Software applications can be valuable tools that serve different purposes. However, the full value that can be extracted from these solutions can only be experienced when all of their features are being used as intended.
It can be challenging for developers to ensure users are trying new features while sharing their experiences with friends or leaving comments on software review sites. Reward programs provide a great opportunity for brands to incentivize these actions, while improving the usability of their applications.
However, to get the most impact from reward programs, it’s important to follow a few basic strategies.
Understanding the Psychology of Rewards
Rewards are a powerful form of positive reinforcement that can impact individuals psychologically. When we receive a reward for our actions, dopamine is released into our brains, a neurotransmitter linked to pleasure and motivation.
This puts us in a much better state of mind and reinforces certain behaviors to experience the same sensation. While some people may not think too deeply about this process happening below the surface, it’s scientifically proven that it can directly or indirectly affect how we respond when completing certain tasks.
The motivating factors around these types of feelings are broken down into two different categories – intrinsic and extrinsic motivation:
- Intrinsic motivation – This is the type of motivation we have when we do things simply because it makes us feel good. It could be donating our time or resources to a charity or helping a friend in need.
- Extrinsic motivation – This type of motivation is inspired by the expectation of receiving something in return. You could associate this form of motivation with working a job to receive a paycheck or reward for any extra effort we put in.
When you design a reward system for your software applications, you tap into this extrinsic motivation. While not all types of rewards may activate this in everyone equally, the more creative you are with your rewards, the more likely you’ll achieve this goal.
Related: Dopamine Is Released | Photo: Canva
Different Types of Reward Systems for Applications
When building a rewards system, you’ll quickly realize there are different ways to format it. Below are some of the most common types of programs used in software applications:
Points-based Systems
In a points-based system, application users accumulate different point values depending on the actions they complete. Over time, as these points stack up, the user can redeem them for various items. These could be physical goods like merchandise, gift cards, or discounts that can be applied directly to their account.
Tiered System
Tiered reward systems are similar to a point-based format. However, they are more designed for longer-term engagement. In these scenarios, a user’s reward payout — points or some form of incentive pay — will continue to increase over time through different levels or tiers. The goal is to reward the user the longer they complete certain actions.
Badges or Achievements (Gamification)
Not all reward systems need to be tied to a form of monetary value. Gamification can also be a powerful motivator for many people — especially younger generations. This format puts digital badges or trophies in place that are rewarded for completing a certain number of activities.
These types of rewards are great for encouraging friendly competition among different users.
Common Challenges When Implementing Rewards Systems
It might sound easy to incorporate rewards into your applications, but there are a variety of challenges that come up when executing. Below are some things to keep in mind:
Reward Inflation
While it might seem smart to be slightly over-generous when creating rewards, it can backfire. When offering too many cash-based rewards, the question of long-term sustainability arises.
Offering too many rewards and then scaling back could give the wrong impression of your brand. In gamification formats, making it too easy to gain rewards can also make the program lose its appeal and not worth participating in.
Focusing on the Wrong Actions
It’s important to be strategic when deciding what types of actions warrant a reward. Many businesses get excited about incentivizing the use of every feature in their application. This broad approach won’t be as effective as prioritizing certain tools or features for a short period and then gradually moving on to a new category.
Undermining Intrinsic Motivation
Even though brands often focus on extrinsic motivation when implementing their reward programs, it’s important not to discount intrinsic motivating factors. The challenge with overly incentivizing users to use their applications is that if you ever decide to scale back these rewards or change strategies, it could lead to fewer customers.
It’s important to use extrinsic rewards sparingly to spark interest in the application or its features and allow the platform’s value to become the primary motivating factor behind its use – not just the rewards users receive.
Motivation | Photo: Canva
Key Strategies for Successful Application Reward Programs
When you’re ready to start designing your own rewards program, there are some key strategies you can follow that will increase your ability to see great returns on your investment:
1. Choose Meaningful Rewards
It’s important to know your audience first to choose rewards that resonate with them. Research what other competitors are doing and evaluate what kinds of rewards will receive the most engagement.
You can also experiment with different reward formats to see which has the most engagement. Depending on your application’s niche and price point, this may dictate whether you should have a rewards system that is quicker to activate or if a longer-term tiered system would be more effective.
2. Start Small and Build
When implementing a rewards program for the first time, it’s common to start in a testing phase to see which types of rewards resonate the most with users. This is why it’s smart to start small and create simple actions that new users can easily achieve.
As you see early signs of engagement, you can experiment with larger rewards or try new formats. Don’t bite off more than you can chew early on, and keep the program as simple as possible.
3. Incorporate Gamification Elements
The user experience you create for your rewards program can be as important as the rewards themselves. Creating fun, interactive gamification elements can increase your program’s usability and make it more engaging for your users.
You want the rewards system to be beneficial to the user and fun to use. Gamification is a great way to achieve this and help users enjoy all your application’s features.
4. Offer Flexibility With Your Rewards
Wherever possible, try to incorporate flexibility into your rewards program. Just like not every user will use software for the same purpose, they’ll also have different preferences on how they want to be rewarded for their efforts.
Depending on the program you implement, offering more than one type of reward could be a great way to encourage more engagement.
When redeeming their rewards, offering users the option to choose from cash rewards, merchandise, discounts, or even charitable donations can be a great way to add variety to your rewards and encourage a wider range of users to participate.
5. Be Transparent with Your Reward Programs
When designing your reward program, it’s important to provide clear instructions on how it works. This includes how actions are recorded and any rules that should be stipulated regarding redemption.
If you don’t take the time to identify certain criteria concerning your program or users become confused about how they can receive their rewards, it can create a negative experience that can quickly lead to negative software reviews and customer loss.
Make Your Rewards Program a Success
When designing software applications, a well-formatted rewards program can be just what you need to encourage users to test additional features or share their positive experiences with others.
By following the steps mentioned, you can help avoid the common pitfalls when designing reward programs and start to see great returns on your investment.
