepstakes are theme-based, tying in some Core Drive 4: Ownership & Possession or even Core Drive 1: Epic Meaning & Calling.

Dove’s Real Beauty Should Be Share Sweepstakes

Dove applies a theme-based sweepstake that is visually appealing to users. In their “Real Beauty Should Be Shared” contest, Dove asked their fans to share why their friend “represents Real Beauty.”

Instead of receiving monetary prizes, the winner gets to be the new “Faces of Dove” at various local Shoppers Drug Mart.

This is a great design, because the campaign involves photos of beautiful/confident women that attract attention, a cause that contestant friends can all get behind and support contestants on, and a prize that appeals to status while giving users a higher sense of ownership.

Tires Plus Father’s day Clock Giveaway Sweepstakes

Another example of a theme-based sweepstake is Tires Plus’ *Father’s Day Clock Giveaway*, which used an essay contest asking contestants to write about who they think qualifies as the best dad. Then participants voted for their favorite dad to determine who would ultimately take home a Michelin Man clock.

The good part about the sweepstake’s design was that its theme fit Tires Plus’ target demographics- guys who like cars. The slight flaw in its implementation was that the Desired Action required significant effort: although they used the same gamification techniques as Dove, the writing and reading of essays is a Desired Action that requires a lot of time and non-car-related effort just for a simple extrinsic prize. Core Drive 8: Loss & Avoidance prevented many people from participating. This is known as an Anti Core Drive in my framework which we will cover in detail in Chapter 16.

Coca-Cola’s Chok Sweepstakes

Some brands decide to double down on Core Drive 7: Unpredictability & Curiosity by making everything about the sweepstakes unpredictable. Coca-Cola is one of those brands that has been at the forefront of developing creative and innovative product promotions.

You can often see that Coca-Cola commercials often try to turn simple acts of drinking carbonated sugar water into a Core Drive 1: Epic meaning and Calling experience through using magical kingdoms, promoting happiness, and using friendly polar bears.

Coca-Cola launched an especially appealing sweepstakes contest for teenagers in Hong Kong. Users are offered a free app called “Chok.”

During each evening, a television commercial will run, asking fans to open the app and shake their phones to catch virtual bottle caps and earn mobile games, discounts, and sweepstakes entries.

This prompted users to enthusiastically shake their phones in front of the television screen, hoping for prizes that may or may not pop out. Because the time of the activity, whether one will win or not, and what the winner will get are all unknown, there’s a strong sense of excitement. Even in the campaign’s Discovery Phase (the phase where users decide to first try out a product or experience, which works hand-in-hand through marketing and so-called *growth hacking*), if you are watching TV with a group and you see someone suddenly shake her phone when a commercial comes on, your curiosity will surely be piqued and perhaps compel you to join.

Coca Cola strategically aligned this campaign with its brand strategy and Chok received 380,000 downloads from Hong Kong users alone within a month of launch. The beverage conglomerate claimed this campaign was their most successful marketing effort in Hong Kong for 35 years.

(Below is a manuscript snippet of my book, Actionable Gamification: Beyond Points, Badges, and Leaderboards. Please subscribe to the mailing list on the right to order the book when it launches. This post may be moved into a Premium Area after a certain period of time).

Commercially Unskippable: Power of Super Bowl Ads

Another system that has successfully implemented Core Drive 7: Unpredictability & Curiosity is the iconic Super Bowl championship of American Football – however, I’m not talking about the game itself.

Super Bowl commercials have generated a strong reputation for being very creative, funny, and interesting. Even people who don’t like to watch football want to catch the Super Bowl commercials because it’s well-known that companies had to pay millions of dollars just to snag a 30-second spot. With such a high price tag, it’s expected that the commercials will be high quality and shareworthy too.

Super Bowl commercials even receive attention from big media sites such as Yahoo! and Google which upload snippets of each commercial immediately after they’re aired.

This is very unique because for most of the time, television viewers purposely try to avoid commercials — some even pay to receive programming that allows them to skip commercials entirely.

However, because of the suspense factor, instead of turning the channel away from the commercials, people are tuning in to watch them. And because these ads are seen by millions of people, the National Football League can continue to charge high prices for their Super Bowl commercial spots.

Make your experiences suspenseful and unpredictable, and users will make sure they don’t miss what you launch next.

(Below is a manuscript snippet of my book, Actionable Gamification: Beyond Points, Badges, and Leaderboards. Please subscribe to the mailing list on the right to order the book when it launches. This post may be moved into a Premium Area after a certain period of time).

Based on Core Drive 4: Ownership & Possession, our need for consistency becomes even stronger when we create a commitment, especially when we write it down. Psychology Researcher Robert Cialdini gives many insightful examples in his book Influence: Science and Practice. 

Commitment: a contract with yourself

Social Psychologists Morton Deutsch and Harold Gerard once did an experiment where they asked groups of students to estimate the length of lines that were shown.

One group of students only had to think in their heads an estimate, while another group had to write it down on a Magic Writing Pad but would erase it before anyone could see it; a third group would not only write down their estimates, but would publicly announce their figures.

Afterwards, the researchers gave new misleading information that suggested the students’ initial estimates were incorrect, and gave them a chance to change their answers. Interestingly, the students who just made mental notes of their initial judgement were the least loyal to the judgements and changed their answers quickly based on the new information.

The students who wrote it down without anyone seeing were far more reluctant to change their answers when new contradictory information came along. And of course, with a little bit help of Core Drive 5: Social Influence & Relatedness that we will cover in the next chapter, the group that publicly shared their estimates were the most stubborn in changing their answers, insisting that they were correct the first time along.

Using Commitments to Drive more Business

This level of consistency to commitments is why car salespeople often try to pin you down by saying, “I can’t promise anything until a dreadful plea with my manager, but if I could get you this price, you will buy the car today correct?” Once you commit to that and he sure enough comes back with the price, you would feel a great need to stay consistent with what you said earlier, despite having full right to say “no.”

Similarly, a restaurant owner shared that after he switched from “Please call if you have to cancel” to “Will you please call if you have to cancel?” during reservation calls, the no-show rate dropped from 30 percent to 10 percent. This is because when people answer “yes” to the question (and most people would feel like a jackal if they said “no” to such a reasonable request), they emotionally feel more committed to take more responsibility for their reservations.

Often times, asking users to fill out their own forms increases commitment towards a behavior. When door-to-door salespeople started to ask their new customers to fill out the sales form instead of doing it for them, less people took advantage of the “cooling-off” laws where they could regret and return the product after being persuaded by Black Hat motivation techniques. Based on that, hospitals would also likely decrease cancel rates if they asked their patients to fill out the next-appointment sheets instead of doing it for them.

This is also why companies like Procter & Gamble and General Foods often run contests where people write “25-, 50-, or 100-words or less” testimonials for them, starting with, “I like the product because…”. As people describe enthusiastically how amazing these products are, they start to own up to their statements and start to see the products more favorably. Of course, they also start to see themselves as, “People who like the company product prizes so much that they are willing to participate in a testimonial contest.”

Consistency, Commitments, and Identity can be subtle forces in Core Drive 4: Ownership & Possession

This type of ownership over your identity, past decisions, and commitments can be one of the most subtle elements of motivation within Core Drive 4: Ownership & Possession. After all, you already know that you are heavily motivated by making more money, collecting stamps, or protecting your expensive assets; but you likely recognize that your decisions were simply based on what your name is and what you ate last week.