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Dwight Schrute, played by actor Rainn Wilson, holds a "Schrute Buck," a a reward system he devised for employees who please him during a brief but tyrannical reign as branch manager

What's the secret to selling books like The Secret ? For eBook retailer Kobo Inc., it meant making a game out of reading.

That was part of the thinking behind the Toronto-based company's Reading Life program, a social media service that allows users to track and compare their reading history with friends, unlock achievements and earn special offers.

"We already use badges internally, and they've become a lot of fun for the employees to collect," explained Jennifer Ricci, vice president of employee experience at Kobo. Some at the company wondered if similar concepts could be applied to customers, and thus, Reading Life was born.

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It's an example of how game mechanics are being used to encourage sales, build communities and increase user engagement, often in the areas you would least expect.

What works

In Kobo's case, Reading Life builds upon many of the same activities and tendencies that book club members have long participated. For example, sharing quotes and passages, or achieving milestones of books read.

But not all ideas are quite as easily conceived.

"Gamification is a lot like the jam on top of toast," explained Keith Smith, CEO of BigDoor, a gamification platform and service provider in the U.S. "It can be a wonderful complement to what already tastes good."

Mr. Smith recommends all his clients begin by carefully defining a set of business objectives - in other words, the 'toast' of gamification. This is where goals, such as the desire for more users or more sales, are outlined, and matched with game mechanics that might produce the best results.

The next step is to determine what user behavior - anything from comments made to images uploaded - can be tracked and aligned with those objectives. This data can be used to award points, or populate leaderboards, and forms the basis of the social and competitive elements of a game or product. Also, incentives or rewards can be associated with certain mechanics, achievements or actions, depending on the client's goals.

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Finally, it's important that all of these elements be designed and revealed to the user in a way that's easy to recognize, interact with and understand. After all, the point isn't to create a game. Rather, it's to introduce game mechanics to enhance and augment an existing product or service, and encourage continued user engagement.

Or, as Kris Duggan, CEO of Badgeville explains, "it's not just about who the mayor is on Foursquare, but the people who are most engaged with your brand."

What doesn't work

There was a time when Rajat Paharia believed currency was king. But as the CEO of Bunchball would soon discover - one of the oldest players in the gamification industry - money can only get you so far.

"We believed we could add virtual goods to our sites, and we would be raking in the cash," said Mr. Paharia, an opinion he would have honestly held until two years ago.

"Now, I've come to the conclusion that only works with a couple of different scenarios."

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Mr. Paharia offers one example, a social media initiative he developed for NBC's popular sitcom The Office, and Bunchball's first client. In the show, character Dwight Schrute introduces a fake office currency called a "Schrute Buck," which Bunchball used as the basis for their virtual currency in NBC's online community.

Users would be awarded Schrute Bucks for making posts, commenting on pictures or completing weekly tasks, all of which helped to raise the profile of the show.

"NBC loved it because they were paying all their users fake money to do real work."

However, for such a strategy to work elsewhere, having a sizeable community of users is crucial - and not just for currency, but for gamification in general. Game mechanics generally function better when there is some sort of scale, which can make aggressive gamification strategies for smaller-sized businesses difficult, if not impossible.

After all, "a community is often what makes this work," echoes Mr. Paharia. "If you have a badge but can't show it to anyone, who cares?"

Other Stories can be found on the Web Strategy section of the Report on Small Business website.

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