Customer contribution and money incentives 20:56 on Tuesday

Collaborating with customers has been on my mind lately, much because of discussions around the social media book I’m working on, the CREF model proposed by the book’s co-author Sami Salmenkivi and the FLIRT model for crowd sourcing introduced by Sami Viitamäki.

Everybody seems to be asking for how long will people contribute without money incentives? My take is that money will never play a major role in incentivizing people to collaborate. This is purely an intuitive guess. Other people, like aforementioned Sami Viitamäki who is currently doing research on the subject, will probably have more grounded arguments on this.

Here are two kinds of money incentives:

  • “The $1 million challenge” — The real incentive here is not direct monetary reward, but the opportunity of winning a significant reward. What kind of people take part in such lottery? Are these the people whose contribution you really want? How much effort are people willing to put into the slim chances of winning?
  • Paid content production — Paying people by contribution. It will get very expensive to pay any significant reward to content producers. If the reward is not significant, money is not the real incentive to contribute. One way to make the rewards bigger is to reward only the best. But how do you rank the content and decide who should be paid more? Squidoo and Mechanical Turk come to mind, both of which have not been that great successes.

8 Responses to “Customer contribution and money incentives”

    Links from my other posts:

  1. /personal » Blog Archive » How not to involve customers
  2. /personal » Blog Archive » Crowd-sourced evangelism

  4. Tommi Vilkamo Says:

    On similar topic, Jason Calcanis wrote about the decision to take down the top-digger list from Digg.com:

    The driving forces in these system are (in order):

    1. recognition
    2. affiliation
    3. compensation

    I believe that too.

    The people who contribute for getting (a small amount of) money, are probably not the kind of people you want to contribute. I believe that you get better results from cooperating with customers with other motivations/incentives.

  5. Niko Says:

    Digg also shows that contributors incentivized by recognition or affiliation might not be the best collaborators either. I don’t know if there’s any form of incentive that couldn’t and wouldn’t be gamed for the benefit of the contributor and deprivation of the company looking for contribution.

    • Then again, what kind of a contribution is such that does not benefit the cause contributed in?
    • Do contributors even know or realize when they’re no more contributing but depriving the system?
    • If they did, wouldn’t their efforts be called spamming or hijacking the system instead of contributing?
  6. Tommi Vilkamo Says:

    Do contributors even know or realize when they’re no more contributing but depriving the system?

    Most probably not. I have seen a number of great initiatives that have eventually failed – not just because of spamming or hijacking, but also because of explosion of bozos with good intentions. I believe that you have too. I’d already count Digg as the most recent high-profile example.

    Please send me an email when you have figured out how to create the perfect and sustainable system :)

  7. Niko Says:

    The day I come up with that I’ll write a book and spend the rest of my life cruising around Pacific islands with my royalty yacht and getting all wrinkly in the sun. But I promise to send you a free copy of the book! :P

  8. Sami Viitamäki Says:

    According to my studies with the subject, you’re intuition is largely right in that money is hardly a major motivator in customer collaboration. Instead the collaboration efforts are often driven by immaterial benefits, such as:

    • possibility to receive improvements to own ideas (hobbyist in niche sports)
    • building common ‘we’ spirit
    • gaining social capital (through sharing information and making connections)
    • gaining reputation
    • the expectation of returned favors when in need
    • community recognition
    • company recognition (especially in demanding & technical areas) and last but certainly not least:
    • fun and enjoyment of participating and helping the community flourish

    Intrinsic motivation (fun, challenge, mental stimulation, curiosity) plays a major role among most customer-collaborators and introducing monetary incentives may even stifle creativity and harm interpersonal interaction.

    Another question altogether is how appropriate the community sees the fact that the company is making money off their ideas if they themselves are not getting paid. This question sheds a whole new light on the subject. Even if money wasn’t important to the community members, some meaningful material (not necessarily monetary) benefit usually needs to be offered to at least the generators of ‘winning ideas’: this is to justify the company’s right to use the ideas.

  9. Niko Says:

    Sami, you have two important points that haven’t occurred to me:

    • Monetary incentives may even stifle creativity
    • Monetary incentives are not that much incentives, but a way for the company to justify exploiting the ideas for their own good