As regular readers know I’m fascinated with behavioral psychology – especially as manifested in software development and user experience design (related posts here, here and here). The most successful web + mobile applications (from biggies like Facebook + Twitter to up-and-comers like Foursquare) are masters at exploiting behavioral triggers and game mechanics to drive customer adoption and use.
Incentives – whether real (cash + gift certificates) or virtual (badges + points) – are often a key ingredient in social gaming systems. Applied correctly, they can be a powerful accelerant to a well-designed game structure. But whenever we get into the topic with one of our Founder’s Co-op portfolio companies (which is often), I feel compelled to share our experience at Judy’s Book, to remind them that poorly-designed game incentives are often worse than none at all…
Andy and I started Judy’s Book together back in 2004. We were convinced that local search was going to be a big deal, and “Social Search” (a term we actually trademarked) was the way consumers were going to prefer to filter their results. At launch, all we had was a set of business listings and some basic user mechanics that allowed anyone to share their opinions about their favorite (or least favorite) local vendors. We had raised some venture money and were impatient to show growth in our user and review counts. So we came up with an audacious promotion: write 50 decent reviews of local businesses and we’d give you an iPod Shuffle ($99 retail at the time). The New York Times got wind of it, giving us our first national press hit, and our user signups and review counts went through the roof!
At first we were ecstatic. But when we started reviewing these new accounts and their reviews we quickly found that a significant percentage of them were clearly junk: thinly disguised copy-paste jobs, improbably broad geographic spreads for single reviewers, etc. When we dug deeper to see where these new users were coming from, we noticed a high volume of referrals from a few bargain-hunter forums: FatWallet and SlickDeals in particular.
By accident, we had turned over a rock we didn’t even know existed: bargain-hunter forums are the clearinghouse for tens of thousands of people (mostly women, and mostly in rural and suburban locations) who watch vigilantly for freebies of any kind and pounce en masse when a juicy new offer hits the wires. They value their time at close to zero (so they’ll do a significant amount of work to claim a free offer), and are driven primarily by the market value of the incentive offered (many of them resell their prizes immediately on eBay).
Knowing that this population is still out there and eager as ever to game your promotion, here are a few rules of thumb I’d suggest if you want incentives to be a part of your social game (they seem obvious in retrospect, but that’s how experience works):
- Reward engaged users, not new signups – find your most passionate and engaged users – the ones who love your value prop for what it is – and send *them* thank you gifts, not the folks who just showed up for the goodies.
- Practice intermittent reinforcement – avoid clearly-defined “do this, get that” programs in favor of unpredictable and variable ones (Foursquare’s funny and many-faceted badging system – even the controversial “Douchebag” badge – is a great example of this).
- Make rewards as unique and personalized as possible – offering a mass-market product like an iPod Shuffle is an invitation to abuse; offering a one-time coupon at a local business that you know the customer visits often is worthless to most people, but very much appreciated by the customer you’re trying to reward.
- Don’t promote your rewards program – let your delighted users do it for you. It will be more authentic coming from them, they’ll tell the right people, and word is less likely to spread to folks who will come for the wrong reasons.
So don’t be stupid like we were – if you want to sprinkle incentives on your social game mechanics, make sure you spend your money on the customers who care about you.