Based on a 2008 survey by Incentive Magazine, the top two gift card uses in incentive programs are to recognize performance (70.2 percent) and sales incentives (48.6 percent). Prior to 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 more flexibility in terms of what it can be spent on, gift cards also offer choice to the consumer, while also making a lasting impression, thus continuing to be the more effective award tool. In fact, four out five people in the previously mentioned survey, report remembering gift cards longer than cash. And here’s why…
Choosing gift cards over cash comes with a variety of justifications. Arguably, the top reason for using gift cards in your incentive program is what the industry calls “trophy value.” When someone is given a gift card, they are given the opportunity to buy something for themselves or a loved one that they otherwise would not have. Every time they see or think about that item or service that was purchased with the gift card, they are reminded of the performance that lead them to the award.
On the contrary, cash is often thought of as just “extra cash” or an extension of salary, and in turn, often goes to bills, groceries, rent or mortgage payments, etc. These uses aren’t necessarily associated with the performance, and don’t create that lasting impression of how/why they got it in the first place. Wirthlin Worldwide research states that only 20 percent of people receiving a cash award used it to buy something for themselves or a loved one. In this case, gift cards hold the power to motivate.
Word of mouth
Another benefit of trophy value is that once the employee has used the gift card to purchase something, they now have a story to tell to their coworkers. You’re generally not going to brag about how you bought groceries with your cash award, but will be much more inclined to boast about a new flat screen TV, or top-of-the-line fishing equipment.
This alone works in favor of the company or organization because those employees who just heard about the new purchase may be more inclined to work harder toward an award, as well. It is also beneficial to your organization to be thoughtful about presentation of these awards. Those who didn’t “win” this time, will want to be up there next time.
Being tangibly awarded for doing a good job isn’t a new concept, but an important one to keep in practice. It’s human nature to want to continue to perform when positively reinforced, even starting from a very young age. Just like we spoke about in 2015, here at Marketing Innovators we make it easy for your gift cards to target and reflect your workforce. Make sure that your employees are maximizing their potential by keeping them motivated. It’s a win-win for everyone.
Are you looking for a way to disburse and distribute rewards instantly? MIFunds is new technology from Marketing Innovators that rewards employees who participate in your employee engagement program with a prepaid debit card. To learn more about MIFunds, contact a Marketing Innovators solutions expert today.