Customer research can offer a gold mine of insights. You gain new perspectives, confirm hunches, and get feedback on developments before you’re too far down the rabbit hole.
There’s a catch, though—you need to have enough people participate.
It would be great if customers wanted to be a part of your UX research out of the goodness of their hearts. Since that isn’t a universally applicable strategy, we use customer research incentives to boost participation.
Instead of blindly throwing cash at a project, it’s helpful to consider what type of incentive is best for your audience. Here’s what you should know.
A customer research incentive is a reward that companies give people who complete surveys, interviews, and tasks. Offering an incentive helps companies gather essential feedback from both customers and non-customers so teams can make informed decisions.
TL;DR, customer research incentives sweeten the deal so companies can entice more people to participate in research.
Before you start comparing types of incentives, take a few moments to assess your audience. The amount you pay out and what incentive you offer are directly affected by who you need to talk to and what you're asking of them.
Paula Glynn, Search Director for Pixelstorm, shared that,
“You will need to think of the best incentive for your particular audience and what would motivate them specifically rather than a one-size-fits-all approach.”
Here’s what to consider when you begin to plan your customer research incentives:
Where and when a person interacts with your company impacts how much they expect for their time. For example, a B2B customer might expect a higher rate since you’re asking for their professional input. You may be able to sway a casual consumer that’s going to participate in research from the couch with lower rates.
Some benchmarks we suggest are:
There’s a third customer category to consider—charities and nonprofits. Richard Simms, UX Design Lead at Open Universities Australia, added that,
“It’s worth tailoring the rates that are offered based on the organization type and size. I currently work for a Not-For profit which allows for a slight reduction in the rates.”
Suppose your research participants are in the same country or region as you. In that case, translating the value of an incentive is straightforward. If, however, you have customers across the world, you’ll have to adjust incentives. There are three ways your customer’s location impacts your incentive type and amount:
First and foremost, research the exchange rate between your base currency and your customer’s home currency. Then, look at the cost of living and buying power in a country. If researching world economies isn’t your thing, refer to the Big Mac Index to understand the value of currencies between locations. If your home currency has a higher purchasing power than your customer’s country, you can adjust rates down to be comparable.
Finally, look up tax rules in your country for payments to non-employees. In The United States, you would have to file a 1099 form for any research participant that you paid more than $600 to, for example.
The final level for determining how much you should pay research participants is how difficult they are to recruit. If you want to talk to people with a specific skill set or in a small niche, you’ll probably have to pay more for their time. A broader audience means more potential participants, which can translate to lower fees.
It also helps to consider what you’re asking customers to do. For a simple task, a small incentive will do. More in-depth discussions or research sessions should come with a higher reward.
It only takes a few moments to get overwhelmed at the number of research incentive options. The straightforward options like cash start to seem a bit murky when you dive into things like tax considerations and bribery rules. But will anyone care about your stickers or mugs?
Let’s take a closer look at five types of customer research incentives and when to use each.
“Time is money.” “Cash is king.” “The almighty dollar.” Since your participants deal with money every day, it’s easy for them to translate the value of the reward to their lives.
Pros of using cash as a research incentive:
At first, offering cash as an incentive seems simplest. There are a few tricky considerations, however.
Cons of using cash as a research incentive:
If you want to use cash as a research incentive, you have to think carefully about who will receive it. For example, a purchasing manager who buys supplies from multiple companies may not take cash from one supplier. Government employees might also not be able to accept gifts.
When to use cash as a research incentive:
Cash equivalents, AKA gift cards, are another popular choice for customer research incentives. While they aren’t as straightforward for customers to use, they’re a close second, especially if you give people a few gift card options.
Pros of using gift cards as a research incentive:
Gift cards can take a bit more work for researchers to set up, especially if you don’t have a research tool like Great Question in place.
Cons of using gift cards as a research incentive:
Most of the same rules as cash incentives apply to gift cards. Namely, gift cards are widely appreciated but may violate bribery rules.
When to use gift cards as a research incentive:
If social impact is important to your customers, offering a donation in their name could incentivize people to donate their time to your research.
Pros of using charitable donations as a research incentive:
If, on the other hand, donating isn’t a strong driver for your customers, an equal dollar amount from a donation might not be as incentivizing as a cash payment.
Cons of using charitable donations as a research incentive:
Charitable donations are a great choice if cash is a no-go for your audience. This type of incentive is similarly manual as gift cards if you offer a few organizations for participants to choose from.
When to use charitable donations as a research incentive:
Note: Great Question offers the ability to provide incentives in pre-paid debit cards, gift cards, and charitable donations in any country around the world.
Sometimes, you can keep customer research incentives in-house. If you don’t want to mess with third parties like gift cards or charities, you could offer a product discount or credit.
Pros of using company credit as a research incentive:
Offering discounts as a research incentive is enticing because it doesn’t cost anything upfront. Not everyone will take the bait, though.
Cons of using charitable donations as a research incentive:
Company credit might not catch the eye of every person in your audience, but it can work well for engaged users. If you need to talk to die-hard fans, offering company credit could be the way to go. If you want to use company credit on non-customers, you might have to keep the task small since the perceived value of the incentive is lower.
Who says customer research incentives have to be digital? If you have branded products, like stickers, mugs, shirts, and more, you can offer them as an incentive.
Pros of swag as a research incentive:
Swag is similar to company credit since not every person will jump at the opportunity to get their hands on it.
Cons of swag as a research incentive:
If you need existing customers to complete a small task or meet up for a quick interview, go ahead and try swag as an incentive. There’s no cash value for customers, so it probably won’t fly as an incentive for an in-depth interview or commitment. Swag is a fun reward for customers willing to help you out a bit for free stuff.
The final decision you have to make is how to get the research incentive in the hands of your customers. While you can use hands-on methods for small, infrequent research, you’ll probably want something more manageable if you plan to scale your research.
If you only need to send a few payments, you can pay customers directly with PayPal.Some researchers prefer to control payment processing to ensure payments don't go to no-shows or invalid responses. PayPal works worldwide, so it’s a good choice if your payments need to cross borders.
The downside to manually sending digital payments is that it gets overwhelming as you manage more participants at once. While sending payments after a session is doable for a customer or two, the process can get tedious if you have ongoing research or many participants. PayPal only works for cash payments, so your incentive types are limited.
If you want to offer gift cards as a customer research incentive, a site like NGC comes in handy. Digital gift cards are available from more than 300 retailers. You can either choose to use NGC’s API to deliver eGift cards instantly with white-labeled emails or bulk order rewards to send manually.
An eGift card distributor like NGC has many of the same pros and cons as a payment tool like PayPal. It’s a good option for sending a small number of incentives. Still, the upkeep to track and process payments for continuous research can be unnecessarily time-consuming.
If you want to simplify your customer research process, Great Question can help. Our UX research platform uses a Tremendous API to integrate customer research incentives directly into the customer research process. When you set up a new research task, you can choose and fund an incentive in minutes. Options include no incentive, money or gift card, coupon code, and product gift (AKA swag).
Your research team sets up the incentive at the beginning of each research project and then leaves the rest to Great Question. The experience is also easy for participants since payments are automatic. Customers can use Tremendous to receive their payment via Visa and MasterCard prepaid cards or a wide range of gift cards if you opt for a cash reward.
Looking to improve the way you’re managing incentives? Learn more about how Great Question automates the payment of incentives - whether cash, gift card, charitable donation, swag, or coupon codes.
Ned is the co-founder and CEO of Great Question. He has been a technology entrepreneur for over a decade and after three successful exits, he’s founded his biggest passion project to date, focused on customer research. With Great Question he helps product, design and research teams better understand their customers and build something people want.