If you're looking for a hands-down great reward with universal appeal, your first thought might be cash. And you'd be correct.Everybody loves cash rewards. But if you need a reward with longer-term motivational effectiveness, think incentive gift cards.
Where once gift cards were single-use, promotional strategy items used by retailers to entice return store visits, businesses have been quick to identify benefits way past one-time use. Gift cards have found application as consumer promotional gifts, channel incentives and employee performance rewards. In fact, experts predict that by 2025, the international gift card market will grow to a $510 billion dollar industry.
So, you say, gift cards are a contemporary phenomenon, but why do they beat cash as incentive rewards?
1. Cards are fun, cash is cash
As a reward, cash has instant gratification going for it. And choice. People can buy whatever they want with cash. But therein lies the problem. While receiving cash is certainly rewarding, that feel-good can fall apart in the spending, which more often than not involves something practical, like a car service or some everyday purchase at the grocery store. Where’s the reward fun in that?
Gift cards, on the other hand, are lots of fun to give and to get. They represent the perfect balance between good old practical transactional cash and the fun, feel-good of personal indulgence potential of a true reward. Guilt free.
Often, rewards are viewed as luxuries that people wouldn’t consider buying for themselves. That’s one reason cash tends to go straight to the household budget. Gift cards lower that barrier by nudging, even encouraging, indulgence.
Think about it. Portia may be dreaming of buying a high-end music system, but keeps putting it off as an ‘unnecessary’ purchase. Then, she receives a gift card to an electronics store and she’s happily off shopping for the music system of her dreams. And feeling good about it. Her hard work has paid off with a special purchase she could not otherwise justify and there’s no guilt to spoil the pure joy of reward.
2. Reward is not remuneration
The whole point of a reward is to say thanks for the extra effort, or well-done on your certification, or happy birthday from the team. There’s a surprise element to a reward that makes it memorable. Gift cards, presented with sincerity and a little ceremony, provide that element of surprise. And there’s an over-and-above performance message that makes it special.
Rewarding should be a daily management habit and a way to continuously reinforce positive behaviour. The problem with regular cash rewards (or occasional cash rewards for that matter) is that they become expected. They blend in with monthly income and tend to disappear down that black hole of daily expenses we all know well.
So, imagine the day the cash rewards stop coming because your budget has been cut or you’ve transitioned to a non-cash rewards program. Apart from the fact that people may have come to depend on that additional money to cover the bills, they also feel cheated, as if you’re taking away what’s due to them. Which, as you can imagine, can undo whatever motivational momentum you’ve built with your rewards program, and have decidedly negative effects on engagement and performance.
3. Cards are for social sharing, cash isn't
Imagine the Facebook post, “Hey, guess what? Today the boss gave me a R500 thank you reward. Pretty cool! Like and share.” Even in today’s era of sharing pretty much any and every detail of daily life on social media, there are certain lines that typically aren’t crossed. And bragging about money is one of them. Gift cards have what is known in the incentives industry as ‘trophy value”, that tangible reminder of achievement that holds a special place in memory.
For more on trophy value see our blog, The trophy value of rewards and why it matters
This example, adapted from an Incentive Gift Card Council whitepaper, illustrates the power of trophy value in incentives and rewards programs.
Two employees, Jess and Thabo, are rewarded for the same achievement – Jess chooses R5 000 in cash and Thabo chooses a R5 000 gift card to a large sporting goods store. Jess decides to deposit the money, but first takes R2 700 to make a car payment, another R1 500 for extra spending cash, and deposits the rest.
Thabo goes home that night, tells his wife about the card and they decide to go shopping that Saturday. He buys a golf driver that he’s been dreaming about for months and his wife buys a pair of high-end running shoes and a waterproof jacket.
Back at the office on Monday, Thabo’s friends ask him what he bought with his gift card. And two days later, he was on the golf course showing off his new driver to colleagues and clients. No one asked Jess how she spent her money. Her friends figured she paid off some bills, which is exactly what they would have done with it.
The story ends one year later. Thabo is still enjoying his special driver and it will forever remain a pleasant reminder of the day he was rewarded for a job well done. Jess, on the other hand, can’t remember where that R5 000 reward went or even why she got it. The point here is that cash rewards are meaningless without some tangible reminder of the behaviour that earned the reward. A trophy.
Maximise investment value
Rewards are more than a momentary feel-good gift for being a nice person. People respond in a very real way to being appreciated, recognised and rewarded. There’s satisfaction in a job well done and rewards serve to reinforce great work and maintain motivational momentum. Think of them as a business investment your people.
We’ve got lots of ideas to help you maximise the business value of gift card rewards. Get in touch today. Let’s talk rewards.