In today’s consumer-focused society, people see rewards everywhere they turn. This trend encompasses traditional offline offers — “fill out this magazine subscription form and we’ll send you a tote bag” — and the digital world. Data shows that searches for “reward(s)” related to specific brands have grown more than 40% year-over-year (source). For mobile app businesses, how can we harness this interest in rewards to connect and engage with our users?
My colleague Jeni explored this topic in the article ‘The right app rewards to boost motivation’ — looking at how users might perceive rewards and change their behavior as a result of these incentives. The post also looks at some success stories, such as McDonald’s tactic of driving app installs by offering a complimentary sandwich and Wish’s approach of offering variable in-app rewards to users. In this post, I will dive deeper into a rewards experiment we ran with our Files app.
What drove the need for the experiment?
Files grew out of the insight that mobile phones run out of space. Files was launched in 2017 as a mobile-first solution to freeing up space, finding files faster, and easily sharing files with others. While the mission was clear, there were other competitors in this app space who offered peer-to-peer file sharing and space-saving capabilities.
One of the features the team worked hard to perfect was the peer-to-peer (P2P) file sharing. It was available on the app from launch and the team wanted to engage more users with it. The team was confident that more users would fall in love with the Files app if they experienced it for themselves. This is when we started thinking about using rewards to help users discover this feature.
As Files is a relatively new app, we also wanted to find opportunities to reach more potential users in addition to encouraging increased use of the feature. In designing a rewards experiment, we sought a way to incentivize both acquisition and user engagement with P2P sharing.
We identified these three goals for the rewards experiment:
- Acquire new users in a cost-effective way and drive them to use file sharing.
- Increase awareness of the app’s file-sharing capability.
- Achieve sustained uplift for file-sharing use.
We designed the campaign so that Files users could earn up to 10 Google Pay rewards, worth up to Rs. 100, for doing an offline P2P file share with a friend. If it was the first time sharing for the recipient, both the sharer and recipient were rewarded. This motivated existing users to find new people who had not used Files before. We ran the campaign for 3 months in Indonesia and 1 month in India, two of Files’ largest markets.
This experiment with rewards proved very successful and showed us that:
Rewards can help grow your user base
As discussed in Jeni’s blog post with examples, such as the McDonald’s app, we weren’t completely surprised to find that offering users real-world rewards led to new app downloads. We saw a similar outcome here with this campaign boosting the pace of user acquisition by a factor of 16. We also achieved a customer acquisition cost (CAC) that compared well with other acquisition mechanisms. However, we would need to do further work to determine if this performance could be maintained over more than a few months. Over the course of the experiment, we acquired more than 10M new users who installed and opened the app.
Rewards need protecting from abuse
Soon after we announced the reward offer, social media took it to the next level. The offer went viral with users sharing with their friends and stirring up a flurry of likes, re-posts, and comments. We saw 100s of YouTube videos being uploaded by users who were teaching other users how to try out the P2P sharing feature and earn rewards. Several of these videos reached over 100k views.
While we expected this reward offer to create buzz, we were surprised by how quickly this picked up with the help of social media. While it was great to see the user excitement, fraud and abuse protection was key to ensure we were reaching genuine users only.
Rewards help users discover new features
The team was thrilled to see a 9x increase in use of the feature within the first week. It was satisfying to see a direct impact so quickly, but it was also gratifying that this campaign achieved the long-lasting impact on feature use we had hoped for. Three months after the reward offer ended we compared the use of the file-sharing feature to the 3 months prior to the campaign and found that there was an average 73% increase in use per user.
Our experience with the Files reward program has shown that in-app rewards can be an effective mechanism for encouraging the use of a specific app feature. Even better, where that feature has a social element, in-app rewards can drive downloads and new user acquisition. In the case of Files, in-app rewards offered these benefits in a cost-effective way, providing a practical alternative to traditional engagement and acquisition campaigns. We plan to continue our experiments with in-app rewards and will share our insights and learnings with you, so, look out for more in the coming months.