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by Konstantinos Trantopoulos , M. Dalbert Ma, Vasilis Vassalos, Michael G. Jacobides Published December 18, 2024 in Brain Circuits • 3 min read
Tangible loyalty programs such as air miles and store cards are not the only way to retain customers and forsake the addictive appeal of games. Merely offering extrinsic rewards such as cash eventually reduces intrinsic motivation, whereas gamification – the use of game-like elements such as points, rewards, and challenges in non-game activities – can greatly aid customer retention.
Virtualization is the transposition of real-world activity and elements into a virtual form through avatars, profile spaces, and augmented/virtual reality.
Activities and games that are centered on the user tracking their behaviors and performance have a fairly weak ‘lock-in’ because users do not have much invested in the platform and can easily switch to another one. Including an element of social comparison can boost retention, even though it doesn’t offer any rewards beyond those built into the game itself.
Businesses must persuade users to engage frequently over a long period and commit time, attention, and money along the way. Through gamification, they can turn their game into a firm fixture in users’ daily routines that they will habitually turn to as a behavioral “default” and help boost customer retention.
Advisor and Research Fellow at IMD
Konstantinos Trantopoulos is a Senior Advisor and Fellow at IMD. He works with C-level executives, boards, and private equity investors on the strategic, commercial, and operational levers that drive growth and enterprise value. His work focuses on investments, capital allocation, commercial diligence, market dynamics, and how new technologies and AI reshape value creation. His insights have been featured in Harvard Business Review, MIT Sloan Management Review, California Management Review, MIS Quarterly, Industry and Innovation, Το Βήμα, and Forbes.
Dalbert is a PhD candidate in the Strategy and Entrepreneurship department at London Business School. He has a Masters in Management from IESE Business School, a Master of Laws with a specialization in competition law from Erasmus University Rotterdam, and a Bachelor’s in Philosophy, Politics and Economics from the University of York. Before academia, Dalbert was involved in financial technology research at China’s central bank and in infrastructure project financing at Deloitte Financial Advisory.
Vasilis Vassalos is leading the Information Processing Lab and is the Director of the MSc in Data Science at the Athens University of Economics and Business. He has received numerous awards and has been Principal Investigator for over 15 funded research and advanced development projects since his arrival at AUEB. He is the author of over 70 technical publications and two US patents. He received a Diploma in Electrical and Computer Engineering from the National Technical University of Athens, and his MS and PhD in Computer Science from Stanford University.
Michael G. Jacobides is the Sir Donald Gordon Professor of Entrepreneurship & Innovation and Professor of Strategy at London Business School. He studies industry evolution, value migration, firm boundaries and organization design. He is the Chief Expert Advisor on the Digital Economy at the Hellenic Competition Commission and a co-author of the WEF’s white paper on digital platforms and ecosystems. He served on the Global Agenda Council of the World Economic Forum and has presented at the Davos Annual Meetings.
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