One of the early decisions to make in setting up an online research community is the incentive strategy to use for encouraging members to consistently participate in research-related activities. 

Below are three sample research communities, along with what we would recommend for incentive strategies in each approach.  By no means are these the only "right" way to approach an incentive strategy; rather, they provide guidelines to think about for your own research community endeavors.

Scenario #1 - Branded, ongoing research community with 50 IT Managers from small organizations

This might be a case for a points-based system based, with a point value being allocated based on their participation in individual research activities.  We'll assume that since it is an ongoing community (what we call a Nation) that the required amount of participation each week is relatively low (~15 minutes/week).  The maximum incentive value will vary based on their experience and level within the organization.  At 50 people, we may recommend a maximum incentive of $50/month (depending also on the budget for the study).

Scenario #2 - Branded, customer community with 50 members over 3 months

Since this is a short-term community (what we call a Neighborhood), it's likely that each week will require a fairly decent amount of time on the part of participants (on the order of 45 minutes/week or more).  However, this is also a customer community, meaning that members may have a vested interest in participating and helping to improve the products/services of the sponsoring company. 

For this community, a points-based system may also make sense.  However, the amounts could be based on monthly totals, with participants only receiving their incentive based on their point totals for each month.  Actual incentives amounts may vary from $10 - $50/person/month, with the biggest variable being time required each week.  

Scenario #3 - Unbranded, ongoing community with 300 affluent consumers

In this case, it may make sense to again use the points system, but have their points accumulate with the intent of donating to charity at the end of the month.  We may run a survey to choose which charity the community will donate to each month.  If participation starts to wane, an occasional sweepstakes may help to keep some members interested.  Budgeting for a sizeable honorarium for up to 300 members on an ongoing community is just not feasible (for most companies, at least).  

The variables in deciding on an incentive strategy...

You may have noticed from these scenarios that there are some key variables that influence the recommended incentive approach.  These include:

• Branding - Branded communities tend to get slightly better participation rates than unbranded communities, by virtue of the participants knowing who is sponsoring the research and potentially having a greater affinity toward that brand.
• B2B/Consumer Audience - Similar to traditional focus group studies, consumers are generally offered a lower honorarium than B2B audiences.
• Size - Offering an incentive to everyone in a large community can be a budget breaker.  In these cases, points or sweepstakes-based incentives may work best.
• Duration - Attrition occurs naturally in any community over a long period of time, and accounting for that in the incentive strategy is important. 
  
• Incidence Rate - Losing a recruit from a hard-to-reach audience can be expensive.  Providing them with an appropriate incentive for their time can be money well spent.
  
• Purpose/Objectives - One variable not included in our scenarios above is the objective of the study.  If the objectives tend to be fairly broad (e.g., general lifestyle/audience understanding), then some members may be turned off by the lack of focus.
• Customer/Prospect - Customers tend to (though not always) participate more than prospects, as they have a vested interest in the outcome of the research and the background knowledge of the company's products and services.
  
• Time Requirement/Activity Level - If you're asking people to spend a lot of time each week in the community, you should really think about adjusting the incentive amount accordingly.
• Budget - Last, but definitely not least in today's economy, is the budget available for the study.  While we would all like to pay an audience/situation appropriate honorarium to effectively thank people for their time and opinions, sometimes it's just not possible to fit within the budget... 
  

The conclusion

As you can see, there is no "one size fits all" approach when it comes to incentive strategies in online research communities.  There are just too many variables to account for...  However, this post will hopefully give you a few guidelines to think about in preparing an incentive strategy.

Thoughts?

Have an incentive strategy you'd like to share?  Wondering what makes sense for your community?  Comments/questions are welcome!

BusinessWeek posted an interesting article yesterday called "Will Work for Praise: The Web's Free-Labor Economy." The article talks about the challenges of encouraging participation online, both with and without financial remuneration.

While the article focuses mainly on a company called ThisNext and the public online community they have built around the concept of sharing shopping/product recommendations, it has implications for online focus groups and research communities as well.  There are a few interesting points from the article I'd like to comment on, including:

• The $10 Stipend - The article mentions the position of Communispace, a fellow online research community provider, and their belief that a small $10 stipend can boost participation.  This is something we have noticed as well - a small stipend can go a long way in boosting participation when combined with intrinsic forms of motivation (e.g., acknowledgement of contributions, emphasizing exclusivity, reporting back to the community on progress, etc...).  We also agree that the impact of the stipend diminishes as the amount is raised, unless you are able to tie contributions directly to the honorarium amount (e.g., through a points system).
• 4% to 6% Participation Rates - Yahoo notes that 4% to 6% of their users contribute their energies for free, which is in-line with rates I've heard for public communities.  In a private research community, however, those kind of participation rates would be difficult for many companies to stomach, especially if they are paying in the six figures to keep their research community open.  It would be like paying for a focus group where only one participant talks, and points to another reason why sometimes it makes sense to monetize contributions from community members.
• Varying Incentives by Personality - From the article, the chief of Yahoo Research also suggests that point systems must be varied by personality.  While we believe that providing an honorarium for members is generally a good idea, there are indeed situations and audiences where an alternative approach may be warranted.  For example, it wouldn't be appropriate to pay a $10 stipend to a research community of physicians or business executives.  In those examples, it makes the most sense to emphasize the intrinsic rewards above any monetary compensation.
• The Role of the "Maven" - The article talks about the role of mavens in boosting participation and creating valuable content for the community.  However, many researchers may be uncomfortable relying solely on the opinions of mavens to fuel the decisions they make as a result of their research community.  While mavens can be very valuable to a community, it's important to encourage feedback from a cross-section of users.  To extend the focus group metaphor again, relying on mavens would be like listening mostly to the overpowering participant in the group...

Predictions for the "Free" Labor Economy

If I had to make a prediction among online communities in general, I would guess that many will look to ways of monetizing the contributions of users.  This will especially become more common as the technology to setup and maintain a social site become widely available and the active users of these sites are increasingly more valuable.  I believe companies will look for ways to reward "average" users, and that this will likely be accomplished through point systems that are customized around the primary audience for the site.

What do you think?

Where will the direction of the web's "free labor economy" head?  Will more sites start monetizing the contributions of users?  What impact will this trend have on research communities?  Comments are welcome!

Related Posts:

If you've been following the blog here, you may have caught our earlier post on incentives in online research communities, which outlines some of our thoughts on why it is often appropriate to pay incentives in online communities.

The “official” call for Community 2.0 2009 conference presentation topics went out last week, and we’re brainstorming a few different ideas for topics. We’ve narrowed it down to 6 or 7 of the categories they provided, including:

• Preventing community burn-out/fatigue due to high proliferation of public and private communities
• Attracting users, engaging existing users, user incentives
• Interpreting social media conversations, proactive and reactive listening
• Processes for finding, thanking, and engaging lead users/influencers
• Communities for innovation and product development
• Community management roles and responsibilities

I know that other research community providers have been visiting our blog (and posting comments - thanks!), so if you’re interested in co-presenting something or running a study on research communities specifically for the conference, drop me a line at mfoley@pluggedinco.com.

I recently came across a comment from another research community vendor stating that they were against the idea of paying incentives in their communities. Their contention was that incentives take away the authenticity of the conversation, and that their members participate out of affinity for the topic or brand.

To some extent, they have a point. People will participate out of genuine intrinsic motivations and a desire to make a difference. However, our experience is that this no-incentive policy does not lead to sustainably high levels of participation (and therefore unhappy clients), even with the best community moderators leading the charge.

There are a couple of reasons why it’s appropriate to pay incentives to members of a market research online community, including:

• Appreciation - When you pay an incentive, it shows that you value their contributions beyond a simple “pat on the back.” In a long-term community, that’s critical.
  
• Time - On average, people spend much more time participating in the activities of a research community than in other methodologies.
• Research Precedent - The expectation with many participants is that market researchers pay honorariums for participation. While not the best reason to consider continuing paying an incentive, it nonetheless factors into the decision of whether or not to pay an incentive.

The honorarium need not be cash. It can be anything from product incentives, discounts or giveaways. The point is that it has to be something that fairly values members’ contributions to the research community (and ultimately to the company sponsoring the community).

Unfortunately, I worry this community vendor might be recommending a no-incentive policy to their clients because they also recommend large-scale communities (in the thousands). If they tried to pay an appropriate incentive for thousands of members, the cost of the honorariums would likely exceed the cost of consulting each month (translation: fewer clients).

Taking it back a step from research-specific communities, the issue of monetizing community contributions is something that community managers across the web have been trying to figure out for years. A big initiative in social media is determining how to monetize user generated content. The only difference here is that market researchers have been providing honorariums to participants since the industry began.