Requiring action to get a reward increases the perceived value of the reward.
- SCVNGR gets participants to do challenges at places to unlock rewards. The challenges mainly revolve around broadcasting something positive about the location on social media, or about performing actions that make it more likely that players will return in the future. Each action also gives a certain number of rewards, which can then be redeemed for discounts or free items at the participating locations.
- Shopkick encourages shoppers to browse online, and then earn points when they subsequently buy the items they browsed in a physical store. Shoppers earn a combination of location-based points (walk-in “kicks”), plus purchase-based points and rewards on linked credit cards. By getting participants to state a goal up front, Shopkick encourages future actions by showing progress towards their desired reward.
There is a higher perceived value in getting rewarded for something you did over something that happened to you. The emotional component of investing time or skill to obtain a coupon makes it appear more valuable. You feel like you “deserve” your reward. As a result, people are more likely to value a coupon or discount when claiming that discount requires some skill-based activity than if they had just been given something that anyone could receive.
How to design for skill, not luck
- Make customers perceive that they have worked for their discount, but keep the effort at a suitably low level that it doesn’t become a barrier.
- The “work” that customers do could involve a game of skill or a simple challenge such as being present at a certain time or displaying a specific item.
- Challenges and games should be biased to reward your target group. For instance, frequent customers should be challenged to take a picture of a past purchase whereas new members should be challenged to visit at least two store locations in a week.
- It’s OK to include a random element in the reward, but the randomness should appear to be controllable (i.e. everyone wins, but the size of the reward is random within a set of parameters)
- Make it clear that the reward is only available to people who have completed the action, maintaining its exclusivity.
- Rewards need not be large – no more than the discount that a good customer might get anyway.