If you are the manager of an online store, you should always pay attention to your conversion funnel, examining how users move through this funnel. In this way, you will be able to identify obstacles and barriers in the shopping process that have an impact on conversion.
Generally speaking, the conversion funnel has 3 main stages, each of which is associated with a number of challenges. The following figure show the conversion funnel stages and their main associated challenges:
- Browse: Although a good online store probably has many direct visitors, a large part of traffic comes from external sources, be they Google (or other search engines) search results, advertising campaigns, social media presence, etc. In this first stage, a user may be looking for a specific product, trying to cover a need, or solve a problem. You should be able to “interfere” with the user’s search process and attract him or her to your online store.
- Shop: Once the user has been led to your shop, he or she will view some of the products offer, browse through the categories, etc. The user will continue to browse, but inside your store, so you have brought the user closer to your goals, and you should make every effort to make his or her experience as pleasant as possible. So you should provide simple, easy navigation, good search results, well arranged, etc.
- Buy: The last step is the purchase itself. Once a user has chosen one or more items, a purchase process starts which should be kept simple but effective.
Gamification to the Rescue
Even though there are many techniques and tools that can help you in the different funnel stages, gamification is one of the techniques that yields the best results, while complementing very well other strategies, such as personalization and behavioral targeting.
For those who still don’t know what gamification is, it should be pointed out that gamification in itself is not a game, and isn’t directly linked to social games. Strictly speaking, gamification is the integration of game dynamics within a non-gaming environment. A more informal but possibly more understandable definition is that gamification is a set of techniques for creating fun user experiences by means of the use of elements that are usually found in games, such as scores, progress bars, achievements, changing rewards, etc. Ultimately, gamification is a way of offering users an additional level of motivation in order to achieve a higher level of engagement, so that they use your application or service more, or so that users can be led to achieve a higher ratio of goals of interest for your business.
Gamification can help you in different stages of the conversion funnel, in many ways. Here are some examples of possible uses of gamification associated with the different funnel stages:
- Browse: In this stage, gamification can help you to define more interactive affiliation and referral programs. These programs will enable you to engage your current customers in the process of capturing new users by means of a system by which users compete among themselves, with users who invite the most friends obtaining achievements and points. Gamification can also be used to encourage users to generate more contents (product reviews, comments, questions and answers, etc.) These original contents will help you to achieve better organic positioning, by offering searchers more and higher quality contents, and thus will help you to be more visible in this funnel stage.
- Shop: One of the main problems of some eCommerce stores is that the number of viewed pages per session is very low, which means that users don’t find products that interest them, which in turn leads to low conversion rates. Bonobos managed to solve this problem by creating a scavenger hunt in their website, so that users found promotions, discounts, and gifts by browsing through the website. The result was very positive, as they considerably increased the number of viewed pages per session, the average conversion rate, and thus sales.
- Buy: One of the main stoppers in the purchase stage is the many doubts that can arise for a user when they are considering whether to buy an item. In some types of product, e.g. electronics, users tend to welcome the support provided by other users’ reviews and comments, which settle doubts such as whether an item is compatible with other items which users already have at home, or whether there are products with a better quality/price ratio. In order to decrease purchase uncertainty, many eCommerce stores have opted to allow users to write reviews or update other types of contents. However, it’s hard to encourage users to share this kind of contents, and companies like TeleFlora and eBay have successfully applied gamification to improve the quantity and quality of the contents shared by users.
Ultimately, gamification can help you in the various stages of the conversion funnel, so this kind of technique should be taken into account when defining your CRO and customer loyalty strategies. However, the reason why some companies are failing in the implementation of gamification-based projects is the non-definition of KPIs to monitor the results of your strategy, and thus take corrective measures.
10 eCommerce KPIs to Monitor your eCommerce Gamification Strategy
As in any other aspect of analytics and business, not every KPI works for every situation, and KPIs should always be established on the basis of your business objectives. When you apply a gamification strategy, you should know what the problems or KPIs to improve are.
However, there are a number of KPIs which in most cases will enable you to monitor all or at least most of your gamification strategy. In this post we focus on eCommerce KPIs to control the gamification strategy in your online store, as those business KPIs must the the core indicators to monitor. In following posts we will focus on pure gamification KPIs that would provide us with an additional vision more focused on our players (users).
1.- Conversion ratio
In most gamification strategies that you can apply to your online store, conversion is one of the main aspects to monitor. Increasing conversion rates will be the ultimate goal of many strategies (e.g. increasing the number of user reviews and contents), and thus will be one of the KPIs to monitor.
Also, other strategies that don’t focus directly on increasing conversion can have a negative impact on it. Suppose that you use gamification to set up a member-get-a-member invitation system. This may lead you to give incentives to users so that they will invite their friends, but these friends may arrive at your website and even register yet fail to make a purchase. In this case, you will be decreasing your conversion rate – bearing higher traffic yet not making a real profit. So you should also control conversion rates to make sure that your strategies don’t have a negative impact on this KPI that is so important for an online store.
2.- From anonymous to logged-in user
One of the main goals of online stores is creating a user database that is as wide-ranging as possible, with the information required to segment users. With a good database, CRM teams can launch specific actions for the various segments, thus increasing sales. Bearing in mind that email continues to be one of the main channels for eCommerce stores, this goal should not be overlooked.
Gamification can help you to increase the ratio of users who go from browsing anonymously in your store to becoming registered users, either by offering them some kind of reward or as part of a gamified process whose goal is not only for users to log in, but also to provide other information that is relevant for your purposes.
Many of the examples that can be found in this respect use simple but effective mechanics, such as progress bars, which show users what is expected of them and what they can obtain if they complete all the registration steps. Even though it does not fall within the scope of eCommerce, one of the most remarkable examples of this mechanics is LinkedIn:
3.- Number of user reviews
As we have just seen, user reviews are an extremely interesting goal for gamification techniques in online stores. Reviews can help you to increase users’ confidence in their purchases. Gamification has also been proven effective in promoting the generation of this kind of user generated content.
When gamification techniques are applied with this goal in mind, you should monitor both the number of reviews generated globally and the ratio of reviews generated by each user. If you have the capacity to do so, it is also interesting to segment users on the basis of their contribution level, to apply various mechanics and rewards, depending on their activity level, thus achieving a higher level of global engagement.
4.- Average number of contents uploaded by users
Sometimes you won’t want to promote review generation as much as users’ sharing multimedia elements, such as unboxing videos, videos of product tests, images, and even podcasts talking about the various products. In these cases, it is obvious that your KPI should focus on monitoring the global number of shared contents, and, as in the previous case, it is also a good idea to monitor the ratio of users sharing contents over the total number of users, and the ratios of shares by activity segment.
5.- Number of questions and answers generated
Some eCommerce stores, such as Amazon, offer their users specific forums where they can make questions and give answers. In this way, they allow users to make queries and be answered by other users, helping to increase conversion rates and providing a better user experience.
In order to promote user engagement, you can use simple gamification techniques, such as the scores given to user questions and answers, or even management of users’ status, so that their level rises as they contribute to these Q&A forums. One good example of a Q&A forum which has made use of game mechanics to improve its results is Quora.
Quora is a great example of a Q&A website which has introduced a number of simple yet effective mechanics so that users answer the questions made by other users, and, above all, promote high quality answers that add value.
In these cases, you should monitor the levels of user participation. The number of questions, the total number of answers, the average number of answers per question, and the number of unanswered questions. Ultimately, you should use all the KPI associated with the generation of questions and answers required to make sure that your Q&A forum is useful for users and beneficial for your business. If badly handled, a Q&A forum can turn against you, as if users make questions that nobody answers, users tend to mistrust the website managing the forums because their questions go unanswered, and will finally leave your website.
6.- Social shares
Another main goal of many gamification strategies in eCommerce is the increase in social shares, whether they are shared product information sheets, user reviews, comments about products, videos, etc.
If this is your goal, you should monitor the number of social shares, the ratio of social shares per user, ratio of social shares per product. As in previous cases, analyzing this data by user segments is very useful, so that users who have not yet shared and your most active users can be motivated to do so.
7.- Lifetime Value and number of active users
Gamification is a powerful tool to generate user engagement. If you define good game mechanics for your business goals, in most cases you can expect an increase in the number of active users, and, above all the level of repeated user visits.
If this is the case and the mechanics are aligned with the main business goals (let’s not forget that the ultimate goal of any online store is to sell), increasing the lifetime value of users will help. As in previous cases, you should monitor this KPI closely, both to find whether you are improving it and to detect when a strategy is helping to achieve a secondary goal which is however having a negative impact on this metric, which is crucial for any business with a certain degree of recurrence.
8.- Number of new users invited from other users
We have also discussed the possibility of using gamification as a tool to design member-get-a-member programs, which are more interactive and above all effective. In this kind of strategy, you should monitor the number of new users arriving at your store through invitations from current members, but also the ratio of invitations accepted over invitations sent, and above all the level of activity and conversion among these new users.
One of the main problems of member-get-a-member strategies is that, if you are not careful, you will be encouraging users to invite friends who are not potential buyers of your products or services. This will mean that you are attracting traffic and registrations that will never buy in your store, and you will potentially “investing” your effort and/or money in a strategy that is not aligned with the ultimately goal of increasing your sales.
In this kind of strategies, another KPI, which is useful to monitor, is the cost of user adquisition. For example, ShowRoomPrive offers 15 pounds to users who invite their friends when their friends make a new purchase. This places a 15-pound cap on the cost of user capture by the MGM program. However, not all users redeem their coupons, so in order to get a clearer idea of the cost of this strategy, you should calculate the volume of new users within a certain period, the total cost of the redeemed coupons, and on the basis of this data calculate accurately the cost of the user capture achieved by means of MGM.
Showroomprive users the member-get-a-member strategy as a significant source of new user attraction. In addition, its design focuses on giving a reward when a new user makes a purchase, thus clearly establishing the cost of capturing those new users.
9.- Cart abandonment ratio
Another great problem for online stores is the large number of abandoned carts, which is on average about 70% of the total orders that are started in an online store. If you are ingenious and feel like trying new things, such as designing a mechanics based on urgency, or even mechanics based on an urgency and social sharing mix. For example, you could tell users: buy this product right now and if you get 10 of your friends to buy it within 24 hours, you’ll get your money back.
If you apply this kind of mechanics, you should monitor the ratio of abandoned carts as the main KPI, trying to get it to decrease over time and complementing this strategy with other types of techniques, such as recovery of abandoned shopping carts by means of cart recovery emails, etc.
10.- Global sales
You shouldn’t forget that the ultimate goal for any business is selling. When you manage an online store, sales evolution should be a KPI that is always monitored. Introducing any kind of new strategy, either gamification or any other technique, may be counterproductive if it is not well designed, or may improve your secondary goals but damage more global objectives, such as conversion and sales. In order to be sure, you should always monitor sales evolution, and, when there is any significant variation in this evolution after introducing a new type of strategy, you should analyze the correlation and take corrective actions if appropriate.