Acorns Case Study: The Impact of Gamification on Retention and Engagement

Acorns, the micro-investing app, effectively uses gamification to boost user engagement, increase retention, and provide added value. This case study examines specific gamification techniques implemented by Acorns and their impact.

The Acorns Platform

Acorns simplifies investing for beginners by automatically investing spare change from everyday purchases. Users link their bank accounts and credit cards, and Acorns rounds up each transaction to the nearest dollar, investing the difference in a diversified portfolio of exchange-traded funds (ETFs). The platform also offers other features like recurring investments, retirement accounts (Acorns Later), and checking accounts (Acorns Spend).

Gamification Strategies in Acorns

Acorns integrates several gamification elements to make investing more engaging and rewarding. These elements encourage users to interact with the app more frequently and remain invested for the long term.

Progress Tracking

Visual progress bars are prominently displayed, showing users how close they are to reaching specific investment goals. For example, an Acorns Later account might display a Progress Bar showing how much has been saved towards retirement. Seeing tangible progress towards goals can be highly motivating and encourages continued investment.

Round-Ups and Visualizations

The core round-up feature itself is inherently gamified. The act of accumulating spare change, even in small increments, feels like a continuous game. Acorns provides clear visualizations of round-up totals, showing users how their small contributions add up over time. This constant feedback reinforces the positive behavior of saving and investing.

Found Money Rewards

Acorns partners with retailers to offer "Found Money" rewards. When users shop at participating stores, Acorns automatically invests a percentage of the purchase into their account. This acts as a Reward for shopping through the Acorns platform. This not only encourages users to use Acorns for their purchases, but also provides an unexpected boost to their investment, creating a positive association with the app.

Recurring Investments and Streaks

Setting up recurring investments is subtly encouraged through reminders and visual cues. While Acorns doesn't explicitly implement Streaks in the traditional sense (e.g., a visual counter showing consecutive weeks of investing), the platform promotes the habit of regular investing, implicitly creating a streak-like effect. Users are nudged to maintain their investment schedule, reinforcing positive financial habits. Consistent investment is further incentivized with long-term growth results.

Educational Content and Learning

Acorns provides bite-sized educational articles and videos on investing and personal finance. This content is presented in a simple and accessible format, making it easy for beginners to understand. While not directly gamified with points or levels, access to knowledge is itself a Reward, empowering users to make informed financial decisions. The platform promotes continuous learning by showing users content relevant to their level of investing knowledge.

Impact on Engagement and Retention

Acorns' gamification strategies contribute to increased user engagement and retention in several ways:

• Increased App Usage: The round-up feature encourages users to check the app more frequently to view their accumulated savings and investment performance.
• Higher Investment Amounts: Visual progress and Found Money rewards incentivize users to increase their investment amounts over time.
• Improved Long-Term Retention: The combination of regular investing, educational content, and positive feedback loops fosters a long-term commitment to investing.
• Positive User Experience: Gamification makes investing feel less intimidating and more enjoyable, leading to a more positive user experience overall.

Benefits for Users

The gamified features in Acorns not only benefit the company but also provide significant value to its users:

• Democratization of Investing: Acorns makes investing accessible to everyone, regardless of their financial knowledge or investment experience.
• Habit Formation: The platform encourages users to develop positive financial habits, such as saving and investing regularly.
• Financial Education: Acorns provides users with the knowledge and tools they need to make informed financial decisions.
• Long-Term Financial Security: By simplifying investing and encouraging consistent saving, Acorns helps users build long-term financial security.

Potential Improvements

While Acorns effectively uses gamification, there are opportunities for improvement:

• Challenges: Implement specific Challenges, such as "Invest $50 this month" or "Refer a friend," with clear rewards for completion.
• Achievements and Badges: Introduce Achievements and Badges for reaching specific milestones, such as investing a certain amount of money or consistently investing for a year.
• Levels: Create a tiered system of Levels based on investment amount or engagement, offering increased benefits or access to exclusive features at higher levels.
• Leaderboards (with caution): While potentially motivating, Leaderboards should be implemented carefully to avoid discouraging users with smaller investment amounts. Perhaps focusing on investment consistency rather than total value.
• Points: Introduce a Points system for completing various actions within the app, such as reading articles, referring friends, or setting up recurring investments, which can then be redeemed for rewards.

Conclusion

Acorns demonstrates how gamification can be effectively used to improve user engagement, increase retention, and add value to users. By simplifying investing, providing visual progress updates, and offering rewards, Acorns makes investing more accessible and enjoyable for everyone. While there is always room for improvement, Acorns serves as a strong example of how gamification can be used to promote positive financial habits and help users build long-term financial security. Startups in the fintech space, and beyond, can learn from Acorns' successful implementation of gamification to enhance their user experience and achieve their business goals.