Channel Incentives Guide: Part 3

Find the right rewardsIn the second part of our Channel Incentive Guide we looked at channel incentive programme considerations, objectives and identifying your participants. In this third part of our series on channel incentives, we look at selecting rewards, cash vs non-cash rewards and communication.


1. Selecting rewards

The selection of incentive rewards is an important issue and critical to the success of your campaign. When properly designed, channel incentive programmes will change behaviour and boost business results, and that means selecting the right reward.

Your choice of reward will depend on your participants and the objectives of your channel incentive programme. However, as you will be rewarding different people who will have different tastes, giving people choice is crucial.

The most popular types of incentive rewards are:

  • Vouchers/Gift Cards
  • Merchandise selected from a printed or online catalogue
  • Meals at fine restaurants
  • Experience days
  • Pamper days
  • Travel and holidays
  • Pre-paid cards

If you are in doubt about which type of reward would suit your participants then ask them by conducting a short survey to find out what would really appeal most.


2. Cash vs non-cash rewards

If you were to survey a group of programme participants about which reward they want then the answer would usually be cash. A study conducted by at Wichita State University under the auspices of the International Association for Research in Economic Psychology found that when given a choice between cash, a cruise or a HDTV worth the same amount people will choose cash 63% of the time.

Yet studies show that non-cash rewards, such as merchandise, travel or exclusive privileges, are more likely to make a channel incentive campaign far more compelling, more cost-effective and deliver better results. That’s is because:

  • Cash has little emotional value
  • The emotional elements of non-cash rewards afford them higher perceived value
  • Cash rewards can get mixed in with income and spent on bills or other forgotten necessities
  • Luxury, non-cash rewards don’t need to be justified or be practical
  • It is more acceptable to show off, discuss and acknowledge non-cash rewards
  • Merchandise rewards are visible and create a lasting association and reinforcement of the achievement that earned the award
  • Cash can come to be considered an entitlement; non-cash rewards are seen as something extra, something earned for a particular achievement
  • Family members as well as the recipient often get to enjoy non-cash rewards, which increases motivation and engagement in the programme


However, there is a third way. Use a pre-paid card as an incentive. Pre-paid cards combine the best of both worlds by enabling vendors to load cash rewards onto an individual’s card, and then the individual can use the card to purchase their own guilt-free indulgence – giving them endless options to spend their hard earned reward. Some pre-paid cards also offer cashback when the card is used with a specific retailer which can add even further value to the reward.


3. Communication, communication, communication

The Importance Of CommunicationIt’s imperative to effectively communicate with your participants to ensure the success of your campaign. When designing your programme you should also plan in regular on-going communications as this will help keep your programme front of mind with your partners, which will improve its success.

Email is often used with channel partners and is a effective communication tool, but there will always remain a risk that your participants will not read the content or perhaps they will delete messages without opening them. Therefore the best strategy is to utilise a variety of channels. These could include:

  • Website/Online portal
  • In-person meetings
  • Direct mail/letters
  • Telephone calls
  • Text messaging/SMS
  • Social media
  • Video

As with any communications strategy it is important to understand how your target audience prefers to receive their communications so that you can target them effectively and make best use of your budget.


In the final part of our series on channel incentives we’ll look at key performance indicators, examples and best practice.


John Sylvester

John is responsible for the motivation division of p&mm ltd and a Director on the board of the IPM. Specialising in developing, implementing and directing many large scale staff motivation, recognition and employee communications programmes.
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