Eight Ways Insurers Can Boost Performance with Gamification
Here’s how forward-thinking insurers can use gamification to improve sales, marketing and brand perception.
For some insurers, gamification has introduced significant business benefits, beyond customer loyalty and employee engagement. Others, meanwhile, have shelved their initiatives due to little or no returns, high maintenance costs and the need to focus on other opportunities.
The difference maker: Thoughtful and thorough upfront planning and design. To that end, here are the key pitfalls to avoid in gamification design and some practical advice on aligning gamification with eight specific business goals to realize a return on investment.
Put simply, a successful gamification approach balances game mechanics (badges, levels, and leaderboards) and game dynamics (achievement, reward, status) to motivate users to change their behavior in a way that supports strategic business goals. For example, health insurers might invite customers to use their fitness wristbands to participate in real-time challenges with their peers, with the goal of promoting physical activity and a healthy lifestyle.
Even better, some organizations also capture, analyze and apply the data generated by usage patterns and user feedback to create an even more personalized gamification experience. (For more on this approach, read our white paper“Gamification 3.0: The Power of Personalization.”)
While Farmers, Aetna and Allstate have played winning gamification hands, others have encountered major issues, including the following:
Badge fatigue. Rewards such as levels, badges and points are extraneous motivators; however, successful games are designed with essential motivators in mind. Without a proper balance between intrinsic and extrinsic motivators, users can quickly lose interest.
Loyalty backlash. When rewards are not aligned with strategic objectives, and game mechanics fail to consider customer needs, the result is disengagement and degradation of the brand.
Collaboration/competition dilemma. If the game objective is to encourage collaboration, contests and leaderboards can potentially have the opposite impact, particularly if players see others as competitors rather than partners.
Aligning Games with Business Benefits
The following uses cases describe how gamification can be applied to align with specific business goals:
By incorporating gamification elements into CRM systems, insurers can encourage sales agents to be proactive and take positive actions, thus increasing team-building and self-directed professional development.
Target new products.
For new products such as peer-to-peer insurance, individual leads are not sufficient. Insurers need a low-cost solution to enable group lead generation, understand the target group for risk pooling and suggest products that match risk. A social-media gamification solution can encourage collaboration in the peer network, which enhances lead generation, facilitates product knowledge and serves as a low-cost distribution solution.
Scarcity of high-quality underwriters is a big challenge for insurers. A gamified collaboration platform in the form of an internal help forum can facilitate knowledge-sharing among underwriters, helping the organization overcome skills gaps, improve turnaround times and provide support for complex tasks, such as risk assessment.
Gamification can increase employee engagement when it comes to learning and adhering to corporate security policies by focusing game dynamics on areas such as status, achievement and self-direction. The use of a storyline helps employees see things from the perspective of a security breach victim, increasing their involvement in safeguarding corporate assets.
Encourage customer wellness.
Over 50% of all deaths worldwide are due to lifestyle-related diseases. Using gamification, health and life insurers can offer highly competitive premiums, discounts and rewards for adopting a healthy lifestyle, resulting in a more positive experience for the customer, reduced fraud and elimination of unnecessary payouts.
Increase new-product sales.
As product lifecycles compress, the rate of new rollouts is at an all-time high for many carriers, placing a burden on sales agents. Gamification can spur positive, long-term behavioral changes in sales agents, motivating them to promote new products and rewarding them for increasing their knowledge and the quality of their pitch.
Insurers with minimal brand recognition often struggle to enlarge their customer base. By adding gaming elements to their marketing and advertising in the form of social media games, insurers can increase brand awareness, affinity and intent to purchase, as well as increase conversion rates among Gen X and millennial customers.
Increase self-service usage.
Gamification can motivate customers to use available self-service options. This can reduce operational costs, improve the customer experience and drive ongoing engagement through incentives and rewards.
A Gamification Prioritization Framework
To prioritize their gamification opportunities, insurers should evaluate the complexity of the initiative and what it will take to realize success vs. the business value they will achieve. Business value can be anything from revenue generation, to cost savings, to recall, while complexity can be quantified in terms of cost, effort, risk and technical challenge. See below for a complexity vs. value matrix for each of the gamification use cases referenced earlier.
Gamification can be a positive disruption for insurers, spurring higher conversion rates, higher revenue per person and more success in cross- and upselling, as well as better brand perception and a stronger customer experience. To validate alignment with strategic goals, businesses should classify benefits by business or organizational impact, including:
By identifying business objectives, supporting them with a solid game design and developing a robust ROI framework, insurers can build a sound business case for exploring and successfully implementing gamification across the insurance value chain.