How ‘Gamification’ can be used as a successful product strategy — Analysis of the success of CRED
Every now and then we come across a very successful product, that comes out of nowhere to capture our imagination.
CRED has been one such product that has entered the market with a bang. It has even been rated as a potential future unicorn as per this link. CRED is an Indian startup that simplifies ‘Credit Card Payment’ and it is its core use-case. But what has intrigued me is their successful usage of Gamification as a strategy in increasing adoption and engagement across their app.
So through this article I want to analyse this and the possible learnings that can be incorporated as a generic strategy when designing new products.
Before we continue, I want to emphasise that ‘Gamification’ is an enabling functionality only. Without having a core use case for your product, that solves user pain points, any amount of Gamification won’t help.
So here is what I believe the Product Managers at Cred might have done.
First — Solve a real user need and provide amazing convenience through the app. Credit card payment was always difficult in India — especially if you didn’t have a savings/current bank account with the provider. For example, if you banked with HDFC and used Standard Chartered only for Credit Card, then making card bill payments was a massive pain — requiring you to input card details, bill amount and payment details manually. Cred simplified it by doing all the hard work for you — all you needed to do was select bill amount and pay. It provided allied services like credit score, card statements etc. But those are not the primary use case.
Secondly, as we often realize, having a useful product alone is not enough. Increasing adoption and engagement is often the challenge. Gamification is a useful strategy for this.
So what is Gamification — It is the use of Game Elements like Points, Leaderboard, badges, win, losses for motivating users into using the product or service. It is a familiar trope that has been used for a long time — the provision of Air-miles by airlines is a familiar example.
It is a powerful motivator — A funny example showcasing its effectiveness is here Link. Just to maintain his airline status as a executive platinum level member, a customer planned a random trip to Mexico to get air-miles and ended up in jail without passport and a whole lot more.
Anyway, coming back to CRED, they largely seem to have adopted two strategies for adoption:
- Exclusivity (Create intrigue): Cred is marketed as a members only app. And becoming a member gives you certain exclusive benefits. This exclusivity brings with it a sense of intrigue and premium feeling to the app. Over the years a similar strategy has been adopted by Gmail, Facebook to bring this sense of exclusivity and intrigue through invite only growth in the beginning. A note for caution though is that ‘Exclusivity’ as a strategy might not be ideal for every product- it has to tie into your larger business model. For Cred — they tied the exclusivity based on a users credit score. Anyone with a score of above 750 could enter. It is likely those with good credit scores are likely to be regular credit payers, it makes sense to restrict usage this way. Gmail and Facebook too had a nice business motive for exclusivity — can you figure it out by yourself as to what that could have been?
- Gems (Referral reward): Referral is also a common strategy used for increasing adoption across many products.
What Cred did here slightly differently was using game mechanics. Every referral got you ‘Gems’. You could see your gems grow and you can sell these gems for cool rewards. (Note: I was introduced to Cred due to the pestering of a friend who forced me to join as he could get gems. So guess the motivation here is real :))
With adoption out of the way the key problem is on engagement. Many apps have failed after the initiate adoption as they fail to engage their users and eventually go down the ‘Uninstall’ burial ground.
Here is where Cred has used ‘Game mechanics’ heavility and intelligently.
Coins: Every time someone uses the app to make payment — they earn cred coins. They could have made 1 Rupee = 1 Cred Coin. But to give a sense of higher earning, coins are awarded disproportionately higher than the amount you pay for.
And these coins can then be redeemed in two ways
- Fixed rewards: You could exchange coins for fixed rewards — discounts from partners, pay for experian credit scores etc.
2. Variable Rewards through Games: Or you could play a game and win rewards. You can keep spending coins and buy slots and play games.
Given the sensitive nature of the financial information — a comparative leaderboard could not be utilized here. But that is also a game mechanics one can use in a points based design. You could display a leaderboard with those ranked higher motivating users to keep using the app.
There are synergies between the ‘Hook Framework’ I described earlier and this. If you would like, you can picture ‘Gamification’ as a part of ‘Variable Rewards’ section of the ‘Hook Framework’.
Apart from these I have been very impressed at the design, business model of the CRED app and I think I would certainly enjoy discussing with those behind the product.
