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The New Role of Rewards and Recognition

Research suggests that one’s level of engagement with an organization is based on feeling a sense of support (the company is there to help them); appreciation (the company values their contribution), and even fun (the company is “a great place to work”).

Engagement is based on inspiring people over the long term, not just changing their behavior month to month. That’s why engagement involves so many issues, including leadership, communications, technology, training, etc. Rewards and recognition, whether merchandise or travel, provide the best results when used – not as carrots – but as a  communications medium to get attention, convey a message and build closer relationships over time. Rewards, when used properly, are a vital part of the process of establishing lasting ties between an organization and the people critical to its success.

Building Relationships

Recognizing the major shift of emphasis away from mass marketing toward targeted marketing made possible by the Internet, companies increasingly recognize the need to identify and build relationships with the people most likely to buy and contribute to organizational results. There is almost nothing more engaging than a carefully selected reward or gift well suited to the recipient and commensurate with his or her contribution, as a customer, channel partner, or employee.  Anyone who has taken their family on a trip abroad because of a frequent flyer or credit card rewards program, or who has received an exciting incentive award delivered to the home for the entire family to enjoy for years to come, understands the difference between engagement generated by advertising and engagement fostered by the right award.

Customer relationship management technology and permission-based electronic communications have made it possible for almost any size company to inexpensively target market to prospects and easily track the results. Anyone who has built an effective e-mail database of serious prospects and who has implemented an ongoing communications plan knows the benefits of sending out an e-mail blast one day, and picking up e-mail or phone leads starting that very same day. If you want to get more people to sign up or read those communications, remain engaged and refer your company to others, rewards and promotions become a vital part of the engagement mix.

Under today’s model, rewards and recognition are presented as expressions of support and appreciation, not as carrots. People are asked to be loyal because of the value offered by the organization, not because of the reward. Instead, the reward is used to draw attention to the values and to reinforce them by associating them with a tangible expression of appreciation.

A Fresh Look

Today’s focus on one-to-one marketing and engagement invites a fresh look at how to use noncash rewards. When used as carrots, the goal is to give people ultimate choice. When used to engage, rewards are selected more carefully to demonstrate an organization’s desire to appeal to people on a one-to-one basis. In the sweepstakes and contest world, marketers have long recognized the need to make very careful “prize” selections based on the message, objectives and audience. Rarely does one see a catalog offered in a sweepstakes or contest, because the marketer is trying to make a very specific point to a very specific audience. This same approach should apply to all engagement strategies.

The more an organization can demonstrate its understanding of each person in its audience, the more impact it will have when it comes to long-term engagement.

With one-to-one marketing, rewards are, in fact, a medium. The ones you select make a big statement about your organization and your understanding of your audience. The brand you select in your rewards program, or the way you place your brand on another product, as well as the type of product or service you use, makes as big a statement about your company as the creative component of an advertising campaign. In fact, one can argue it makes a bigger statement, because it’s aimed precisely at a customer, channel partner, salesperson, or other employee critical to business success who will potentially associate your organization with that reward for years to come.

It’s Not About Carrots

In this new world of target marketing, the best awards are more personal, targeted, or aspirational. Instead of a catalog that people get to choose from after they win, some companies now offer very specific rewards that people can select in advance and strive for. Instead of building a catalog of unlimited choice, the program might have more limited offering to make a specific communications point with a specific audience. Remember, this isn’t about carrots, it’s about communications and engagement. Conveying the message, promoting desired behaviors and keeping people involved are the key goals in the new world of one-to-one marketing.

For years, the incentive industry has debated the issue of the relative motivational value of cash and noncash rewards for use as carrots. When it comes to engaging people, there is little debate: If you want to convey a message, get attention and build relationships, nothing can top the delivery into one’s home a gift of merchandise or travel carefully selected to express genuine appreciation for loyalty and accomplishment.

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