The ultimate win-win

When it comes to promotions, the lure of the big cash prize is not always the best way to win customer – or staff – loyalty. A subtler mix of aspirational jackpot prizes and smaller, more easily attainable awards can work wonders, writes Paul Gander

Consumers were drawn to the National Lottery in their droves when the first high-value prizes materialised, but have turned away from it in ever larger numbers as the chances of a big win have proved too slim. Unlike brand promotions, the lottery has had to sustain consumer interest over a period of years rather than weeks, and new games such as Thunderball have not reversed the fall in interest.

Whether targeting consumers or staff, for brands and companies, high-value prizes clearly have the greatest immediate appeal. But the decline of the lottery shows that retaining a promotion’s credibility among those taking part is also of vital importance – as is the level of enthusiasm generated by the actual mechanics of the promotion.

In these areas, easier access to smaller prizes can play a significant role. And, of course, with internal company promotions, there will be different ways of motivating staff other than just by offering a big individual prize.

Consumers have come to expect attention-grabbing high-value prizes in promotions from the bigger packaged goods brands. But the type of individual value offered will depend largely on the company’s objective, says promotional risk management specialist PIMS-SCA. If the aim is to retain current customers rather than recruit new ones, smaller prizes could work well to generate loyalty.

Most often, though, clients will opt for a sliding scale of lowerand higher-value items, says managing director Mark Kimber. The company worked with Cadbury on its recent SMS-based promotion, where codes on sweets wrappers could be returned as text messages.

In this instance, the prizes ranged from music equipment up to substantial cash sums. “You want to be able to shout about the bigger prizes, but you also need to gain credibility by having winners,” says Kimber.

When a campaign is spread over two or three months, as in the case of Cadbury’s, more accessible prizes together with strong communications mean that consumer interest can be sustained over the entire period, he adds.

It is not only brands that rely on consumer belief; risk management companies also need their own clients to “believe”. PIMS-SCA was protecting thedailydraw.com website when it gave Europe its first online jackpot win of &£1m.

“I was delighted to pay out because it demonstrated our credibility,” Kimber maintains.

But usually, the required motivational edge can be achieved without signing a fat cheque. For staff incentives, says Kimber, the issue will often be how to make a small budget stretch a long way.

“The amount that a client can give away will vary, but [if too small] it may come across as rather a bland offer. The company may need to pep it up a bit with some sort of aspirational prize, while not offering a guaranteed win,” he says. The company has some games of its own which pit the individual against progressively steeper odds using “Money Bags” or “Visible Vaults”. In both cases, the highest-value prizes are tantalisingly visible, but in fact kept at a distance by the laws of probability.

In both these cases, quite apart from the value or nature of the prizes on offer, it is the mechanic of the game that motivates individuals and helps to generate excitement. And just as experts stress the importance of tailoring the prize to the audience, it is equally important to match the mechanic to the type of person you want to attract.

The Cadbury promotion was well-suited to technology-obsessed children and teenagers, and the same was true of an online auction by Coca-Cola.

The promotion began with the tried-and-tested system of collecting ring-pulls, but the monetary value that these translated as could be used to bid for a range of prizes online. Certainly, the wide range of prizes – some of which, such as holidays, were relatively high value – was a key feature of the game’s attraction. But, again, for the younger target consumers, the use of new technology and the important interactive component were big crowd-pullers.

Tech heads

Tim Scarff, marketing manager at Virgin Experience and Virgin Incentives, sees an additional draw for younger age groups in promotions of this complexity. “Young hi-tech communications wizards love to get their heads round this type of complicated game, so they can try ways of boosting their chances of winning,” he says.

Naturally, some promotions can be too complex, and run the risk of alienating consumers. For older age groups, simpler and more transparent offers are likely to be more appropriate. Ideally, guaranteed, lower-value prizes should be included in a promotion, says Scarff, possibly redeemable against proof of purchase. But this all-important credibility should be combined with the pull of high-visibility, high-value items.

This blend of big and small prizes can also work well in staff incentives. In its document The Guide to Motivation, Capital Incentives outlines the pros and cons points for rewards from cash and vouchers to merchandise and travel. It concludes: “To make rewards as motivational as possible, a variety of award types can be offered in a campaign, with vouchers being used to reward quarterly achievement, for example, and a prestigious travel award for overall top performers.”

For Virgin Incentives, this mix of one-off jackpot prizes and smaller prizes in the context of staff motivation is important for reasons other than interest and variety. “When there is only one winner, and especially when it is the same winner every time, the scheme can actually become demotivating and staff won’t bother with it anymore,” says Scarff.

Out of reach

It is possible for prizes to appear out of reach, even within the confines of a single company, and managers have to ensure this does not happen, he says, by offering more than one prize which is seen as being attainable. Virgin, like others, also recommends team awards.

For some, the whole logic of implementing incentive programmes can be questionable, unless supported by other motivational mechanics. Fe3 Consulting points out that although money is clearly a concern for all workers, it by no means comes top of the list of motivation for all.

Feeling wanted

Citing a recent Audit Commission investigation, partner Gary Saunders says: “There’s plenty of research into public sector organisations that shows that it’s not money which is a key motivator, but more the work itself, and the opportunity to make a difference.” In other sectors, such as science and research, peer recognition – possibly from outside the organisation – can be the most highly-valued “prize”.

Capital Incentives’ own online survey has confirmed, for the second year, that pay and promotion prospects are not the most significant incentives for staff. The company says: “Perhaps surprisingly, the most important motivator is being fairly treated and valued by the company. Even more surprisingly, a good relationship with colleagues is also considered to be more important than pay or job security.”

Saunders at Fe3 argues that, across all sectors, quality feedback has been shown to have a greater effect on staff performance than cash. Focusing on criteria other than easily quantifiable targets such as sales, may be good in itself for wider staff morale, but it can bring with it a host of other problems for those managers responsible for the incentive scheme. “How will you measure success? It’s important that everyone understands what ‘success’ means,” he says. “Training for managers implementing the programme needs to be put in place to ensure equity and at least attempt to reduce possible bias.”

Parameters such as customer satisfaction may be not only tricky to measure but also even more difficult to attribute to specific members of a team. According to Fe3, academic research has shown that managers will often reward one aspect of staff performance while hoping to reinforce a completely different one. A company might hope, for instance, that sales incentives will have a number of positive knock-on effects; but they may simply make the team more sales-oriented at the expense of customer focus.

Just a little thought

If your aim is to raise performance levels for those who are producing average results, it is not simply the number and value of prizes that requires attention. A more thoughtful approach to the criteria behind an award can do wonders for improving performance on a broad front, Capital Incentives argues.

The company recommends smaller, more frequent prizes for “most improved” and “employee of the month” categories. Even in a sales environment, criteria can shift to the greatest number of orders taken or the highest average order value.

Those offering advice on both consumer promotions and staff incentives stress the importance of communications. For consumers, this helps to maintain interest in the campaign and demonstrate credibility by highlighting awards. For staff, it underlines the all-important element of peer recognition and maintains the team’s awareness of targets.

There may be an even greater overlap between research into staff incentives and the motivation behind successful consumer promotions. After all, some of the longest-running promotions have been those such as Walkers’ Books for Schools, where group objectives, co-operation and smaller individual prizes are substituted for individual acquisitiveness and larger awards.

The carrot of a dream holiday in the sun is likely to be dangled by many brands for a long time to come, but there must be a realisation on the high street that more imaginative promotions, based less on monetary values and more on peer-group dynamics, can reap rich rewards.

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