🧧 Overjustification Effect:
Offering rewards can reduce a person's original motivation to do a task
People are deeply motivated to do certain things because of their intrinsic value (i.e., how it makes them feel), rather than an obvious external benefit (like money).
For example, you may pick up litter that you see in the street, because you want a cleaner neighbourhood. But you may resent being paid to pick up litter.
The overjustification effect, explains how the 'incentive' distorts the original intent, despite objectively being the same task.
A more product-related example would be being financially incentivised to invite your friends to an app.
If you genuinely believe that they'd benefit from the service, sharing it is a well-intended act. Your incentive is to help your friend (and possibly making your experience better).
But if that same app paid you £3 for every referral, your friend's account has a value. You may perceive an invitation as being worth more than £3.
It may also feel disingenuous, despite being the same action.
✅Sharing & referrals
"Invite your friends to BlobSpace, and earn $2.50 when they join" is likely to be off-putting to most people.
Instead, non-financial incentives (such as BlobSpace Premium Membership) is often more effective.
✅Effort & motivation
Motivation is directly tied to incentives. The point here is that some external incentives (e.g., money) distort a more natural and internal incentive (e.g., playing games with my friends).
✅Perception of value
If you were paid $2 for inviting a friend, you've anchored the value of your service to a low number.
✅Conversion rates
Here are some examples of good incentives:
Monetary value of your product — "$10 of free Instagram advertising, when you refer a local business".
Unlocking features — "Get 1tb more storage on DropBox when you refer a friend".
Limited supply rewards — "First 1,000 people to refer a friend get a limited edition pin badge".
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