Feature Article - March/April 2013

What Motivates?

Choosing Rewards That Work

By Rick Dandes

Over the past few years, as the mega, online retailers grew increasingly prevalent, many incentive and reward programs began trending toward offering a vast amount of redemption possibilities. But, is there a point when this more-is-better approach becomes unwise, as some marketing and motivation experts believe? Is there such a thing as too much choice?

The evolution of award choices has certainly taken on the perception of being "meteoric," agreed Richard Blabolil, president of Marketing Innovators International Inc. in Rosemont, Ill., who offered some historical perspective. "If we take a quick look at what might have precipitated this, it began with the original award catalogs of 1,500 to 2,000 items, which contained mostly high—real and perceived—value brand items."

A relatively homogenous workforce would set out to accomplish goals and earn credits or points that could be redeemed for the merchandise offering. Typically, in these award books, there were fewer choices available for lower point values. Once a person selected from the luxury items, with their remaining points participants would either redeem for things they really didn't want or lose the points.

"This created prize-point fatigue," Blabolil explained. "As a result, more choice was pursued, especially for lower values of awards. Enter into today's workplace the complexity of multiple generations, nationality, gender, age and overall diversity; culture shifts; constant introduction of new products and generation enhancements; the digital marketplace; and economic struggles associated with the 'great recession,' and you have the perfect storm for the need to increase choice and variety in the award mix."

The digital world alone claims large numbers of award options, he said. With the advent of technology like MP3 players, smartphones, tablets and laptops, people want music, books and videos downloaded to their devices. This constitutes millions of award options. Add in individual travel and now you have amplified the number once again. The number of luxury brand items in categories and lines of merchandise make up significantly less of the choice, once digital and travel awards are accounted for.

Nowadays, programs are simply looking to match the audience demographics and psychographics with the award mix, Blabolil continued. "Additionally," he said, "the lower the earning potential, the more choice participants desire, while the more earning potential the less amount of choice in high-end luxury awards is required."

This phenomenon of adding more and more rewards, "I call an endless buffet," explained Mary Luckey, director of client rewards strategy for Maritz Motivation Solutions in Fenton, Mo. When it's done without a real plan, she warned, this approach can actually be a detriment, and backfire.

"Let me explain," Luckey said. "One of the principals that we've seen in our research is that when human beings are confronted with too much choice, their brain literally shuts down."

Think about it. Have you ever stood in a store aisle in front of a particular product section where there are just too many choices? After staring at all the choices, you finally give up or just grab the next thing you see. Unless you know exactly what you want, it's just too difficult.

"That's what we've found in reward programs with too much choice," Luckey said.

Ultimately, it's a balancing act, suggested Brian Rivolta, senior vice president of sales and marketing for Incentive Concepts in Maryland Heights, Mo. "It's important to offer enough products across enough categories to make recipients feel like they are choosing that item they really want, while at the same time not offering so many choices that they feel like they are on the website of their favorite retail store. Make sure you have a representation of gender-specific items. But most of your core redeemers are going to be items with universal appeal."

At the heart of the reward strategies used by Maritz, is balance, Luckey said. "In a reward program, you need to offer a broad enough selection of rewards to make sure people find something meaningful—without creating clutter—it's a delicate balance. Recently we've been working with a client that had moved to the endless buffet model and found that their satisfaction scores were actually going down. People in the program were complaining that the site had so much choice it was confusing. So we're now working with them to come up with a reward strategy that provides that delicate balance.

"We also know," Luckey continued, "that human beings are both rational and emotional. Rewards are a perfect way to 'spark' positive emotions in people, they get excited, and that's what builds loyalty."