Facts You Need to Know to Run an Online Rewards Program

by: Luke Kreitner March 7, 2016

Reward Programs: What Works and What Needs to be Improved

  • Previous research has confirmed (Scott, Sperling, McMullen and Wallace 2003) that effective reward programs contribute to overall organization effectiveness.
  • Communication was the second most-mentioned theme, with 29 percent of respondents indicating that reward communications needed improvement and 15 percent seeing it as a strength of their reward programs.
  • Alignment specifically with goals, strategy, results and objectives was twice as likely to be mentioned as a strength than lack of alignment as a weakness.
  • Most Admired Companies were more likely to indicate that leadership support was a strength of their program than an area that needed improvement.
  • Effective rewards communications typically include the following:
    • Simple and focused messages that offer brief explanations of rewards elements.
    • The use of multiple methods of communication, including newsletters, manager presentations, Web sites and video segments. Get the communications and marketing departments involved to help frame and communicate pay-program information.
    • The practice of “strategic redundancy” of important objectives and features of reward programs or “keep repeating the message.”
    • Pilot tests of communications messages and mediums with managers and employees before broader rollout.
    • The education of managers and supervisors regarding the reward programs before communicating to the broader workforce. Get the training department involved in designing and conducting these programs.

IRF Fall 2012 Pulse Survey Provides Current Snapshot of a Typical Incentive Program

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  • The ‘average’ merchandise/noncash incentive program in the Fall of 2012…
  • Will be positively affected by the economy (50%)
  • Will have increased merchandise award values (36%)
  • Will offer more gift cards (31%)
  • Will include these types of rewards: Electronics (79%), Golf Items (68%), Luggage (66%) and Housewares (62%)
  • Will be a point-based program (82%)
  • Will have a slightly highEr budget (42%)

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Effort for Payment: A Tale of Two Markets

  • We hypothesize that monetary markets are highly sensitive to the magnitude of compensation, whereas social markets are not. This perspective can shed light on the well-established observation that people sometimes expend more effort in exchange for no payment (a social market) than they expend when they receive low payment (a monetary market).
    • Hypothesis 1: The relationship between compensation level and effort will be different in social versus money markets.
    • Hypothesis 1a: In money-market relationships, effort will increase with payment level.
    • Hypothesis 1b: In social-market relationships, effort will be at a high level and insensitive to payment level.
  • Effort under the low-payment level of the cash [reward] condition was below that of the no-payment control condition, but effort in the low-payment level of the candy [reward] condition was not. The difference in the reaction to the low level of payment in the two markets was statistically significant, again supporting Hypothesis 1.

Ten Trends for Merchandise and Gift Card Programs in 2015

  • The 2014 IRF Pulse Survey shows a decline in the number of organizations that believe economic conditions are having a negative impact on incentive programs.
  • 50% of planners in the fall of 2014 say they will be increasing their budgets;additionally, per-person spend is up.
  • While a third of the industry felt that the economy was having a negative impact on merchandise and gift card programs at the recession’s height in 2009, that number dropped to less than 10% in late 2014.
  • As reported by Emarketer (Jan. 2014), there are approximately 4.6 billion smartphone users today.
  • Between 68-80% of all business applications are currently available over smartphones and laptops.
  • Expectations are that mobile apps designed by businesses for their internal use and competitive advantage will explode over the next two years – a market expected to reach $53B by 2017.

A Comprehensive List of 90+ Gamification Cases with ROI Stats

  •  Keas: employment wellness program that increased employee engagement with healthy activities by 10,000% (100x)
  • Cisco: used gaming strategies to enhance its virtual global sales meeting and call centers to reduce call time by 15% and improved sales by around 10%
  • Extraco Bank: raised customer acquisition by 700% through gamified system
  • Lawley Insurance: with a 2-week contest, the company closed more sales than the previous 7 months combined
  • Hewlett Packard: launched Project Everest to give rewards like holidays and other goods to the best reseller teams and saw a 56.4%

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