
Rewards and Monetization - aditya
http://www.avc.com/a_vc/2010/02/rewards-and-monetization.html
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patio11
I have one data point for you: for the last two weeks I've been collecting
user surveys. I want people to participate, but was unsure whether altruism or
incentivization would work better. Enter the A/B test: group A got told "Do
this and I'll give you an increase in your print quota", group B got told
"This will help us improve the product for our users." (Everyone who took the
survey got the goodie.)

This has been the most decisive A/B test I've ever run. 2.62% of incentivized
users in A convert, versus a mere .73% of non-incentivized users. That's
waaaaaay pay 99% confidence that incentivization works.

It is pretty trivial incentivization, too: I'm giving them more of something
which is too cheap for me to even describe a way to measure how much it costs
and, even more weirdly, _essentially nobody is helped by the freebie_. (Normal
print quota is 15, incentive is +5, number of users printing between 15 and 20
is below miniscule.

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ryanelkins
I'm interested in finding out more about what kind of incentives drive people
and what kinds of returns businesses can get from them. Does anyone else have
any good examples of this kind of behavior in action?

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logicalmind
From the article: "you've checked in for the tenth time and earned a free
espresso drink."

Foursquare, and the users of foursquare, would love to see this but the
businesses themselves would not. I worked for a targeted coupon agency and the
kind of people who routinely visit and buy your product are exactly the kind
of people you DO NOT want to give coupons to. These people are already loyal
customers. Coupons are more effective if they target either new users (target
starbucks customers to get a free coffee to visit our cafe instead) or
increased consumption (if you buy a large coffee get a discount on buying our
ice cream).

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ryanelkins
Sure, it makes sense that you don't want to incentivize those who need no
incentive, particularly when the incentive is a discount on something they
would have done anyways. It might be more attractive to businesses if they
could increase business beyond what would naturally happen but I think the
rewards could definitely be tailored to that.

Having said that, many businesses have punch card or points type systems that
this could replace or augment. Subway is a good example. These are tied to
actual purchases rather than just check-ins and the possibility of abuse is
very real in that case, so another point to consider.

I think having visible goals and rewards that people can work towards over the
lifetime of their relationship with a business, rather than simply on a
transactional basis (spend $50 get free shipping vs get free shipping for life
when you spend a total of $1000 over any number of transactions with us) can
work towards increasing consumer loyalty which could be very valuable.

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ryanelkins
What about rewards for other types of applications? Do people see an advantage
to FourSquare and StackOverflow's badge system even if there is no "real
world" reward? It seems like there is a good confluence here of "behavior
generated content" and micro rewards systems - one that can have real impacts
on a business' bottom line.

