Ask your sales force what they want as a reward and you'll hear "Cash!" But that's like asking your children what they want for dinner... likely you'll hear "Lollies" or something only slightly healthier.
Using tangible rewards, or non-cash equivalents, is a lot like serving a well-balanced meal. Yes, you need staples like cash (protein) but you also need tangible rewards for their nutrients and flavour (vegetables, fruit and carbs).
Compared to cash, tangible rewards have the benefits of:
But did you know that tangible rewards, specifically using award points, can also save you money?
If you tell people that each month they do X they will earn $100, they immediately start to compartmentalise where that money will be allocated – savings, paying off bills, buying petrol… it becomes integrated into their daily life so that eventually, earning that $100 a month is just part of their salary. If you stop that incentive, you are essentially decreasing their salary by $100, which causes quite a bit of strife.
Instead, if you use points or tangible merchandise, you can decrease the value of the reward without seeming to affect someone’s take-home pay. Where in one fiscal quarter the rewards value may equate to $100 per person, the following quarter may be $60. It’s also important to promote the rewards in terms of outcomes, not dollar value.
In an award point scenario, people tend to browse the selection of gifts available and find something that they’d like to have. Imagine that the item is a massage chair, and it takes 200 points to get it. Now they’re willing to participate in the first incentive where they can earn 100 points. If they achieve it, they’re halfway to the chair. In the next incentive, they can earn 20 points. They aren’t so concerned that they’re earning fewer points than in the first incentive. Instead, they’re focused on getting 20 points closer to that chair. In this way, the power of accumulation is what drives the repeat behaviours.