shutterstock_140171341.jpgHave you ever won a free trip, free concert tickets or free admission somewhere special? If so, I bet that you remember quite a bit about the experience. My mom and uncle still reminisce about their free childhood trips to Kennywood, a little amusement park outside of Pittsburgh, that my grandfather won in a work contest.

Recently, I was sitting with a sales compensation lead, and we were talking about some recent benchmark studies that show that cash is still king when it comes to contest awards, but we’re both firm believers in the importance of rewarding with experiences—and in the sticking power that such rewards have. As our meeting ended, the sales comp lead summed it up nicely by saying, “It’s about time we ask ourselves ‘What will reps remember?’ rather than ‘What do they want?’ ”

Looking at various studies, you’ll find that, if given the choice, reps will almost always choose cash because they can spend it on whatever they want. But studies also show that if a company can provide a selection of comparable prizes, the reps will actually get more satisfaction, and the memory of the gift will live on. 

Why is it important to think about what a rep will remember? Simply put, it all comes down to ROI. If the memory is positive and lasts longer, you’ll see residual benefits for a single action. If we consider three types of prizes—cash, trips and catalog points—each one has a different implied memory:

  • Cash has the lowest recall of the three. In fact, it could have zero recall if the cash reward is direct-deposited. Often, I hear reps acknowledge that cash goes right into the bank and ends up being used for standard bills.
  • Trips have a much longer memory in reps’ minds because, for one, the trip usually isn’t instant, so there’s the buildup between winning and actually taking the trip. Also, people are more apt to talk about the trip with family and friends than they are to talk about a cash prize. Thus, the strength of the initial mindshare is higher. Finally, there will always be a connection between memories of the trip and how the rep won it.
  • Catalog points will result in a longer memory than cash, and could even exceed a trip because there are multiple touch points for the rep in winning the prize: first when he wins, then when he scrolls through the catalog and sees all of the great things that he can get, and finally when he actually receives and uses the prize.

If you aren’t currently using trips or points as part of your compensation program, you might want to consider it. Of course, cash will always have its place and be the majority of any company’s program, but if you can build associated memories, everyone will benefit. 

 

Topics: incentives, rewards, Mike Martin, sales comp, contests, ROI, cash