Based on a 2008 survey by IncentiveMagazine, the top two gift card uses in incentive programs are torecognize performance (70.2 percent) and sales incentives (48.6 percent). Priorto allocating those awards, an organization has to decide on the award itself.There are important factors to consider when choosing how to award employees. Cash versus gift cards is often at the forefront of the discussion.
Gift cards or cash?
So which is more effective? While cash offers a little moreflexibility in terms of what it can be spent on, gift cards also offer choiceto the consumer, while also making a lasting impression, thus continuing to bethe more effective award tool. In fact, four out five people in the previouslymentioned survey, reportremembering gift cards longer than cash. And here’s why…
Trophy Value
Choosing gift cards over cash comes with a variety of justifications. Arguably, the top reason for using giftcards in your incentive program is what the industry calls “trophy value.” Whensomeone is given a gift card, they are given the opportunity to buy somethingfor themselves or a loved one that they otherwise would not have. Every timethey see or think about that item or service that was purchased with the giftcard, they are reminded of the performance that lead them to the award.
On the contrary, cash is often thought of as just “extracash” or an extension of salary, and in turn, often goes to bills, groceries, rentor mortgage payments, etc. These uses aren’t necessarily associated with the performance, and don’t create thatlasting impression of how/why they got it in the first place. Wirthlin Worldwide researchstates that only 20 percent of people receiving a cash award used it to buysomething for themselves or a loved one. In this case, gift cards hold thepower to motivate.
Word of mouth
Another benefit of trophy value is that once the employeehas used the gift card to purchase something, they now have a story to tell totheir coworkers. You’re generally not going to brag about how you boughtgroceries with your cash award, but will be much more inclined to boast about anew flat screen TV, or top-of-the-line fishing equipment.
This alone works in favor of the company or organizationbecause those employees who just heard about the new purchase may be moreinclined to work harder toward an award, as well. It is also beneficial to yourorganization to be thoughtful about presentation of these awards. Those whodidn’t “win” this time, will want to be up there next time.
Being tangibly awarded for doing a good job isn’t a newconcept, but an important one to keep in practice. It’s human nature to want tocontinue to perform when positively reinforced, even starting from a very youngage. Just like we spoke about in 2015,here at Marketing Innovators we make it easy for your gift cards to target andreflect your workforce. Make sure that your employees are maximizing theirpotential by keeping them motivated. It’s a win-win for everyone.
Areyou looking for a way to disburse and distribute rewards instantly? MIFunds is new technology from Marketing Innovatorsthat rewards employees who participate in your employee engagement program witha prepaid debit card. To learn more about MIFunds, contact a Marketing Innovators solutions experttoday.
