Wednesday, December 12, 2012

Gaming Theory: A Prepaid Social Media Game-Changer

For those puzzling over where the next breakthrough social media application in prepaid will come from, Ben Jackson, senior analyst in Mercator's Prepaid Advisory Practice, says look to the gaming industry—not the casino kind; think Zynga.
Ben Jackson
“Why is Farmville such a runaway hit? No one saw it coming. The gaming industry really gets social media,” said Jackson. “Expect to see financial planning and payment products, tools and services that draw upon gaming theory.”
Jackson pointed out that with notable exceptions in the closed-loop sector like social gifting, much of the prepaid industry’s social media focus to date (like many other industries) has revolved around marketing and customer service applications, which, while valuable, fall short of truly capitalizing on the “social” aspect of social media in novel, game-changing ways suited to prepaid.
“Gaming is about competition and fun,” Jackson added. “It’s not such an odd fit with finance, especially given that gaming inspires people to set and work toward specific goals.”
Jackson noted that goal-based saving is particularly popular today, so why not embed gaming elements into prepaid products? People’s natural competitive streak may be harnessed for pleasure in pursuit of both short- and long-term financial objectives, whether competing against others or one’s self. The prepaid provider need only furnish an app or launch a community to get people started.
“What if you could compete against your best friend, a sibling or in-law to load a prepaid Christmas card?” Jackson said. “Maybe there’s a broader community, and the first 100 people to load their card—the amount could be set by the community—receive a bonus item or rebate of some sort.” This is often used in holiday promotions and contests now.
It need not be a material or monetary incentive, he added. “It could be a prestige prize: Premium status or access to a special online saver’s catalogue. You saved 10% more than your sister-in-law on the same sweater because you met your prepaid savings goal faster or you beat last year’s saving goal by so much.”
Jackson also noted that there’s an opportunity to incorporate gaming elements into longer-term objectives. Who among your Facebook friends is most on track to meet this year’s financial goals? How about college tuition, for instance?
“Every parent wants their child to have a college education, preferably without sending the new graduate into the world saddled with a mountain of student loan debt,” said Jackson. “But people have difficulty saving, especially for something so far off in the future.

“Gaming-like applications could be a great motivator here because no one wants to look or feel like a bad parent,” he continued. “If you’re tracking savings progress against other parents or working as a ‘team’ with family, friends or even a school-sponsored group, you might be inspired to pay more attention to that college fund.”
Jackson added that while a college savings account doesn’t qualify as a prepaid service today, it may tomorrow. “I think we’re going to see the line between traditional checking and savings accounts—anything people access with a debit card—and prepaid products blur over time,” he said.
“At the end of the day, it’s all about understanding why people use prepaid products. Figure that out, and then find a social application for it. This is where gaming theory can play a major role,” said Jackson.


Marc Dresner is an IIR USA communication lead with a background in trade journalism and marketing. He is the former executive editor of Research Business Report, a confidential newsletter for the marketing research and consumer insights industry. He may be reached at Follow him @mdrezz.

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