What Video Games Can Teach Business Leaders

When you think about video games you’re likely to categorize them under the banner of leisure as opposed to business, but these digital products—and users’ experiences with them—can teach us a lot about consumer behaviour.

In this interview, assistant marketing professor Yulia Nevskaya examines how socially-connected digital products, like video games, can be powerful tools for consumer engagement. Her analysis reveals their profound influence on social connection, and how social multipliers—the peer effects between consumers—can impact customer retention. Nevskaya also highlights how intangible rewards can tap into consumer emotions shape their behaviour.

In business, Nevskaya's insights can be strategically applied by marketers when crafting strategies, compelling campaigns and products.

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Yulia Nevskaya

00:07: Why should we by paying attention to video games?

Video games are fascinating. In terms of revenue, this is the No. 1 entertainment product in the world right now. Traditionally, important entertainment products, such as movies or major league sports, are far behind. 

And as a product, video games are pioneers in many respects. They were the first socially-connected digital product. They were, essentially, the first social media, if you think about it. And they were the first to use very sophisticated consumer engagement tools for content engagement. 

00:40 What are socially-connected digital products?

Socially-connected digital products are platforms where people can enjoy the main product of that platform and interact with each other. What makes socially-connected products unique is that consumers are co-creators of the value of those products. The social component actually makes those products very sensitive to whims and changes in consumer preferences, because what matters is not only what I do, but what my friends do, and I can influence my friends. 

So, if my avatar is never to return to play this game, will it cause my friend in the game to also stop playing the game? That's important. And the companies need to know how strong those peer effects are. We call those effects “social multipliers”. 

Companies do need to follow certain special strategies when they work with socially-connected digital products. When a consumer is a co-creator of the value, what becomes important is not only what this particular consumer does, but what kind of an effect the actions of these consumers have on the peer users of the product. 

01:57: How can social multipliers boost customer retention?

Strong social multiplier effects do have a bright side. You can essentially rely on them in retention campaigns. If you are able to identify an influential user and retain that user, essentially you don't have to be spending that much on retaining the rest of your customers. 

What is truly special about socially-connected digital products is the tremendous power that companies have in controlling in-product social interactions. It's the company who creates the environment in which people socialize within the products. So, essentially, what it means for marketers is that you need to start thinking about customer retention at the time when you design your product. 

02:47: How can marketers apply what they learn to reward programs?

What I should say marketers can borrow from video games for their loyalty programs are three things. First, the path to the reward in a loyalty program should be simple and well understood by the consumer. Second, the journey to that reward should be fun. And third, and probably most important, the loyalty program should engage you on the emotional level. It should give you the sense of success, or belonging, or that you are understood by the company. 

03:23: What can video games teach marketers about motivation?

The biggest insight that comes out of my research on video games is that people respond really well to intangible rewards. Intangible rewards are something that don't have monetary value. You cannot sell it, you cannot touch it. Think about a chest of gold that you get to open in a video game. It's not real. But gamers do see it as a reward. It's essentially a signifier of their success in reaching a certain goal in the game.