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Learning the Science of Reward Selection

  • Focus on the Behavior
  • Strive to Engage
  • Go for Emotion
  • Consider the Message
  • Answering Questions About Reward Options 
  • Sources

The art of reward selection is one of the most important skills in the creation of a successful incentive program, and one that distributors and resellers sometimes overlook as a way to add value to customers. Here are some things to keep in mind when helping customers create effective incentive programs.

Focus on the Behavior

The most obvious goal of any reward or gift program is to affect or change behavior and feelings—to motivate consumers to buy, dealers or salespeople to sell, plant employees to follow safe work practices and people to feel more loyal, etc. But that’s often not the only goal or the only effect. A reward program can have supplemental goals: to communicate a business message, to support a brand message, to strike an emotion and to engage the target audience in a way that makes them identify with the mission and objectives of the program.

Strive to Engage

In fact, in many cases, these last supplemental goals—communicating, engaging, branding, etc.—may be as important as the main goal of the program. Especially important is striking an emotion, creating a buzz or fostering engagement. Engagement is what supports the continuation of the target behavior long after the reward program is over, according to studies on employee attitudes and financial performance published by the Forum for People Performance Management and Measurement at Northwestern University and the International Society of Performance Improvement, among others. And that’s what makes finding the right reward so critical to meeting the goals of an end user’s program.

 

Go for Emotion

If the rewards or gifts don’t spark the participant’s interest or feelings and support the program’s objectives, then goals probably won’t be met, and the client likely won’t come back. The right reward will both motivate desired near-term behavior and help achieve the level of engagement necessary to create a long-term effect. End users will get better results if they understand that reward selection is a serious, systematic process that requires expertise and a firm understanding of a client’s objectives, audience, culture and other characteristics—not much different from selecting the right magazine or television program based on an advertising campaign.

Consider the Message

In the end, reward selection is not a matter of simply selecting from among options such as cash, gift cards, branded merchandise or travel. It’s a matter of selecting a reward that will convey the right message, engage employees to commit to a high level of performance and meet a company’s sales or other behavioral goals. The residual or trophy value of well-chosen branded merchandise rewards can be the key to achieving all of these goals.

Answering Questions About Reward Options

Incentive program sponsors have a lot of reward options to choose from, ranging from cash to branded merchandise and elaborate travel programs. Distributors and resellers thus have a major role in helping incentive users select the reward best suited to reaching the specific goals and motivating the specific audience. But first they need to have a basic understanding of the role of cash versus noncash awards and about how, in a world moving more toward targeting individuals, rewards have become a powerful branding tool as well as a motivator.

While employees and other incentive reward recipients will often tell you that they prefer cash to other types of incentive rewards, research shows that cash is a poor motivator for a number of reasons, all adding up to the fact that there is little “trophy value” to cash:

  • Most people don’t like to talk about cash awards, particularly the amount, so cash programs do little to generate the buzz surrounding an effective incentive program.
  • Cash often ends up being spent on everyday items or to pay bills, and therefore is quickly forgotten.
  • Cash incentives are often associated with salary and bonuses and get lost in the compensation and benefits equation. The termination of a cash incentive program can become a demotivator because it is perceived as a cut in pay.

Tangible, nonmonetary awards, on the other hand, offer significant benefits over cash. Dr. Scott Jeffrey of the University of Waterloo in Ontario prepared a study for the SITE Foundation that documented some of the advantages of tangible nonmonetary rewards over cash. For instance:

  •  The positive attributes associated with tangible, noncash rewards such as branded merchandise are often ascribed a higher perceived value than their actual cost.
  • Branded merchandise and other noncash rewards are perceived as separate from compensation and stand out as rewards for performance, enhancing their long-term motivational effect.
  • Program participants are more highly motivated by rewards that they normally could not justify buying for themselves.
  • Branded merchandise and other tangible noncash rewards have high trophy value, bringing greater prestige to the recipient at the time of the award and having a longer-term residual effect that can result in increased engagement in the sponsoring company’s goals and mission.

This last finding is especially important when you consider the supplemental goals of many incentive programs: communicating a message, branding, engaging participants, etc. Rewards are really part of a unique communications medium—whether it’s a sales or dealer incentive, and especially if it’s a consumer program—for getting a motivational message across to a target audience.

In fact, for many years consumer marketers who use premiums have known that the product, including the brand affiliation and the qualities conveyed by that brand, is critical to the message. In the sales and dealer incentive area, companies are beginning to understand the value of selecting the right reward, to take advantage of unique opportunities for brand alignment and other communications goals as well.

In addition, a lot of companies using incentive programs have begun to use catalogs and gift cards to increase the choices available to participants and thus increase the program’s appeal and motivational value. What gift card programs sometimes overlook, however, is the communication and engagement impact of their programs, and as a result, the program’s important supplemental goals may be missed. Gift card programs sometimes lose the potential of the message and trophy value that attaches itself to a well-selected branded merchandise award, as well as the residual value of brand association. Gift cards, in fact, have some of the same disadvantages as cash: They often get used for everyday items, there’s no perceived enhanced value beyond the cash value of the card and there’s no emotional appeal or engagement. 

Sources

Incentives, Motivation and Workplace Performance: Research and Best Practices (2002). Sponsored by the International Society for Performance Improvement and funded by the SITE Foundation, the landmark study is the most comprehensive ever done on the effectiveness of the incentive industry and its usefulness to employers in determining the relationship between incentives, motivation and performance in the workplace. The study shows that incentive programs have a very powerful impact on increasing work performance and introduces a new, diagnostic and prescriptive model, Performance Improvement by Incentives (PIBI), which provides guidance on the step-by-step procedures for design and implementation of incentive programs. Call Frank Katusak at the SITE Foundation at 212-590-2518; e-mail f.katusak@sitefoundation.org.

The Benefits of Tangible Non-Monetary Incentives (2004). Four psychological processes tip the scales in favor of tangible, noncash incentives. By Scott Jeffrey, an assistant professor in the Department of Management Sciences at the University of Waterloo in southwestern Ontario. He received his Ph.D. in Managerial and Organizational Behavior at the University of Chicago’s Graduate School of Business. Published by the SITE Foundation.

Federation Study 2005: Incentive Federation survey of motivation and incentive applications. Prepared by the Center for Concept Development Ltd. A study conducted among current users of merchandise and travel items for motivation/incentive applications and sponsored by the following members of The Incentive Federation:

Association of Retail Marketing Services
Incentive Marketing Association
The Motivation Show by Hall-Erickson Inc.
Promotion Marketing Association
Promotional Products Association International
SITE Foundation


 


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