Understanding the Value of Incentives

By Crystal Markowski

Deciding how to incent marketing research participants typically depends on a number of factors. What does the project’s budget allow? How much time and effort will the study demand? How difficult is it to find the right participants? These are the first questions researchers usually have to answer to know what level of compensation is best. But, recently I learned there may be another question we should ask ourselves as researchers—How will the type of incentive affect how participants perceive the work?

This week I started reading Dan Ariely’s Predictably Irrational in which he relies on social experiments to explain our sometimes irrational-seeming behavior. One idea I’ve taken from the book so far is how the types of rewards affect the amount of effort people are willing dedicate to a task. Ariely illustrates that behavior is based on the “market norms” within which we interact—the social market or monetary market.

When we use money to reward participants, this sets the stage within the “monetary market.” Participants will adhere to its norms, and the level of effort they provide will be affected by the level of the incentive. Or as Ariely says, “You get what you pay for—that’s just the way it is.” Often times when we conduct focus groups or interviews, we interact within this realm and need to be aware that these norms apply.

But sometimes we incent research participants with gifts, and this is where it gets interesting. Compensation in the form of gifts (or even work that’s done for free) sets the exchange within the social market. In this context, people are still likely to put forth high levels of effort in tasks because they are seen as “friendly requests.” (Just think about some of the favors you’ve done for friends or neighbors, especially if they’re buying you lunch.) But things get tricky when we attach monetary value to these gifts by telling others their price. According to Ariely, research study participants “reacted to the explicitly priced gift in exactly the way they reacted to cash, and the gift no longer invoked social norms—by the mention of its cost, the gift had passed into the realm of market norms.” Thus, we’ve crossed the line and altered the context of the situation.

We as market researchers need to be aware of the types of incentives and how they affect the norms participants will follow. If you reward participants with gifts, the value of those gifts may not need to be that high as long as there is no mention of their price. Alternatively, if you compensate with cash, it is important to make the amount appropriate for the level of effort you hope to see. Selecting the right incentives can mean the difference between a successful research project and one that fails from low participation.


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