There is no secret that happy customers are more loyal and spend more time and money with your brand. Rewards are a great way to make your most valuable fans such as Abby happy and coming back. Abby happens to be a power user for Gimmie publisher Smartnet
While doing actions just to win rewards is not in general a good business practice, getting rewarded for actions you are already doing is a win win for everyone. Smart (no pun intended) companies such as SmartNet realize the cost of acquiring a new customer for their social network will be more than the cost of retaining one. The more time Abby spends talking to her friends on SmartNet, the more services and voice and data she will consume from the telco. Abby on the other hand has more reason to feel valued for all the time she has been spending, and this reward is a great way to do that, making the program a win-win.
Reward variability as described by Nir Eyal in Hooked, is all about giving the user choice in their reward experience. Here Abby has been receiving virtual badges which give her status as a power user. The SmartNet Rewards Catalog allows her to pick and choose from dozens of real rewards, and she chose this particular one, unique to her. Because the catalog is updated weekly, there are always fresh rewards to choose from.
In addition, there are mystery rewards which happen entirely by chance.
The lesson to learn is that blindly rewarding users with things you think they like is not the best approach, rather leverage the power of data, and analyze the trends of what rewards certain subsets of your users are redeeming.
Later we’ll talk more about what this means for the Advertiser or sponsor of the reward (hint: it’s also a win).