I'm sure this post will get someone's goat. Hopefully, they will comment to keep the conversation going. The post is a bit long but I hope it helps put this award thing in perspective and provide readers with the information necessary to determine which award media to use when putting together a performance program or any initiative that will result in an award, or an incentive/recognition outcome.
Too often the first step in that process is to start by talking with a company that does "incentives" and ask them. But...If you talk to someone selling trucks - they will tell you that a truck is the answer to all your automotive transportation problems. Go figure. If you talk to someone selling travel awards you will hear that travel will solve all your performance problems. If they sell "gift certificates" or "gift cards" you will hear about all the ways that award is better than any other award media. If they sell both they will steer you toward the award that drives the best return for them - not you.
I call B.S. on that thinking.
There is no "one award" that can cover all the angles.
So if you've decided to use an "award" to influence behavior let me give you some advice.
Awards are outputs - they are the end result of a behavior being changed. They are the tangible evidence that a participant has focused their behavior in the direction the company (or sponsor) wanted. It is not the start - it is the end. However, which award you use has impact on the effectiveness of the initiative.
I created a graphic that can help put the different award options in perspective. For simplicity's sake I have included only the major categories of awards. There are many sub-categories and specific types within each grouping. But for discussion purposes I have included:
- Cash - always a choice - don't let anyone tell you cash doesn't work - its does - when done correctly in the right situation.
- Points - the ubiquitous "performance point" that has no real cash value but can be earned and then used as a currency to redeem for merchandise and individual travel awards (typically.)
- Pre-Paid Cards - or "debit cards" where dollars are deposited in a recipients account and the card can then be used where ever the card is accepted. Usually a VISA or MasterCard based product. There are variations on this - single use cards offered through VISA or Mastercard or American Express - or through specific merchants such as Best Buy. The latter are typically referred to as "gift cards." The most used incentive tool is prepaid cards which allow for multiple deposits over time and therefore are referred to as "reloadable."
- Group Travel Awards - As the name implies - a group of people who achieved a specific goal travel together to a location. Think "President's Club."
- Non-Monetary Awards or Perks - I separate this out to highlight that awards can be things with little monetary value but have a value to the recipient. Things like special lines at airports for "gold" members, or early purchase opportunities for loyal customers, fall into the "perks" category.
Using these five broad categories of awards I then chose two axis. First, what is the goal of the program and second, what is the length of the program. There are other things I could have used but these two are very typical constraints that are considered when developing a program.
For time frame I just went with "short" and "long" - each person's definition of short and long can vary so I'm assuming that short is less than three months and long means one year or longer.
For program objective I chose "transactional" and "relationship" as the two ends of the spectrum. This is very typical in performance programs. Either I want to influence a behavior at a specific point in time and for a specific action - or I want to influence behavior over a longer period of time and build a "relationship" with my audience.
Again, there are many, many other objectives for programs but I think I could shoe-horn them into one of these two with a couple of questions.
The Chart
So - long preamble - but here's the chart. (clicking the chart will pull up a larger version that you can print off and keep handy.)
The way to read this chart is to look at your objective - is it to motivate an audience to do a "thing" - a behavior? Then stay in the bottom half of the chart, then ask yourself, "do I want this to be a short-term thing or not? If short-term, then look to the bottom left - you will see cash and points as the options for awards. If the program is designed to reward relationships and you want to reward those relationships over time then look to the top right - group travel, some pre-paid cards and non-monetary awards.
Each Award Has A Place
You may be surprised to see "cash" in the chart since I represent an "incentive" company. The rationale for this is that cash is easy to do, can be done through existing payroll systems and if you're looking at a short-term program focused on a specific behavior it won't be confused with compensation. Most incentive companies won't tell you this (they don't make money selling cash.) But the reality is that in many cases, short-term incentives that you don't think will be repeated - cash can work. You'll also note that cash only makes up a small portion of that quadrant. That's because using cash as your spot incentive only makes sense in very specific, non-repeatable instances.
If you're looking for short-term incentives but plan on doing more than one, then using points give you the ability to link initiatives together under an umbrella currency without connecting it to compensation.
You will see cash again in the lower right quadrant - that's your typical, sales compensation program where the person is paid for specific activities.
Where you won't see cash is in the "relationship" side of the program objective. That is because using cash as a reward almost inevitably makes the relationship "transaction-based" and creates an audience of mercenaries who will shift loyalty based on the monetary value of the relationship. Don't do it!
You'll notice that Pre-paid cards skew to the right on the "time frame" scale. That's because typically they require a separate administrative and reporting process which costs money - money that should only be spent if the program will continue for while.
In the top right quadrant are group travel and non-monetary perks. Group travel is a great long-term way to build relationships with your top-tier customers, employees and channel partners. Providing special "membership has it's rewards" perks is another way to segment and reward those who you need to build strong, long-term relationships with.
It's start - not an end...
There are many variations on this chart - and I'm sure given enough information about a specific client need I could show where this doesn't apply. But like anything in the world - ya gotta start somewhere. And until I see something better - this is as good a place as any.
Great Chart! Absolutely agree!
www.enriqueburgos.com
Posted by: Enrique Burgos | January 08, 2008 at 09:16 AM