One of the biggest changes in the 21st century is the way in which companies are valued. In the past, company value was calculated based on hard assets such as land, buildings, equipment, products/inventory and factories, etc. Today, over 80% of a company’s value is tied to less tangible factors, such as brand value, customer data, relationships, leadership quality, algorithms and more. Harvard Business Review now believes that competitive advantage goes to companies that manage human capital effectively rather than companies that manage finances effectively.
For years we’ve understood that tangible merchandise rewards are the most effective method to motivate employee performance improvement, and the latest Trend report from The Incentive Research Foundation confirms it yet again. This is the fifth straight year that the rewards and recognition market has shown 20-30% growth in experience-related rewards including merchandise – and the more meaningful the merchandise reward, the more effective.
It should have been easy to see, but somehow the waters were muddied decades ago and they are just now clearing up. It is well understood that placing an incentive at the right place at the right time is a great method of creating positive behavior change. Anyone working at OSHA would know this (as would any other American) in that we all participate in a wide variety of customer loyalty programs that incent us and affect our behavior. As a result of doing so, we get rewarded for our loyalty to brands we already believe in, and everyone wins.
Incentives… we all want them. From earning $.05 cents off a gallon of gas after spending $100 dollars food shopping to receiving 50,000 sky miles for signing up for that “Free” credit card on a flight to Vegas We all love when we think we are getting something for “free”. But are these incentives really “free”? What is the true cost of 50,000 sky miles or $.05 cents off a gallon of gas cost the promoting company. From the companies perspective, the cost associated with the discount, miles, or points pale in comparison to the objective to drive and change our behavior.
When sales and marketing leaders are looking to boost sales, discounts and buy-one-get-one-free (BOGO) offers often come to mind. While these may be effective some of the time, they are expensive and cut into profit margins. A gift-with-purchase program is affordable and can boost your sales.