The human brain is hard-wired for rewards.
In fact, the mere anticipation of a reward stimulates pleasure pathways in the brain. The result is that sense of excitement you feel when visualising your next holiday or looking at an online catalogue of rewards.
Then of course, getting the reward you’ve been craving creates a rush of feel-good brain chemicals, stimulating your sense of satisfaction, happiness and pride of ownership.
In scientific terms, rewards reinforce our action / reward behaviour cycle. What this means, simply, is that you do more of what you did to be rewarded in the first place, which reinforces the craving for more reward.
This is, of course, a highly simplified explanation of an astounding and complex process in brain chemistry. But the point is that human behaviour is fundamentally motivated by a cause and effect reward cycle. We’re just wired that way as a species.
Plus, as much as we value our intellectual reasoning skills, our decisions to buy or not to buy; to engage or not to engage, are driven more by emotion than rational thought.
Creating those connections with individual people takes a more nuanced approach. That’s where getting rewards right matters. Here’s a start.
- Experiences are more rewarding than things. The science says it all; researchers at the University of California, San Francisco found that people place more value on experiences than things. The thrill of shiny, new objects fades fast, but experiences shape our identity and sense of being in the world.
- Make it very personal. You’ve got the big data, so mine it, segment it, analyse it eight ways from Sunday and you’ll begin to get a picture of individual people. Add ethnographic and psychographic research, plus syndicated survey research and you’ve got a customised segmentation model for effective communications. Sharpen the focus by creating personas – fictional representations of your target group. Now you’re getting personal.
- Offer freedom of choice. You can deduce from your sharp-focused segmentation that people have vastly different needs, wants and lifestyles. What is a thrilling reward to me, may be a ho-hum to you and face it, one-size never fits all. The answer is a rewards card. They’re hugely popular, widely accepted and simple, both to distribute and activate for spending. What’s not to like? Rewards cards are a must-have element in any rewards program.
- Reward for preference. Sometimes it doesn’t take deep analytics to get yourself in the right rewards ballpark. The generational spread of the current workforce has more or less forced the hand of old-school decision-makers, who think toasters make great rewards. (Mix that into your variable pay formula and see what happens!) Baby Boomers (50+) love prestige and status, Gen Z (23+) care about social causes. That’s a spread. And toasters just aren’t cutting it with anybody.
- Tune in to the right channel. No prizes for guessing the most popular reward distribution channel. Digital - yes. But which one? You can narrow your focus with a bit of data-driven research. Analytics, surveys and focus groups can help identify where people spend their digital time. Social media likes and dislikes tell a big story. Harness that data. And remember, you most likely won’t get it right first time. Keep experimenting.
- Surprise, delight and bond. If you haven’t yet upped your rewards game to surprise and delight, you’re missing a big opportunity to bond emotionally with your employees, channel partners and customers. No matter what the ‘reward’; a cash-back voucher, or a free coffee, the surprise and delight factor makes the experience exponentially more rewarding. And according to neuroscientists, the more random and unexpected the experience, the more pleasurable it is. Surprise, delight, bond.
- Very important person rewards. Tiering is a standard rewards program strategy. People at the top get to board the plane first or shop after hours and feel a bit superior to the rest of us. In theory, this motivates everyone else to do more of whatever it takes to achieve VIP status. Increasingly, rewards strategists are moving away from ranking to a frankly more respectful structure of recognising everyone’s unique value in the bigger brand family. Great news. We’re all VIPs now!
- Select a specialist rewards supplier. You must be getting the point by now that running a rewards program is not a simple DIY exercise. And why would you want to do it yourself anyway? If you’re thinking about costs, be assured you’ll get more value from the expertise and experience of a specialist supplier than the small percentage you may save on product. Not to mention fulfilment costs, management time, plus the inevitable and expensive inefficiencies of operating outside of your core business expertise. Ask the right questions, find the right specialist supplier. Enjoy the rewards.
About Joyce Monson
Joyce Monson is a freelance writer with an abiding interest in human behaviour. She has written for numerous trade and consumer publications on subjects ranging from loyalty marketing to employee recognition and rewards.