Incentive Rewards FAQ
Non-cash rewards are physical or experiential rewards that are not in the form of monetary payment. Non-cash rewards are more personalized and create more of an emotional impact than cash rewards.
Examples of non monetary rewards include points-based merchandise rewards, gift card rewards, branded debit card rewards, recognition and awards for various achievements, and group incentive travel.
According to The Incentive Research Foundation, firms that experienced a 5% annual growth in revenue in 2018 were 52% more likely to use rewards and recognition to achieve a competitive advantage than competitors who failed to reach that level of growth.
The advantage of non-cash rewards is that they affect people emotionally in a way cash does not. Non-cash rewards have social value. You can talk about them and show them off to friends. Cash, on the other hand, isn’t generally a socially acceptable thing to brag about. It’s less tangible and less memorable and disappears quickly. Cash often goes towards bills, mortgages, car payments, and other expenses that are unexciting and quickly forgotten.
How do you decide which rewards will be most effective for your target audience?
When designing a non-cash rewards program, it’s important to examine and analyze your target audience and ask yourself the following questions:
- What is the demographic of my target audience? Based on what I know about them, which types of rewards will motivate them? For instance, a millennial audience will be more motivated by experiential rewards, such as concert tickets, or by slick electronic items. On the other hand, a more middle-aged demographic might be motivated by a themed social event or lifestyle rewards, such as golf clubs or home improvement items.
- How large is my target audience and what is their level of investment in my company? For a large size, small investment audience, gift card and debit cards might make more sense. For a small, high investment group of top performers, group incentive travel or big-ticket custom reward fulfillment would probably be more appropriate.
- How scalable does my reward solution need to be? For a large audience with a broad range importance and varying levels of achievements, you would want to make sure your reward was scalable. Points-based merchandise is a reward type that can be used effectively for this type of application, since it offers small, attainable goals for lower performers all the way to big-ticket, high investment items for top performers.
- Over what duration will my promotion run? For a quick sales promotion, lower investment, more attainable rewards make more sense. For a long-term relationship with high value customer accounts, you would want to provide rewards that were higher value and allow for a greater level of investment.
Why does incentive travel work?
Incentive travel creates the opportunity for “shared experience,” which, according to Brian Uzzi, Professor of Leadership and Organizational Change at the Kellogg School of Management, is the basis of strong relationships. Sharing a travel experience together – and getting away from the more mundane, day-to-day side of business – is the perfect setting to build meaningful, long-lasting, and personal relationships with people who help grow your business. Incentive travel is the most memorable type of incentive reward and makes the most lasting impact.
Furthermore, there is the motivational appeal of incentive travel. Top salespeople or clients will often work very hard to be included in a group incentive travel promotion to a desirable location. This is especially true of millennials, currently the largest generation in the B2B workforce. Experiential rewards, such as incentive travel, are particularly desirable for millennials. Additionally, incentive travel is motivational from a professional perspective, since it often presents the opportunity to network with high-ranking business professionals that may be useful for career advancement. Evidence shows that sales reps are willing to sacrifice up to 5% of their take home pay in order to be included on an incentive travel trip.
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