A few years ago, Frito-Lay announced a $1 million prize for the winner of a contest to come up with a new potato-chip flavor. Around the same time, Knorr, the soup company, offered 2,500 euros for the person who came up with a “revolutionary hot savory snack.” Starbucks, meanwhile, solicited customers for new ideas, improvements to existing products, and requests to bring back products that Starbucks had dropped but didn’t offer a prize.
Does Crowdsourcing Need a Cash Prize to Work?
Offering nothing is better than a small prize.
April 22, 2019
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Summary.
The results of an experiment suggest that when crowdsourcing ideas, if you are looking for a larger selection of ideas to choose from, put up a big prize. On the other hand, if you don’t mind a smaller selection of original ideas or don’t have the resources to vet a lot of ideas, offering no prize will work just as well. Low rewards don’t seem to serve any purpose. What is certain: Before launching a full-blown contest, you should conduct an experiment to determine the optimal size of the reward you should offer.