Liane Nagengast

Purpose Many marketplace examples suggest that using gamification in the online retail shopping context boosts sales and positively affects customer loyalty. Nevertheless, more research is needed to understand the effects of digital games on consumer behavior and their underlying psychological mechanisms. Therefore, this article explores how combining games and monetary rewards impacts customer satisfaction, loyalty and word-of-mouth (WOM) intentions. Design/methodology/approach To test our hypotheses, we designed two online laboratory experiments to stimulate an online shopping situation, as gamification in online retailing has the potential to affect an important set of outcomes for service firms throughout the consumer decision process (Hofacker et al., 2016). Findings The results of two lab experiments demonstrate that playing a shopping-related game without monetary participation incentive positively influences all three relational outcomes because games enhance consumers' enjoyment of the overall shopping experience. However, our findings also show that monetary rewards used to incentivize game participation diminish these effects. Gamification loses its positive effects if games are combined with monetary rewards, as consumers no longer play games to derive inherent enjoyment, but rather the extrinsic motivation of receiving a discount. We draw managerial implications about how gamification effectively and profitably fosters strong customer relationships and thus increases customer lifetime value and equity. Research limitations/implications This research is the first to investigate the combined effects of gamification and price discounts that require consumers to play the game in order to receive the discount. Focusing on an online shopping context, this article contributes to research on motivation by providing new and more nuanced insights into the psychological process underlying the gamification effects on consumer' long-term attitudes (i.e. satisfaction) and relational behaviors (i.e. positive WOM and loyalty) toward a retailer. Practical implications Based on our findings, we provide recommendations for marketers that explain how gamification can be a profitable and efficient tool to foster strong customer relationships. Retail managers should use gamification as a less costly alternative to typical price discounts. Originality/value Two laboratory experiments investigate how the separate and combined use of games and price discounts affects consumers' satisfaction, positive WOM intentions and loyalty. Playing a shopping-related game increases satisfaction with the retailer and positive WOM intentions as well as loyalty. Monetary rewards used to incentivize game participation eliminate the positive effects of gamification.

Existing studies on the role of switching costs (SC) as moderator of the relationship between satisfaction and repurchase behavior are inconclusive. We attempt to explain these inconclusive findings by synthesizing an amplifying and a lock-in effect, and hypothesize a nonlinear moderating effect. In Study 1 (a main study and three replications), we find strong evidence for an inverted u-shaped moderating effect of overall SC. Our results suggest that satisfaction is a particularly important predictor of repurchase behavior in situations characterized by medium-levels of SC. Based on Prospect Theory, Study 2 (a main study and one replication) reveals that this inverted u-shaped moderating effect of SC is stronger for positive (relational and financial) SC than for negative (procedural) SC. We conclude with recommendations for satisfaction management of different customer segments, and describe possibilities to influence customer switching costs in various industries.

Across various disciplines, research has analyzed the effectiveness of self-focused vs. other-focused (prosocial) bonuses in influencing individual behavior. The effectiveness of prosocial bonuses has been linked to the “warm glow” of giving, which suggests that people experience positive feelings from the act of “doing good”. We propose an additional motivation for why prosocial bonuses might influence behaviors, suggesting that peoples’ value perceptions differ depending on whether an equivalent bonus is spent on others or on oneself. Two laboratory experiments show that individuals overvalue other-focused compared to self-focused bonuses. These results have implications for the design of incentive schemes.