Unlocking User Engagement with Variable Rewards in Software Design

I can’t imagine which investor would be willing to incur losses from his investments. Every Investor desires maximum returns on his returns unless there are other attractions to the investment, which would provide other non-monetary incentives or returns.

Why do people patronize some Ponzi schemes, even when they know there is a high probability of losing their investments? The thrill of making some incredible returns, even when such chances are slim, keeps them hooked, believing and hoping for a miracle.

Why do you think this happens? Do you think people are excited about constantly losing their money? Not! The reason is what behavioral psychology calls habit-forming.

It is a strategy used by the gaming industry to elicit absurd habit-forming choices.

The Concept of Variable Rewards.

A Variable reward is a gratification token used in the Hook Model, delivered randomly, to get users to repeat the same action continuously, hoping to get a reward with each repeated action.

Renowned Psychologist, B.F. Skinner studied the behavior of rats with two levers - one fixed and releasing food constantly, and the other providing varied results. He noted that the rats preferred the variable lever to the fixed lever, thus corroborating that this act is an absurd habit-forming one.

This act is called Variable Rewards. It validates that variable rewards increase the dopamine levels in our brains, leading to a continuous search for the next reward. This concept also proves the effectiveness of unpredictable rewards in maintaining interest and encouraging a particular repeated behavior. In gaming, the anticipation is what keeps the players engaged.

Software Design and Variable Rewards

Variable rewards are applied in almost all spheres of life, including the Tech Industry. Many top tech products use them to captivate their users, making them engage with the products, sometimes, out of habit.

Nir Eyal, author of Hooked, categorizes these variable rewards into three types: rewards of the tribe (the desire for social recognition), rewards of the hunt (the desire for material gain), and rewards of the self (the desire for personal achievement).

There are five strategies successful tech products use to captivate users and get them hooked through variable rewards.

1. The Impact of User Interface (UI) on Variable Rewards

Many apps such as Tinder, Click Up, etc., use the Variable Rewards system to keep users returning for more engagement. For instance, Click Up uses monetary incentives to encourage its users to use the app. Users are so excited at the prospect of making some easy cash, that they don’t reconsider before exploring the opportunity repeatedly. With repeated engagement, they soon learn more about the product and keep using it, as they have become addicted to it.

2. Get Users To Invest To Get Variable Rewards

The expectation of a reward can drive users to engage with a product, even when the rewards are not instantly accessible. Some products require a form of ‘Investment’ from the users before they can access the variable rewards. This investment does not have to be financial; it could be in the form of ‘signing up’, ‘following a page’, ‘liking a comment’, etc.

For example, Facebook requires that you follow people to see whatever updates they make on their page.

WhatsApp requires that you save a person’s phone number to be able to view their status.

Airbnb requires users to verify their personal information and connect their social accounts, to be able to get value from the use of the app.

To find more information about using social tools, check out our article on using digital signage for your business.

3. Variable Rewards Without Any Investment

We stated above how users need to make some form of ‘investment’ to reap the rewards. However, having an engaging community on these social network platforms seems better.

App developers would attract better engagement, if their platform fostered a community that users could connect to, as opposed to requiring them to sign up, like, share, follow, etc on the platform to earn rewards.

One platform that has successfully achieved this is ZINGR. ZINGR offers features that help user interaction and connectivity. As a user, you can connect with people in your locality, share videos, etc. The app promotes social engagement in the community, which is what most people actively seek.

4. Creating Variable Rewards

Variable rewards are one of the most powerful tools companies adopt to get users hooked, it would make sense to create them even where they do not exist.

Some apps like Duolingo achieve this goal through gamification. Gamification brings some fun to an activity that is considered boring. The gamification process here involved creating a learning currency known as XP; and rewarding users with different amounts, based on their performance while studying the languages. This has increased the level of engagement on their app and facilitated several referrals as well.

Asana also adopts the gamification strategy, whereby users are rewarded with a celebratory creature each time they complete a task. This keeps users engaged since they are excited to see what magical creatures will appear when they complete a task.

5. Get Variable Rewards Without Doing Much.

Variable rewards do not necessarily have to arise from active engagement on a platform. It would increase patronage if users could earn the same or similar variable returns from passive usage. There are so many apps and platforms that it would be absurd to expect active engagement by users across all.

For instance, a platform like MailChimp, highlights other types of rewards, like tracking list growth and email performance, etc, when users don't perform major actions on it.

Although drafting an email might seem boring and unexciting, the expectation of how it performs makes up for the boredom and provides the needed excitement.

Getting Users Hooked, Giving Value

We have seen how Variable reward schedules can keep users engaged, eventually getting them to develop habit-forming attachments to products. This can provide significant value, as well as provide real value to the parties involved.

The Variable rewards for each product should align with its core value. Aside from its variability, it is important to know what rewards your users would like to get from your product.

The benefits from Variable rewards are not short-term. Long-term engagement is necessary, to reap the benefits, which includes getting your users hooked to your product, and having them refer your products to other users, which increases engagement and provides value.

Variable rewards are not just a one-off thing. Remember to onboard your users to get the required information to create future variable rewards, sustain user interest, and enjoy value continuously.