How to measure ROI and set KPIs for a gamification project
But aside from justifying projects to management, there are even better reasons to measure ROI – it can help focus on the areas where gamification can matter.
First, Choose Your Gamification Project KPIs
What is return on investment? It is about making something better. Gamification is all about improving key performance indicators (KPIs).
Choosing the right KPIs is very important. First of all, by clearly stating the KPIs and measuring them before the gamification project, you have your “control group” – or, to be more precise, the state of affairs as it was before gamification.
Additionally, KPIs are important in defining the game rules and, more importantly, in communicating to employees what the corporate goals are. A gamification project is an excellent opportunity to communicate corporate goals to employees and to align them with those goals, similar to the use of Corporate Performance Measurement systems for management. Finally, KPIs will help you assign a monetary value to the project and measure its ROI.
You can also try to set an improvement goal, stated as a percentage – where you’d like to improve a certain KPI by a certain percent, as such 10-20% more.
In this respect it is important to create a distinction between process KPIs and performance KPIs. A process KPI is a behavior you’d like to change. For instance, increase quality reporting into the CRM system, which can, in turn, enable you to make better quality sales forecasts. A performance KPI can be the result of a process KPI (but not necessarily) – more sales.
Similarly, pay attention to the difference between KSFs (Key Success Factors) and KPIs – key success factors will influence the outcome of the project, while KPIs are how you measure it.
Calculate Your Gamification Project ROI
- To calculate the return – take the KPI results from a control group or from the period prior to the gamification launch. Compare them to the results after the project implementation. Assign a monetary value to the improvement. This is your return.
- For non-monetary goals, such as customer satisfaction, set a monetary value. Ask the organization what the value of increased customer satisfaction or better knowledge collaboration is. Record it.
- Take time into account: if you expect the return to last 12 months, make sure you reflect the projected 12 month gain and not the gain at the time of measurement. Take care to make realistic assessments of the time element – don’t take 10 years into account….
- Calculating the investment is even simpler: what are the costs expended by the organization to carry out the project? These may be license costs, integration costs, etc.
- Divide Return by Investment – and this is your ROI.
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