WHY MONEY ISN'T ALWAYS THE BEST INCENTIVE

Posted in Motivational Success Stories, Incentives and Rewards, Engagement Solutions, Attract customers, Sales promotion, Risk management plan, Behaviour change, Engage consumers, Promotional activities, Customer retention, Prize fulfilment, Customer loyalty programmes, Prize incentives

by Chris Baldwin on Apr 20, 2018 1:21:10 PM

It’s been said that money makes the world go around. But is it the best way to change customer behaviour?

Just how good is money? Ah, the million dollar question.

In today’s cash strapped world, it’s still true that money has a lot to answer for when creating compelling customer engagement.

Whether that’s offering a cash prize incentive to bring a sales promotion idea to life or offering money-back customer loyalty programmes – money has, and always will, talk.   

Yet, if you want to create behaviour change and engage consumers in a way that will really stop them in their tracks, you may need to look beyond cold, hard cash. It’s about creating emotional connections – and money can’t always do that.

Sodexo’s ‘Boost the Best Behaviours’ study is a fascinating journey into behavioural economics and one that’s well worth diving in to. Because when it comes to transforming behaviour and inspiring motivational success stories in marketing, it seems money is just a part of the equation.

In fact, if your consumer promotions have more of a transactional vibe and less feel-good factor, you may have a problem. And it’s all down to reciprocity.

Mr Gates apparently once said, “I can understand wanting to have a million dollars – it’s freedom. But once you get beyond that, I have to tell you, it’s the same hamburger.” We hear you, Bill. Point is, there’s only so much money can do. 

THE MONEY CAN'T BUY EXPERIENCE

Don’t get us wrong, no one’s about to knock the power of the cash competition or customer loyalty rewards like vouchers or money-off promotions.

It’s true that well thought out promotional activities often have big impact when cash incentives and rewards play a part. But poorly executed ones can backfire and make a business look inauthentic if the gifts, incentives and rewards are too blatant an attempt to get people’s business.  

This is where brand reciprocity comes into play- but more about that in a minute. 

Great sales promotions can create business success stories, no doubt. But how well they are executed can have a real impact on whether they keep the conversation going past the initial promotional activities. 

To get it right, it may be worth employing an engagement solutions company to bring your brand campaign to life. They can help marketers devise promotional mechanics that delight and engage consumers – whilst adhering to a risk management plan or prize fulfilment agreement.

Sometimes, brands go one step further and offer a money-can’t-buy sales promotion campaign like this one from Molson Coors. By offering customers a VIP experience worth £1,000, the Cobra beer brand was able to boost customer engagement and create a brand campaign with added clout. All customers had to do was enter a promotional on-pack code into a website to see if they were a lucky winner.

Wait, so we’re saying money can’t buy marketing happiness? Well, yes and no…

MARKET NORMS VERSUS SOCIAL NORMS

When it comes to human behaviour, it seems there are two important factors at play that marketers need to wise up to. 

Sodexo’s ‘Boost the Best Behaviours’ study talks about money being at the “root of market norms”. Dan Ariely, Professor of Behavioural Economics at Duke University explains “market norms” as those that are “sharp-edged, like wages, prices, rents, interest and costs and benefits”.

They’re in effect, transactional and business like. But the rules of the marketplace aren’t just business ones.

There are other norms too – ‘social norms’. And it’s these that can really drive consumer engagement, whether that’s to attract customers, boost customer retention or build on existing customer loyalty.

Dan Ariely says, “We live simultaneously in two different worlds – one where social norms prevail, and the other where market norms make the rules.”

It’s this warm, fuzzy world of ‘social norms’ that’s really interesting when seeking to change human behaviour – not the cold, hard world of business.

Fenja Ziegler, Lincoln University, explains, “Social norms, such as fairness and reciprocity, are deep, fundamental influences on our behaviour. Businesses that tap into the power of social norms can powerfully encourage behaviour that people want to follow."

Marketers would do well to listen up.

MARKET NORMS AREN’T ALWAYS AN INCENTIVE 

Here’s where people psychology gets really interesting. You can change customer behaviour but sometimes, you have to put ‘social norms’ ahead of ‘market norms’, even if that may feel counter-intuitive.

Take this example by Ariely about a childcare provider.

To try and make sure parents turned up on time to collect their kids, the organisation added a late fine. But it backfired spectacularly. Instead of being on time, parents were actually more likely to be late when there was money on the line.

Why? Because the business had brought in market norms.

Picking up their kids was now another transaction, so it became perfectly reasonable to be late because the time was paid for. 

The point is, where money is involved, behaviour change is harder to inflict. Money, it seems, isn’t everything.

As Sodexo’s report states, “Creating a sense of community, of caring and sharing, and all of the warm fuzziness that goes with it, is a much more powerful way to influence behaviour.”

And that’s where reciprocity comes into play.

WHAT IS RECIPROCITY AND WHY DOES IT MATTER?

Ever bought a Christmas present because someone bought you one? Or perhaps you’ve sponsored someone to do a challenge because they sponsored you? Maybe you’ve invited someone round because you went to theirs last time? These are all acts of reciprocity – one of the biggest social norms out there.

Reciprocity is the behaviour in which two people or groups of people give each other help and advantages. It plays to influencer marketing, tapping into the human sense of obligation to give back when something is received by another or a good turn has been done.

People respond because, well, it’s just good manners. So how does this affect brand loyalty?

Well, funny you should ask. It’s this very principle that’s a powerful tool when trying to attract customers, or develop deeper, more meaningful customer relationships.

As Sodexo’s ‘Boost the Best Behaviours’ study indicates, “the difference between reciprocity and a business exchange is that there’s no end-game. The original gift is just that, a gift, and the payback isn’t made clear.”

This debt of feeling can change behaviour and encourage consumers to engage with brands down the line.

It may not be an act that’s required straight away, but it will elicit a response at some stage. So, it’s best to be ready and waiting, making it as easy as possible for your customer to engage with you when the time comes. 

LESS TRANSACTION, MORE EMOTION

As Sodexo’s research shows, consumers crave authenticity. They want brands to move away from the harsh world of market norms and business transactions. Consumers want brands to dip their toe into the warm, fuzzy world of genuine social norms, and those who do, find loyal customers waiting with open arms.

Sam Fiorella, Partner at Sensei Marketing, says, “A relationship is a two-way street, and so any outreach that is obviously geared towards the purchase of more products, without a clear benefit to the end user’s personal situation, will drive short-term business benefit or cause it to be ignored altogether.”

Let’s look at that two-way street in more detail. Here are some simple steps to help you kick start a two-way conversation around your brand:

  • GET STUCK INTO SOCIAL MEDIA

    Turn up on all the usual social media platforms but make sure you respond to any direct questions or queries as soon as possible. This may require diverting marketing budget into new areas for your business, but it doesn’t have to cost the earth and the rewards will be well worth it. 
  • BUILD REVIEWS INTO YOUR BRAND OFFERINGS

If people like your brand and what it stands for, they’re more likely to leave reviews and feedback about your products and services. Make this as easy as possible and contact your customers after they make a purchase to see if they’d like to leave feedback. Channel your inner John Lewis.   

  • CONSIDER SPECIAL OFFERS JUST FOR SOCIAL MEDIA

The more authentic you are, the better. Think about building in special offers to your loyal social media base, to encourage greater interactions with clients and the prospect of greater shares and word of mouth engagement. Play nicely and your customers will respond.

“Giving away special offers to followers on social media is one of the most effective ways to create a need for reciprocity,” advises Christopher Dobbins from the New England School of Business.

We concur – but be wary. The more that consumers feel like your ‘gift’ is just a way of getting them to spend more, the less those all-important social norms count. Good design and copy with well thought through communication will help you to get the tone just right.

WAYS TO BUILD ON RECIPROCITY

If reciprocity is about good manners, then it’s time to be more human in your marketing approach. Keep that front of mind at all times and you’ll stand to win.

It can simply be a case of remembering that emotion has a role outside of ‘traditional’ advertising.

Motista’s CEO, Scott Magids, recommends three surprisingly simple steps for businesses looking to get emotional to engage consumers:

“First, inventory your existing market research and customer insight data. Second, analyse your best customers. Third, make the organisation’s commitment to emotional connection a key lever for growth.”

It seems it’s time to throw the cold approach to transactional marketing out with the bath water, and get with the baby instead. Well, you know, bring out your emotional side.

While prize incentives might be a good place to start, you need to keep the dialogue going and the smart marketing money is playing long ball – with no fouls or bad gamesmanship allowed.

Brand loyalty is entering the era of positive dialogue so if you play nicely, you’ll stand out as one of the good guys. Seek to create lasting conversations around ‘social norms’ and your brand will come across as authentic and likeable. Those all-important emotional connections will soon follow.

Start building lasting and meaningful conversations today. We promise you, you won’t look back.


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