Drumroll, please! I recently sold an item on Vinted for the first time — finally, a win! To be honest, I originally downloaded the app to sell things, but… well, let’s just say I got very good at buying instead. So yes, this was a proud moment.
But just as I was basking in my little victory, surprise! Up pops a screen telling me about an award I could win… 👀
Rewards have spread across every app over the past few years, driven by the growing popularity of gamification. In an attempt to boost engagement and retention, many apps have introduced reward systems. Usually, that’s how they work: you do something tied to engagement or retention and receive a reward in return.
It’s no surprise this approach is booming — the gamification market is projected to grow from USD 15.43 billion in 2024 to USD 48.72 billion by 2029, at a staggering CAGR of 25.85%¹.
And it makes sense that apps are trying to leverage this mechanism!
Everyone habit building framework such as the habit loop described in Hooked or the Atomic Habits framework, highlights the importance of rewards.
Although these frameworks are all different, their core remains similar:
1. I do the action that I want to form a habit around or that participates to that habit
2. I get a reward
Research shows that rewards plays a crucial role in habit formation by reinforcing the behavior and increasing the likelihood that it will be repeated. It operates on psychological and neurological principles, driving motivation and habit loops.
The problem is that apps are trying to recreate this in an artificial way. When I go for a run, I usually then treat myself to a delicious smoothie and my body releases endorphins. Together, this forms a great reward and makes me want to do it again.
But it’s really hard to recreate that digitally..
B2C apps started to introduce “rewards” also called “achievements” or “badges”.
They are little gratifications that are the equivalent of school merit medals when you do a good action. Duolingo gives you an unexpected amount of gems and has a section called “Achievements”, Amazon gives some “Badges”, Nike celebrates “Milestones”.
Gradually, as I accumulated various rewards across multiple apps over time, I started to seriously question whether they actually provided value to users.
In many cases, they didn’t feel very genuine, were childish and therefore didn’t act as a great reward.
If rewards are key to building habits but getting them right is tricky, what makes a reward truly effective?
And how do you use them strategically?
I’ll break it down with real-world examples from apps and websites that nail it (or didn’t..).
A good reward feels meaningful, authentic, and tied to the user’s motivation. It doesn’t just nudge them toward an action; it increases the sense of satisfaction they feel when completing it².
In contrast to some of the superficial gratification provided by digital badges or arbitrary “milestones,” effective rewards connect deeply to what the user values.
To create a good reward system, keep these principles in mind::
1. Align rewards with intrinsic motivation
Extrinsic rewards, like points or badges, can be fleeting unless they tap into something deeper.
For example, Strava’s year in review works because they connect to a runner or cyclist’s desire to compete and improve. The reward isn’t just about the badge; it’s about social proof and personal achievement.
On the other hand, I find Strava’s Trophy case quite dull and meaningless. It feels like I’m being rewarded for putting up with irrelevant ads from their partners, and it lacks any sense of personalization.
