Rewards and Monetization

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.

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).

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.