Gifts Work Better Than Rewards, and It’s Not Even Close
Marketers love rewards. They seem like such a safe bet. Dangle a prize at the end of the rainbow and people will surely behave exactly as you hope. It's neat, logical, and delightfully cheap…in theory. In reality, It’s a bit like trying to earn someone’s trust by telling them how generous you’re going to be later.
Human beings do not respond neatly to promises of future gain. Instead, we respond viscerally to acts of generosity. We feel them. We remember them. And crucially, we feel an urge (often unspoken, often subconscious, often irrational) to repay them.
And, the difference between a reward and a gift is not a trivial thing. A reward is conditional: “Do X, get Y.” It’s a transaction. Worse still, it invites calculation. Is it worth it? Could I earn more doing something else? Will I even get it? Am I being tricked? The minute you set someone's brain working that way, you’ve already lost.
A gift, on the other hand, says, “Here, this is for you, no strings attached.” And that taps into something far older and more powerful than commerce. It taps into reciprocity. Deeply ingrained in every culture on Earth, reciprocity says that when someone gives you something, you are socially obliged to give something back. It’s not a conscious contract ,per se, it’s closer to an emotional reflex.
And if you want proof this matters, consider the following experiment, conducted by researchers exploring persuasion techniques for survey participation. Participants were split into two groups. One group was promised a $50 reward if they completed a one-hour survey. The other group was sent a $5 check up front, along with a polite request to fill out the survey if they chose (Hsu, Schmeiser, Haggerty, & Nelson, 2017).
Now, by any economist’s logic, $50 should motivate far more people than $5. But reality is rarely so tidy.
Only 23% of those offered the $50 reward completed the survey.
Meanwhile, a remarkable 52% of those sent the unsolicited $5 gift went on to complete it. TWICE the success rate for one-tenth the cost.
If this result surprises you, you’re not alone. But, it’s no anomaly. The same principle has shown up repeatedly in field studies: when you give first, people give back. When you merely promise, they weigh their options.
When you run the numbers, offering a reward for 100 completed surveys would cost $5,000. Using a gift-based approach (even accounting for non-responses) would cost around $1,000 to get the same number of completed surveys. The result is the same. The cost is five times lower.
When you offer a reward, you create a transaction. When you offer a gift, you create a relationship.
And once you understand that human behavior is not built on cost-benefit spreadsheets but on subtle emotional debts, you start playing a much smarter game. If you want people to say yes more often, stop trying to "buy" their behavior. Use a little “pre-suasion” and their evolutionary instincts will do the rest.
Hsu, J. W., Schmeiser, M. D., Haggerty, C., & Nelson, S. (2017). The effect of large monetary incentives on survey completion: Evidence from a randomized experiment with the Survey of Consumer Finances. Public Opinion Quarterly, 81(3), 736–747.
For more on the power of prepaid incentives over promised rewards, see also:
Church, A. H. (1993). Estimating the effect of incentives on mail survey response rates: A meta-analysis. Public Opinion Quarterly, 57(1), 62–79.