In less than a year of its launch Tez has clocked 50 million installs with a rating of 4.5
What is the secret of its crazy growth?
Is it the simplicity of the app? Massive marketing by Google? Performance?
Nope. The secret sauce is its Scratch cards. And the usage of scratch cards is associated with earning variable reward. Instead of giving something constant like Rs.10 per referral, Tez gamified the referral system by using the age old dopamine rush inducing variable reward.
Once you get hooked to these scratch cards, Tez prompts you to unlock more of these by completing more transactions using the app.
Okay. Lets talk about Variable Reward. It is part of the now infamous Hooked model by Nir Eyal.
In case of Tez, the trigger is a push notification which informs the user that a new scratch card has been unlocked. The action is the simple act of scratching the card. The variable reward is the chance to win upto 1000 Rs. Most of the time you end up winning nothing. But the main reward is the dopamine rush which comes with the anticipation of winning a big sum by using the scratch card. Investment is the effort you put into the app with time (like adding your personal details, importing your contacts, kyc, unlocking a few scratch cards which will unlocked after a while) which increases the likelihood of you sticking to the Tez application.
You unlock scratch cards by sending as little as 1Rs to a friend. Tez’s best trick was to get the user to the variable reward with least investment possible (be it financial or manual).
Even if you unlock Rs. ‘Better luck time’ like me you would be back the next day. It is just like the case of a gambler hooked to slot machines.
This gimmick worked so well they tried it as part of their PR announcement today about Tez becoming Google Pay.
They even sent an email which touted this as the 2nd most important feature on Tez.
Going back in time, I would say Zynga Poker was the first product to use Variable reward daily to lure users. I know this because I used to empty my Zynga balance every night and then come back the next day by unlocking virtual money by opening their Surprise briefcase.
Zynga Poker was not the only one. WeChat unearthed the enormous potential of Variable reward and launched Red Packets during the Spring Festival of 2015. Red Packets went viral and WeChat ended up delivering over 1 billion Red Packets. Less than one year later during New Year 2016, WeChat users sent each other over 2.3 billion Red Packets. You can read more here: Red Packets – WeChat’s Secret Weapon in Payments
I had built a similar feature called Spin the Wheel (in 2015) to help us to scale Cashboss to 1 million users within 9 months of launch. Spin the Wheel rewarded users if they completed tasks inside CashBoss. The more the tasks you completed, the greater your chance of boosting your earnings by spinning the wheel. I shamelessly copied the idea from Zynga Poker’s daily Briefcase. Variable Reward is a crazy good lever for Growth. Tez has come to the same realisation 3 years later.
If you start thinking about variable reward, it is everywhere. Imagine if you got 10 likes on every photo you posted on Facebook. You would probably stop sharing as the red notification dots won’t be there anymore to let you see who liked/commented on your posts and also your current likes count.
Another interesting possibility. What if Dropbox instead of rewarding users with 500 MB storage for every referral gave you a variable space? Would you refer more people?
If you liked this post, you should read the book Hooked: How to Build Habit-Forming Products by Nir Eyal.