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Redemption Rates and Behavioral Nudges: Lessons from Gifting Platforms
- When receiving a gift on corporate gifting platforms, many recipients do not redeem them immediately, posing a challenge for businesses like SnackMagic.
- Nearly 1 in 4 recipients accepted digital shop credits but never used them, leading to a reevaluation of the product's effectiveness.
- Redemption rates are not just a technical metric but a reflection of intricate human decision-making processes, prompting a closer look at behavioral science concepts.
- Three behavioral science concepts that helped in addressing the issue included reducing cognitive load to prompt action and creating a sense of urgency for gift redemption.
- Implementing prompts that emphasized potential loss over celebration of the gift itself proved more effective in encouraging redemption.
- Applying the Fogg model (Behavior = Motivation × Ability × Prompt) guided interventions to increase user behavior through A/B testing and optimizing user experience.
- By reducing friction in the redemption process and enhancing communication prompts, SnackMagic saw improvements in redemption rates and a smoother user funnel.
- Product interventions aimed at enhancing joy and user experience, such as nudging users toward action and streamlining choices, played a crucial role in addressing the issue.
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