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Motivating With Incentives

Motivating with Incentives

Joey Torretto

Lead Analyst, Quantitative Division Head

Elevated Insights

Email: joey@elevatedinsights.com

Phone: 719-590-9999

Website: www.elevatedinsights.com

Respondent Incentives –

An Underappreciated Factor in the Quality Research

Incentives make the world go ‘round – they are the reason we get up every day and make the decisions we do. Without incentives there would be no motivation for people to complete the everyday tasks that keep society functioning.

The market research industry also depends on appropriate incentives for action. If we want honest, thoughtful feedback from respondents, we need to motivate them to provide this..

In our opinion, the correct incentive to offer respondents in the US research market is one that effectively balances two things:                                                                       

  1. Honest Feedback from a Representative Sample
  2. Responses/Participants per Dollar Spent on Incentives

Below I’ll dive into some of the pros, cons and considerations for common incentivization methods. As a quant. guy, I’m naturally thinking of these methods in relation to surveys, but much of this information could be applied to qualitative research as well.

Incentivization Methods

Cash (or cash equivalent) Incentive:

Cash incentives are the most straightforward. Respondents are told “you will receive X amount of money for completing this survey, focus group, etc.” Payment can take the form of checks, cash, or all-purpose gift cards (e.g. VISA gift cards). In online research, virtual forms of cash certainly make the most sense.

Pros:

  • Transparency – it is very clear to respondents what they are getting for their participation. This can build rapport with respondents, especially important if they’re part of a panel or longitudinal study.
  • Highest Response Rate – in our experience, this method gets more people to take the survey than any other method.

Cons:

  • Cost – this is typically the most expensive method.

Considerations:

  • Different groups place higher and lower values on their time. For example, doctors will need a much higher incentive to participate than the general population.
  • If using gift cards, make sure that your client (and their legal department) is okay with the vendor. For example, we’ve had major cosmetics companies not want to use Amazon and financial companies not want to use VISA.
  • The closer you can get to instant payment the better – if you promise a virtual gift card immediately after survey completion, response rates are typically higher (in our experience) than if you say that you will send them their incentive in a few business days.

Sweepstakes Incentive:

The sweepstakes model is just as it sounds: “5 people who complete this survey will be randomly selected and receive a $200 VISA gift card!”.

Pros:

  • Cost-efficient – sweepstakes are typically less expensive than guaranteed incentives as respondents will participate for a “chance to win” even when their expected value (EV) is small.

Cons:

  • Can Produce Skepticism – some may be skeptical about the legitimacy of sweepstakes.
  • Lower Response Rates – the skepticism noted above typically leads to less responses than methods with a guaranteed incentive.
  • Legal Implications – certain states have laws around the structure and dollar value of sweepstakes. You’ll need to invest some time in understanding the legal side.

Considerations:

  • Sweepstakes are a great option when working on a limited budget, however, they could make people question your legitimacy. This is especially true if you are managing a panel – panelists will give up after they don’t win a certain number of times. While not a perfect solution, letting survey-takers know who won at the end (without compromising PII) can provide a level of transparency

Point System:

When using a point system, respondents are awarded points that can eventually be redeemed for gift cards or other prizes. Points can sound like a lot more than the actual dollar amount they represent (e.g. 100 pts = $1). This system is used all the time with credit cards and loyalty programs.

Pros:

  • Cost-efficient
  • Engagement – respondents can be motivated to keep taking surveys so that they accrue enough points to redeem for a prize.

Cons:

  • Point Tracking – In order to use points, respondents have to be part of a panel or database where their point accrual is tracked.

Considerations:

  • Before introducing a point system to your panel or database, think through the frequency that you will be soliciting responses. Respondents need consistent opportunities to work towards a prize. You also don’t want to get too carried away with your point to dollar value ratio – respondents will eventually realize that the surveys are not worth their time.

Discounts/Vouchers:

Sometimes companies offer gift cards, discounts or vouchers to their own products or services.

Pros:

  • No Cash Outlay – providing discounts/vouchers to your own products/services makes a lot of sense from a bottom-line cost perspective.

Cons:

  • Positive Bias – offering a discount/voucher as an incentive will be more motivating to people who like the company, product or service.
  • Lower Response Rates – as mentioned above, people with negative opinions about the company will be less motivated to respond. This inherently reduces response rates.

Not offering an Incentive:

At Elevated Insights we rarely conduct research without some sort of incentive. The type of people that are willing to participate without any incentive are typically not representative of the entire market, and this can completely throw your findings off track and significantly slow down the fielding of research, especially against younger cohorts. No incentive often attracts people who:

  • Are polar in sentiment and opinion – often the people who are motivated to participate either feel strongly for or against the research topic and want to voice that sentiment. This ignores everyone in the middle.
  • Have time on their hands – an over-index of consumers who have time on their hands could bias the results in a number of ways. And this is more of a psychographic trait that isn’t typically included in screening questions or quotas.

The one exception where we have foregone incentives is with employee engagement studies, where employees can be more naturally motivated. Essentially, their financial incentive is substituted with an incentive to improve the place they work. However, a financial incentive is typically still a good idea if the budget allows.

So how should you incentivize your respondents?

The answer is… it depends. The optimal way to incentivize respondents depends on the contextual aspects of the research study, and thus, should be decided on a study-by-study basis. These factors include the amount of time the respondent will need to spend, the audience being researched, the topic of the research study, etc.. And often, multiple methods can be used in combination to produced balanced responses to your survey or screener. A preference for the objective is what landed me on the quant. side of market research, but I do concede that the right way to incentivize respondents is more of a subjective exercise.

Hopefully this article provided things to consider the next time you’re designing a research study. We firmly believe that correctly incentivizing respondents is often an underappreciated factor in the production of high quality research.

If you have questions, comments, or suggestions about incentives I would love to chat! Feel free to shoot me an email – joey@elevatedinsights.com.

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