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Good Points Blog


Non-cash incentives drive participation and engagement

Incentives are certainly ubiquitous. According to the Incentive Federation’s “Incentive Market Study,” nearly three-quarters of U.S. businesses use non-cash rewards to recognize and reward key audiences in the form of incentive travel, merchandise or gift cards, spending $76.9 billion per year on those rewards.

A cash incentive is inherently simple; it’s typically one step and done. But how memorable is cash? Non-cash incentives are about the experience. For example, a gift card isn’t just plastic or an electronic code; it is coffee with a friend, a child’s birthday gift or paint for a new house.

And with non-cash incentives like gift cards, the company has multiple opportunities to communicate with the person and reinforce their brand: when he chooses the gift card incentive, when he makes a purchase with the gift card and when he uses that purchased good. All the way through the process, the brand stays front and center in terms of messaging, further engaging the customer.

As the authors of “Freakonomics” aptly stated, “An incentive is a bullet, a lever, a key: an often tiny object with astonishing power to change a situation.” So how are companies harnessing the power of incentives? Employee incentives and customer rewards are two main subcategories of this behemoth spending category. Whether it’s used to reward an employee for healthy behaviors or recognizing a customer for reaching a spending level, an incentive represents an opportunity to provide choice. By choosing to modify their behavior, people become more engaged with the company or brand. From the brand’s perspective, it’s about meeting the person where they are and providing relevant, memorable experiences to facilitate that engagement.

Let’s look at a couple of case studies that showcase the power of incentives.


According to an employer survey conducted earlier this year by Fidelity Investments® and the National Business Group on Health, corporate employers plan to spend an average of $521 per employee on wellness-based incentives within corporate health care programs.This amounts to an increase of 13 percent from the average of $460 reported for 2011, and is double the per employee average of $260 reported in 2009.

In addition, the survey found that an increased number of employers are using these incentives. Nearly nine-out-of ten employers surveyed indicated that they currently offer wellness-based incentives (86 per-cent), an increase from 73 percent from 2011 and 57 percent from 2009.

Employers are smart to engage employees in healthy behaviors. By creating a wellness-focused culture, employers stand to improve productivity and reduce claims costs. Unfortunately, not everyone will make the healthy choice simply because it is in their best interest. Many people need to be motivated, inspired and encouraged to take full advantage of their health and wellness programs. Offering a broad catalog of incentives is a proven way to drive that engagement.

For example, a 2013 study of Connexions Loyalty’s incentive manager found that when given the choice between a $240 credit on their health insurance premium and a $225 gift card to a major brand, 82 percent of members chose a gift card – despite it being $15 less than the insurance premium credit.The psychology of decision making and choice are at play here. In his book, “Predictably Irrational: The Hidden Forces That Shape Our Decisions”, behavioral economist Dan Ariely explains, “Standard economics assumes that we are rational... But as the results presented in this book (and others) show, we are far less rational in our decision making... Our irrational behaviors are neither random nor senseless -they are systematic and predictable, making us predictably irrational.”


Every customer service misstep represents an opportunity. There is benefit to the brand in successfully fixing a mistake – often times even more benefit than if the mistake never occurred. In analyzing the results from one major brand that is using our incentive manager as a means of remedying negative experiences, gift card incentives have received higher scores on surveys than other types of offers. Specifically, 80 percent of people who were offered the gift card accepted it. And 80 percent of them did so within one week of receiving the offer. A gift card provides a compelling apology, which is an important step in the path toward engagement, a satisfied customer and, overall, deeper loyalty. Beyond the benefit to the individual, the apology can impact others’perceptions of the brand in question. Given the proliferation of social media, the good, the bad and the ugly are easily shared. Consider this scenario: Dimensional research.com states that 30 percent of people will tell others about a positive experience, where as 45 percent will share a negative one. The client case study above showed an 80 percent offer acceptance rate. So for the sake of round numbers, let’s say that 80 people accepted the gift card out of 100 people who were sent the offer. And each of those people has an average of 470 friends and followers through social media sites. If we assume that those 80 percent are happy with the gift card apology experience and tell their friends, that could amount to more than 11,000 positive messages. However, if nothing is done to remedy the situation, imagine a scenario where a significant portion of the 100 people shared the negative customer service story with their friends and followers. This could amount to more than 20,000 negative stories.It’s easy to see how unresolved customer service issues can quickly snowball into a major brand issue.


With 30 years of experience creating brand advocates through memorable experiences we have found that in order to maximize engagement, control costs and meet customer needs you have to offer choice, even if the value is different for each award. In a recent TableBase™ survey, more than 80 percent of consumers said that brand name of the award was important. Clearly “cash” isn’t a brand name. Even if the value of cash is higher, consumers will often choose what is important to them in the moment… connecting with that friend over coffee, finding the birthday gift or working on the new house. It’s our job to meet the person where they are and provide relevant, memorable experiences to facilitate that engagement.

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