Prize Programs

Prizes are a democratic process for solving problems. Early examples date back to the 1500s (see our TEDx Talk). The model is simple. Sponsors offer a reward or bounty for a solution, and a community forms around your needs. Rewards are paid upon proof of performance or the subjective assessment of the best proposals. You define the standard of success – competitors vie to meet or exceed your expectations. As a result, sponsors realize a broad range of options (representing the state of the art, including unexpected approaches), convene a community of practice (containing both typical and maverick participants), only pay for results (yet gaining access to a wide range of viable alternatives), and activate their cause or brand across an engaged audience. The best prizes are agnostic to any specific pathway to success, inviting participation from experts in adjacent or new fields. In principle, no matter who you are, where you come from, or what you know, if you solve the problem… a prize offers fame and fortune.  

According to a study published by McKinsey & Company in 2009, the reemergence of prizes around the mid-1990s represented a renaissance. In the decade leading up to the report, the rate at which sponsors were adopting and reinventing this approach increased by 18% per year. The pattern and timing of this growth mirrored the expansion of the Internet, and the ability to access prize participants online lowered the barrier to entry (while expanding the reach of prizes). Today, this massive upsurge includes many successful case studies and cautionary tales. We’ve learned that while prizes are simple in principle, they are increasingly sophisticated in practice. Designing and delivering successful prizes is hard work, particularly as participants recognize that they have many options when considering where to compete. Sponsors who only offer “winner-take-all” propositions struggle, while prizes that ensure value to all participants (commensurate with each level of effort) are winning the day.  

The best prizes include tools and tactics which represent a more open, transparent, and fair user experience. When sponsors offer a level playing field, where the broadest range of participants can both compete and collaborate, the results are more specific and effective. For example, whenever we employ subjective elements of the assessment protocol for a prize, it’s essential to adopt rigorous but fair explanations of the scoring process (see our normalization algorithm). In spite of the size of the prize or the competitive nature of the sponsor’s needs, it’s essential to deliver tools which allow competitors to collaborate or share information, and when we employ those elements the overall effort of the community is more impactful. At Carrot, we recognize that our prize sponsors and partners are paying for results, but as we’ve invested in our platform we’ve engineered new tools and tactics that deliver value to every participant and that raise the ability for those sponsors to realize benefits beyond what any handful of winners can deliver. The fact remains that well designed prizes will leverage your sponsorship, inspiring a wide range of activity and possibilities for follow-on investment.

Book a Demo today, to learn more about Prize Programs.