SMM Gift Supplement J/A 2012 : Page 3
gift cards “ It’s all about whether that incentive is going to drive the action you want.” But he also believes enough in the motivational muscle of gift cards to use them when larger incentives are appropriate. Besides its in-house telemarketing sales team, MyBinding. com, resellers of binding machines and related office supplies, has a team of field sales reps that call on businesses in person and typically make larger sales. These customers are government entities, architects, law firms and other businesses that frequently print (and need to bind) long reports. Some binding machines the company sells cost several thousand dollars. Occasionally, MyBinding.com gets exclusive rights to sell a new, high-end binding machine before competitors have access to it in exchange for a guarantee to sell a minimum number of the machines. McRitchie says he often puts a “bounty” on that model in the form of a $50 or $100 gift card for each sale and he watches the sales team hustle after sales. “It’s all about whether that incentive is going to drive the action you want,” he says. “We had a monthlong offer to get a gift card with every sale once and boy, did they sell that machine! One person got $900 in gift cards,” he says. Remember to measure ROI Ben Dolan, vice president of marketing at Partner Professional Staffing, says gift cards as recognition items have become a popular part of the corporate culture at the Cincinnati-based recruitment firm, which specializes in placing professionals in the health care, information technology and finance industries. The company has enjoyed tremendous growth, even during the skittish economy of the past few years. At a weekly meeting of the in-house continued on page 22 Why gift cards trump cash as a motivator While it’s true that managers and HR professionals like recognizing stellar performance with gift cards because they are easy to administer, they would be shooting themselves in the foot if the gift cards weren’t desired by the employees they recognize. Not to worry. A 2011 study by the Incentive Research Foundation in which 170 participants responded showed that, given the choice between cash and prepaid gift cards, prepaid cards are preferred by a ratio of almost 7 to 1. In fact, almost half of the respondents consider prepaid gift cards to be the best incentive of all. “We found that reward recipients are more likely to mentally classify prepaid cards as guilt-free spending versus cash,” explains IRF President Melissa Van Dyke. “They’re more likely to add the value of that prepaid gift card to their monthly budget, rather than simply replace it, as they do with cash.” Nearly half of the reward and recognition program planners surveyed say that, dollar for dollar, prepaid cards are the most effective reward available, and more than 75 percent believe they are among the most effective of all rewards – especially in driving loyalty and engagement. Do you like receiving gift cards? Other 5.08% They are the best of all gifts/rewards 44.07% I end up not using them 5.93% They are a poor gift/reward 9.32% Rather have the cash 8.47% They are a good gift/reward 27.12% IRF/IGCC Survey of Gift Card Recipients, 2012 SALES AND MARKETING .COM JUL/AUG 2012 3
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