For years, the leading brands and incentive companies have had to fight against people using cash in rewards and recognition programs. Many managers and marketers assume that because employees and consumers almost always say they want cash, why not give them what they want? With the latest Incentive Federation research indicating that the market could be as big as $47 billion, it’s clear that organizations understand that they have other choices when it comes to communicating with and engaging customers, channel partners and employees.
No one disputes the fact that cash is the No. 1 form of compensation and the top form of commission or discount. The question is, what do you use when you want to get your message across in a compelling way, engage people in a specific direction, build a more personal relationship, etc., in a way that avoids any issues related to compensation or pricing?
Businesses clearly use cash to compensate and to adjust pricing, but they use noncash, tangible merchandise and travel rewards to get attention, recognize, thank people and build relationships in a way specifically designed to avoid any reference to or inference of cash. This understanding is best seen in the non-sales arena, an area once reserved for token awards and recognition. Today, over 80% of human resources departments use noncash rewards, and traditional service award programs now feature many of the world’s leading brands in every category.
That said, one could argue that the understanding of how to use noncash awards is still in its infancy. While the industry’s suppliers and practitioners have fought the cash/noncash battle for years, an even more important discussion has received almost no attention at all: How do branded rewards and recognition – either well known consumer brands or one’s own brand – function as a medium to enhance internal and external communications, engagement and marketing? In the mad rush to supposedly please everyone, organizations have missed the true communication power of rewards – that is, their ability to make a statement, convey a message, touch peoples’ material or even spiritual aspirations in a way that cash can never do.
As Ross Perot once said in another context, there’s “a giant sucking sound” of dollars flowing from mass to target marketing, and that goes for both external and internal audiences. In a world in which power is fundamentally shifting from supplier to customer, more and more organizations understand the need to connect with customers, channel partners and employees. Unfortunately, their competition gets it too. So we all face the daunting challenge of getting anyone to listen or pay attention to our messages, let alone getting them to do what we’d like them to do for our organizations, either as customers, channel partners or employees.
Simply put, noncash rewards, be they branded with a well-known company or with our own organization’s name, have become an increasingly powerful weapon in the arsenal needed to break through. Whether in the form of merchandise, travel or a personalized gift card, they have a three-dimensional element and perceived value that sets them apart from any other form of marketing, be it direct mail, print advertising, television or the Web. What reward media one selects can make all of the difference on the ability to get people’s attention, break through the clutter, connect with a fellow human being, and even reinforce or detract from your own brand image. Consumer marketers get it. They almost always select different forms of unique prizes and/or brands that connect with their target audience for consumer promotions. Planners of sales, dealer and incentive programs often miss this key point and simply crank out standard print or online catalogs to please everyone and make life easier.
How could it be otherwise? No one learns about such things in school; there are no books on the subject. Even the incentive industry barely touches on it. While everyone battles over price and delivery, little is said about the real essence of many merchandise and travel rewards: Who will they appeal to? How can they be best used to get attention? What do different brands or products stand for? How can they be best promoted to maximize impact and minimize any chance they could be construed as compensation or a discount?
The shift to target marketing has created yet another opportunity for the incentive business – to educate end-users on how to best use noncash rewards as a medium in a way that’s more measurable and has far deeper and more tangible impact on individuals than even the most effective ad campaign