Crowdsourcing: what’s the optimum monetary reward for attracting top participants?
Published on 09/6/2023
Published on 09/6/2023
Getting innovative ideas is the main motivation of the many companies turning to crowdsourcing, which offer monetary rewards to participants with the most on-target suggestions. A study conducted in part by Mariyani Ahmad Husairi, researcher at NEOMA, has assessed the effects of the size of the reward on the participation rate and value of the submissions.
It is thought that many global brands have turned to crowdsourcing over the past few decades. This type of participatory production is based on open calls for contributions. Companies appeal to all sorts of individuals simultaneously via their own websites or an alternative platform rather than doing the job in-house or using a service provider. Corporations such as Nestlé and PepsiCo have employed this method to pinpoint new flavours for their snacks and other goodies. And then there is the case of BMW, which was on the look-out for ideas to organise the luggage compartments of its SUVs.
Companies turn to crowdsourcing because it means they can outsource the quest for new and innovative ideas and reduce the risks of creative design or development. In addition, they use it to access a range of skills they do not have in-house. Companies normally use financial incentives to persuade the public to answer their calls. Ahmad Husairi and her co-authors looked at how the size of the reward impacts the rate of participation and the likelihood of harvesting suitable solutions.
The study was based on an analysis of over 50,000 people who signed up to 183 competitions on eYeka, a French crowdsourcing platform that specialises in design. Most of the calls made online take the form of creative competitions. More often than not they attract a broad range of candidate profiles with the promise of financial compensation for the winners. Is offering high monetary reward a good or a bad tactic? Everything depends on the expectations of the company issuing the call.
The researchers noted that the number of prizes up for grabs per competition has a positive effect on participation. The more the number of prizes offered, the better the chances of winning. In turn, more people will contribute. And yet, it is the size of the reward that boosts individuals’ likelihood of participating. Accordingly, the researchers recommend that companies keen to go viral or engage their customers in product development step up the size of their rewards. The study cites the example of Walkers Crisps’ successful “Do us a flavour” crowdsourcing campaign that offered sizeable monetary rewards. Between 2008 and 2009, the British firm received more than one million new flavour suggestions for their crisps.
At the same time, a large reward increases the rate of ill-suited suggestions submitted by participants. In other words, the chances of finding helpful new solutions is whittled down.
The danger of offering high rewards is that a company will receive an overwhelming number of ideas, and will see a drop in the attention level of the evaluators as a result. The latter will then tend to select familiar submissions that are similar to what the company already does. When it comes to complex tasks such as creating a new design or logo, the challenge isn’t to boost the general participation, but to draw in people who will come up with on-the-nose ideas with an original touch. Irrespective of the size of the reward, this is crucial since the researchers demonstrated that the winners are often the most experienced participants.
To entice the right profiles and elicit the right ideas, the researchers recommend linking high rewards to the skills profiles and required experience at the competition’s outset. In this respect, the platforms may use algorithms to pinpoint and prioritise the candidates most suited to the call’s requirements.
The study zeroed in on the impact of the size of a monetary reward; money, however, is not the answer to everything. The researchers further explain that people who take part in crowdsourcing competitions may also be motivated by the simple pleasure of pulling off the proposed challenge. This means that non-monetary rewards, such as recognition or the possibility of a job, may affect participation and the quality of the work delivered. It would be a good idea, therefore, to weigh up the impact of the different rewards so that firms opting for crowdsourcing can offer the incentives that will appeal to the profiles most in sync with their objectives.
Chirag Patel, Mariyani Ahmad Husairi, Christophe Haon, Poonam Oberoi, Monetary rewards and self-selection in design crowdsourcing contests: Managing participation, contribution appropriateness, and winning trade-offs, Technological Forecasting and Social Change, Volume 191, 2023, https://doi.org/10.1016/j.techfore.2023.122447