Gamification and Growth Hacking

Yesterday, I was contacted about designing a large online service that involves gamification of learning, and that really got my creative juices flowing.

It also inspired me to write about a launch I managed in 2006 for a product that essentially did the same thing as scripts that other people gave away as free bonuses.

The day before the launch, nobody had heard of me. I had no list to market to at all, and only a handful of connections in the Internet Marketing world, which I had cultivated at conferences the preceding year.

Due to a number of gamification techniques that I used in the launch, under a week later I:

  1. Had sold 1,500 copies of software for $150 to $250.
  2. Completed a $295K launch out of nowhere.
  3. Had a responsive list with over 10,000 names on it.
  4. Was being booked to speak at marketing conferences.

I also did an additional $555K in residual sales that year with no further marketing. Other gamification techniques got me over 100 testimonials, and got the product voted the top Internet product of the year, beating out products produced by well-known marketers.

The gamification was so revolutionary at the time, that the sales letter and techniques were still being discussed and studied by Internet marketers a decade later.

Growth hacking involves combining creative marketing with technology to increase sales and adoption, and to create evangelists for your product. In my last post, I wrote about how I once invented a new type of software to remove a significant barrier to entry, which also falls under growth hacking. To gamify this launch I also invented new marketing techniques and new software to automate them.

For example, all of my sales came from affiliates so I designed and wrote my own affiliate program so I could get them competing against themselves and each other.

Every time a sale happened, affiliates got an email like:

Congratulations Nana! You have now sold 28 copies. If you sell just 22 more, your commission on all of them goes up from 30% to 40%.

Congratulations John! You are now in 2nd place. If you sell 30 more, you will pass Frank Kern as top affiliate and win the grand prize.

Hey Frank. Quick note that John Reese is only 30 sales away from taking your spot as top affiliate. Thought you would want to know.

Hey Frank. Quick note that John Reese just passed you and you slipped to 2nd place. There’s 329 copies left, so there’s still a little time to beat him if you promote now.

These automated emails used six of Yu-kai Chou’s eight main gamification tactics for motivating peoples to take action:

Sense of Accomplishment: The emails included the concepts of Progress notifications, High fives, Quest lists, Progress bars, Status points, Fixed action rewards, Overcoming challenges, and Badges. There was the constant challenge to reach the next goal or to beat challengers.

Ownership & Possession: Once they reached the top 10, it was hurtful to their pride to drop out. They wanted to protect and maintain their position that they worked hard to get.

Social Influence & Relatedness: The emails inspired competition and envy to drive affiliates to beat each other. Naming the affiliates who were beating them created social proof, and when an unknown affiliate passed a guru, that was totally unacceptable to the guru.

Scarcity & Impatience: There were a limited number of spots to sell period. They couldn’t wait until tomorrow to promote again and beat their friends. The scarcity got them to drop what they were doing and promote now.

Unpredictability & Curiosity: Nobody had ever seen anything like these emails before, and there was enough unexpected variety in the types of emails they received, that people read each one. They needed to know who was catching up to them or passing them, especially more so when they didn’t recognize the name.

Loss & Avoidance: There was always the risk of losing progress, losing the top prize, falling out of the top 10, and losing face. These people were the best, and wanted to maintain their reputation.

This was all new and the effect was exactly what I hoped. The biggest affiliates in the world couldn’t stand to be in anything other than first place, so they kept emailing out, writing frequent emails to try and outdo each other.

I also used some of these techniques on the sales letter to make the most out of all the traffic they were sending me. (While these tactics are common now, at the time, most of this had never been done before.)

With each sale, a countdown moved closer to zero, with the advanced version of the product to be sold out for good after 1,500 people bought.

Every 500 sales, the price went up by $50, with a countdown until the next price increase.

With each sale, another bonus got closer to being sold out, with a list of bonuses they already had missed out on. The bonus was a DVD with recordings from a marketing conference. The first 300 people bought more to get the DVD than the product, and the scarcity felt very real because it was a limited pressing of a physical product.

At any given time, there was a message at the top of the page with never more than 200 spots left before something bad happened. After each sale, that number went down. If you didn’t buy right then and there, you knew you would lose out in one way or another.

The result was that for the top affiliates, about 50% of the people they sent opted into my squeeze page to see the full sales letter, and 50% of those bought the product. That means several affiliates had a 25% conversion rate at a time when there were hundreds of product launches a year and a 2% conversion rate was considered really good.

The combination of the repeated promotions, scarcity, and the newness of it all made this the must have product of the year and many people bought it without taking the time to read the sales letter to find out what it was. (But, then they used it and loved it, and many of them still use it today.)

There were also very few refunds, as I made sure everyone knew that the second they gave up their copy, it would be offered to the people on the waiting list, and they couldn’t get it back.

These particular gamification techniques may still work today in some markets where the audiences haven’t been overexposed to them. However, they were copied so much in the Internet marketing space that they became distrusted and don’t work nearly as well any more.

But, gamification can be used in many different ways beyond sales. Growth hacking is much more than sales as well. Both can dramatically increase adoption and continued use of products in very positive ways.

I don’t always have the budget or time to explore adding them into the minimal viable products that are first released, but it’s something that is ever on my mind. Looking for gamification and growth hacking opportunities should be part of UX design whenever possible.

Overcoming barriers to entry

UX design is not just making a pretty interface. A big part of it is identifying the “ah-ha” moment that makes people love your service, and identifying ways to increase adoption or to reduce barriers to adoption so that more people get to that moment.

For example, part of my branded tracking link service, runs on our client’s web servers, so links are branded to their actual websites instead of unrelated domains.

When I demoed the very first beta version to potential clients in 2005, they wanted to sign up on the spot. Then I explained how to install it: You download the code, unzip it, get an FTP program, upload the files, go in and set permissions, edit the config file, and (at the time), create a database, add the credentials to the config file, and run the code to setup the tables.

Upon hearing that, their initial enthusiasm quickly turned to disinterest.

Yay! I had identified a huge barrier to entry! Getting started was too time-consuming and technically intimidating.

So, I invented an automated installer to remove that barrier, and successfully sold $295K of product in the first week of sales in 2006 – largely due to how easy it was to set up.

The installer design was heavily inspired by InstallShield, used to install Windows software. It was a dialog wizard that took people through the process. This is a screenshot of part of the current version:

The current wizard format for the installer.

In the following 13 years, I’ve had plenty of opportunities to identify other barriers of entry caused by this installer wizard concept, mainly:

  1. Many of the screens have too much text, so it looks intimidating, and people can’t easily prioritize what to read.
  2. Some people don’t understand all the terminology, and end up making the wrong choices, which our staff then needs to manually undo.
  3. When things failed, people had to exit the installer and make a support ticket, entering their FTP details to a ticketing system.

I’m currently doing a complete redesign of the entire service. In designing a new version of the installer, I identified the following business goals:

  1. To eliminate the opportunities for user error on installs.
  2. To decrease the number of abandoned installs.
  3. To increase the number of people who contact us when an install fails.
  4. To eliminate delays from, “My install failed. Help me!” support tickets, which we can’t do anything about without extra information.

To achieve this, my user experience goals are that:

  1. It’s clear to users what to do, no matter what their situation.
  2. The user doesn’t need to scan or read a whole dialog to do things.
  3. It is a friendly and familiar experience instead of intimidating.
  4. The information we need to help a client is sent to us when things fail.

I decided that a better approach would be to use a chatbot to guide clients through a more elaborate set of choices. Instead of a step-by-step wizard, it is a friendly little expert system, which can freely jump around to deal with different cases.

Another part of UX design and project management is maintaining documentation so all stakeholders and developers have clear guides on what is going on. Just to get an idea of the scope of the solution, here is a screenshot of the flowchart that documents the flow in new setup design.

Blue = User Choices. Yellow = User Input / Info. Grey = Compute. Red = Error Options.

To see the difference between the wizard style and the chat style, consider the first screen clients are presented with when they want to add a domain.

In the wizard style, there is a lot of reading to do to decide which choice to make. It also doesn’t explicitly cover every option, unless the client has enough knowledge to work out what to do in certain situations.

Which option do you choose if you have a site-builder website hosted on a service like Wix?

By contrast, here’s an early mockup of the same screen in the new chatbot design. It’s friendly, has a natural flow, and 1/3rd the text. Instead of having to work out which choice a client needs to choose, it clearly provides the main options, and can lead people with special circumstances to the right choice with follow-up questions.

The new chatbot design. Now, things are pretty clear.

The current installer was made before chatbots were everywhere and succeeds in removing a very significant barrier to entry. Most people can install and use without technical knowledge.

The new design follows a well-known and easy to understand format and will remove additional barriers to entry. It will no longer be intimidating or confusing, it will be easier for the client to follow, and when the installer fails, it will offer to create a support ticket with a single click.

This last part is also important. Instead of emailing FTP details into a support ticket, clients will have the option to automatically create a ticket, which will link to an encrypted copy of their FTP details in a database. We’ll decrypt that while manually setting up their domain and delete the record when complete, without losing the support ticket. (Part of UX is also figuring out how the back-end works and how it ties into the front-end.)

The end result should be a higher percentage of people getting to the “ah-ha” moment of seeing their tracking links increasing brand recognition of their website, while also getting higher click-through rates because of using informative and descriptive links on their trustworthy looking domains.

And that’s what good user experience design is all about.