This is Why Survey Incentives Don’t Work

I received an email the other day from a company (with a product that I use) that was offering me a chance to win a $300 gift card in exchange for completing their survey.

While I was tempted, I decided to pass on the survey.

Why?

Because my time is a precious asset and one that I’m not willing to gamble on … at least not without knowing the odds.

Had this company mentioned that the email was only sent to 20 people, so I knew my odds were 20:1, I might have considered it.

But, here’s what I did know … or at least perceived to know based on the email:

  • If they’re incentivizing me to take a survey, there must be a lot of questions, which means a lot of time
  • This is a mass email, so it’s likely that 1000’s of people are getting the same email (making it even less relevant to me)
  • I never win anything, so why would this time be different

The truth is, I don’t know if anything I perceived to be true, actually is. This is just what I’ve been led to believe based on my previous experiences. That’s my reality.

But, just because I’m not willing to gamble my time doesn’t mean that others won’t, so I’m sure that they got some customers to respond. How many is anyone’s guess.

Now, imagine that instead of a lottery, they had offered me a guaranteed $5 Amazon gift card for completing the purchase.

This is now a proposition that I can properly analyze.

What I know is that on the other end of this survey, I’m making five bucks. What I still don’t know is how long it will take me to earn it.

While the certainty of compensation is enticing, I would likely at least click on the link to see how long this survey will take to complete.

I may answer a few questions and hope to see a status meter of some kind. Without one, I’m unlikely to stick around very much longer.

At the end of the day, there is a point in which the value of the $5 gift card no longer exceeds the value of my time. When this occurs, I’m gone.

Have you noticed that while I’ve been evaluating my willingness to participate in this survey, I haven’t once mentioned my interest in providing feedback to this company as a motivating factor?

I mean, isn’t that really the point of any survey to begin with?

It reminds me of the early days of list building as a marketer — using a sweepstakes to build a database.

You end up capturing a lot of fresh contacts, but they end up amounting to nothing more than vapor leads.

Nearly anyone that signed up for one of these contests had no interest in what your company had to offer other than the sweepstakes itself.

When it comes to padding your subscriber count number, incentives can work wonders.

But, if you want to build an authentic database, with subscribers who have an honest interest in your product, using a sweepstakes or giveaway is the wrong approach.

The same is true for surveys.

There is no arguing that offering an incentive to complete your survey will drive a higher number of responses. Without a doubt that is true.

What you need to ask yourself is whether a higher number of responses is your only goal.

Regardless of motivation, there are very few people (if any) that are patient enough, or even willing for that matter, to fill out a long, multi-question survey. There isn’t a reasonable incentive out there that will change this fact.

Still however, most long surveys will generate a response of some kind (1- 3% generally) from customers that truly want to be helpful.

If you sent out 1,000 surveys and receive only 10 – 30 completed responses in return, it’s natural to believe that customer motivation is to blame.

As a result, many companies will decide at this point to offer a reward for completion, such as a gift card, or a sweepstakes of some kind.

Like I mentioned above, this will certainly increase the response rate, but what many don’t realize is that the cost goes well beyond the expense of the incentive being offered.

This cost comes in two forms:

  1. Financial cost: The actual expense of the discount, gift or reward.
  2. Informational cost: The cost of inaccurate or biased data.

Financial cost is pretty self-explanatory and easily predictable, the informational cost however, is much more uncertain and can be terribly detrimental to the bottom line. The two biggest factors that contribute to this cost are:

Lack of Consideration: When a customer has a financial motivation, their objective changes from providing meaningful feedback to providing quick answers, especially when it’s a long survey.

If you’ve ever had to quickly fill in the remaining circles on your Scantron form back in High School to beat the exam buzzer, you’ll have a good understanding of how incentivized customers complete your survey. (We’ve all done it before.)

Scantron

Guilt Bias: While the lack of thoughtfulness is one concern, customers who are incentivized also have a tendency to provide more favorable answers due to the perception of a quid pro quo.

This isn’t necessarily a conscious reaction, but it can become more intentional when it comes to a contest or sweepstakes where a limited number of rewards are given out. This is due to the belief that positive answers may influence the results.

The combination of these two factors ultimately means that your results will become largely meaningless.

While incentivizing your customers will undoubtedly result in a higher response rate, the cost will always outweigh the benefit.

Out of 1,000 customers, would you rather receive 20 honest responses, or 200 haphazardly filled in Scantron forms?

Most companies would prefer neither, which is why they’ll opt to try a performance enhancing incentive to begin with.

This is the reason why the Net Promoter System has become so widely adopted. NPS is a natural performance enhancer. Feedback is organic and impartial, while generating a response rate of 25 – 40% on average. Additionally, NPS results are proven to be the leading indicator of a company’s growth potential.

If you want to optimize your customer feedback, stop using survey incentives — and start using NPS.

And, if you want your influx of customer feedback to directly impact the bottom line, make sure to use NPS the right way. Book a call and we’d be happy to spend a few minutes reviewing the best practices for your company and show you how Promoter.io can help drive growth. 

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Dana Severson

Dana Severson is the Director of Marketing at Promoter.io and cofounder of Startups Anonymous. Former founder & CEO of Chasm.io/Wahooly and AngelPad Alum. In addition to focusing on growth at Promoter, Dana is a weekly columnist for Inc.com

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