Dr.

Manish Sinha about 657 words

manish@skrilo.com

Asymmetry vs. Equity in Consumer Gratification

A bird in hand is worth a two in the bush, but is it worth millions?

“A bird in hand is worth two in the bush.” We have all grown with this proverbial learning.

But let’s tinker with the idea. What if there were more than two in the bush? Let’s increase the

birds (gratification) in the bush to twenty, and then to two hundred, leading to thousands and to

millions. You get the point. How does the balance to seeking out what is not in hand tilt?

Depending on a given individual, circumstance, utility function and risk appetite, the equilibrium

must shift eventually, though at varying points for each scenario.

Herein, lies the value proposition of asymmetric rewards, where the opportunity cost of an

assured reward is low relative to the alternative.

Uniform Distribution Curves (A deterministic and equitable approach):

Incentivized marketing is a part and parcel of any business process wherein the consumer is

rewarded for typically engaging with a product, service, research or campaign. Migrating a

consumer from an impression or a view to engagement is the end goal of the gratification

process. Now, the norm is to pay every single consumer which engages in a marketing program.

This can be mathematically defined with a uniform distribution curve. The challenge here is that

with a finite budget, and a large consumer base, the benefit per individual can only be very small.

Often, it would be fair to call it an “equally unpaid” model. The gratification does not move the
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needle for any consumer. A classic example of such a model in today’s mobile marketing world

is the use case of app-downloads. A plethora of firms have come to the forefront who drive

downloads by giving away small rewards. Given, the extremely small denominations of the

payout per download, and the instant gratification process underlying it, the quality of

engagement is suspect. Furthermore, to garner meaningful sums, the consumer is merely moving

from one opportunity to the next – with no real interest in the product or service offered.

Enter Asymmetric Distribution Curves:

It is possible to create a more meaningful gratification program, where a uniform distribution

curve is skewed to create an asymmetric distribution. The trade-off here is that the downside of a

consumer engaging in a marketing campaign is zero but the upside is outsized. Not a bad trade to

be in from a risk-reward perspective. No wonder, consumers have been drawn toward festive

season bonanza like offerings.

Let’s look at an incentivized program from a different vertical. A group of researchers from

Stanford University, KDDI R&D Labs, Accenture Technology and University College London,

conducted a very interesting experiment called Steptacular. They devised an incentive

mechanism to promote wellness. The credits earned from the daily steps walked could be

redeemed deterministically (uniform distribution in our context) or randomly. The random

reward was via a board-game where the credits could have very small or large payouts, based on

luck. One of the key takeaways of the experiment was that the preferred option of redemption of

the credits was one of randomized rewards. Only 2% of the users opted for a deterministic

payout. Secondly, the engagement was positively correlated to the “perceived” reward money. In
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addition to the nature of gratification, the response was potentially favorable due to the intrinsic

gamified elements in the empirical study.

Skrilo – a gamified marketing program with Asymmetric Distribution

In Skrilo, we have created a first of its kind marketing approach which has embodied the

inherent biases and tendencies of the human response system. A gamified approach, increases

the engagement with the marketing campaigns of the brands. The randomized option of

gratification, increases the potential rewards and thereby the perceived monetary benefits in

place. Finally, the asymmetric distribution of the rewards is an exciting, engaging, meaningful

and promising avenue that cannot be ignored for its market and innovative potential.