Inspired Incentives

Ditch the Cash, Focus on Rewards

Posted by Chris Largent

Mon, Nov 06, 2017 @ 10:22 AM

Non-Cash IMAGE.jpegThere’s a scene in TV comedy series, Seinfeld, that you might have seen. It’s Elaine’s birthday and Jerry gives her a nicely wrapped present. “Just the fact that you remembered means everything,” she says, beaming. But as he’s handing it over Jerry keeps his grasp on the box a bit longer…

“Maybe you won’t like it,” he says.

“Oh, how could I not like it? Of course, I’ll like it,” Elaine retorts.

She opens the box and gets to the bottom of the wrapping and stops. She slowly pulls out a big wad of dollar bills.

Cash?”  The audience laughs. “You got me cash?

“Well, that’s right,” Jerry says, unknowingly. “Now you can go out and get yourself whatever you want…”

“What are you, my uncle?” Elaine asks with a look of disgust on her face. More laugh tracks.

The scene goes on, and Kramer comes in with another present. This one is a small, simple bench that Elaine opens with jubilance, giving Kramer a big hug. “Pretty good, huh?” Kramer says in his blissful pride, but then…

“Cash?!” Kramer exclaims, when he hears Jerry gave Elaine money. “That’s like something her uncle would give her.”

It’s a great scene, and you can watch the full thing here.

 

In this TV episode, Seinfeld plays with a certain stigma that holds true in society; cash as a present to a friend is a bad gift.

This might be because of the perceived lack of thought or the easiness of offering a cash gift. Jerry’s one line, “Now you can go out and get yourself whatever you want” might be at the root of it as well. You’re supposed to have gotten me a meaningful gift on my birthday. Now I have to go pick something out myself.

Whatever the reason for the stigma, we can all agree: cash is certainly something we all want, but it makes for a bad gift.

 

So, Why Do We Offer it as an Incentive?

Think about it. Most businesses would benefit from a close and meaningful relationship with their employees, customers, and sales people. Why then would we offer them a quick, thoughtless gift for their time and business. It’s surely not very meaningful.

What’s more, not only is it a bit thoughtless, but contrary to what we might think, cash also isn’t even very effective at doing what it’s intended to do. That’s because cash incentives actually motivate sales personnel less effectively than non-cash incentives.

True motivation does not stem from being handed a raise or a bonus at the end of the year. Although your monetary standing may have improved, ultimately money often goes toward the purchase of necessities, such as bills, chores, a tank of gas, the copay at the kids’ orthodontist appointment, basically all the day-to-day costs of living that need to be paid for but are in no way memorable or inspiring.

When you add a cash bonus to your bank account, that money quickly blends into rest of your income, making it hard to discern even what you used it for.  

Additionally, in the event of a lump sum cash gift or reward, the recipient often has to pay tax on the cash they’ve received, further devaluing the “thank you”.

So rather than giving them cash, which seems impersonal or even tiresome for the recipient, give them something they’ll not only remember, but something they’ll forever associate with you and your brand—something flashy and fun, something worth celebrating.

 

If Not Cash, Then What?

Rewards. Prizes. A brand-new TV or a trip to St. Lucia. The list goes on. 

It depends on what behavior you wish to reinforce. A reward is great for when someone, like a sales person, has done a phenomenal job. A prize, on the other hand, can be given out at the end of a promotion, for example.

Say you want to launch a new product and need to reach a goal by the end of the quarter. The prize at the end should reflect the effort that your buyers/salespeople had to go through. A poor example of this would be a cash prize.

If your customers are buying luggage from you and at the end they simply get their money back, yeah, that’s nice, I guess. But what if instead you sent them to a destination, where they could then use that luggage. Now that’s memorable.

Just imagine one of your customers, employees, or salespeople coming back from a trip that you were able to send them on, and one of their friends or colleagues asking something like, “Hey, nice tan! Where’d you go?” or “I saw your trip on Instagram. It looked amazing! What was the occasion?”

Inevitably, the response would lead back to something like, “Oh, I earned it for doing business with Company X.” From then on, in that person’s mind you would forever be associated with their positive reward.

Finally, just like knowing what your friends like, it’s essential to know your audience. You can take a hint from Kramer. It’s a good strategy to keep your ears open for that special gift your friend keeps talking about. With incentive programs, you can set up a wish list capability that allows participants to pick out specific prizes and rewards that they would like to redeem for.

Installing special point-earning opportunities for work or program anniversaries, birthdays, jobs well-done, and more, can help your participants achieve enough to afford those sought-after prizes and awards.

Set up these strategies, reward your participants, and watch as their appreciation for your time, effort, and thoughtfulness skyrocket as they jump with joy, just like Elaine.

 

Download Our Whitepaper to Learn More 

 

Still not convinced? Take a look at our whitepaper, How Non-Cash Incentives Drive Sales, or give us a call at 888.220.4780, or email us at marketing@hmiaward.com to learn more.

 

Sources:

https://files.acrobat.com/a/preview/1c9fa812-2804-419f-84fe-e501be405d6e

https://www.shrm.org/hr-today/news/hr-magazine/pages/0403cadrain.aspx

Topics: Non-Cash Incentives