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Rewarding Employees: Cash Or Things?

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A few years ago Goodyear Tire & Rubber Company decided to test whether cash or tangible goods were more successful in an effort to improve sales of a new line of Aquatred tires.

Their plan was simple and elegant: first they ranked their 60 retail districts according to previous sales, then divided them into two groups of equal performance and assigned one group to receive monetary incentives and the other to receive tangible incentives of a value equal to the first group.

 

The results were very interesting; it turned out that the tangible-reward group increased sales by 46% more than the monetary-reward group. They also improved in terms of the mix of products sold by 37%.

One explanation, and which may be a fairly good one, is that we can visualize tangible rewards (imagine yourself on a Hawaiian beach), which creates an emotional response. Money, on the other hand, is not accompanied by images as often (aside from maybe Scrooge McDuck swimming in piles of it), and lacks the emotional pull that tangible rewards have, so they’re less effective in motivating employees. I guess it’s called “cold, hard cash” rather than “future beach vacation cash” for a reason.

Marketing to clients is all about discovering their needs, and fulfilling them. Click To Tweet

And, as the Practice Builder Publishing mantra goes, “Your clients needs are never for your services. They are for something else. Something like increased store traffic, lower employee turnover, less product shrinkage or waste, or more free time.”

Your clients needs are never for your services. They are for something else. Click To Tweet
By identifying your clients needs, you can help them solve those needs. Whether it is something as simple as motivating employees, or something as complex as increased store traffic, once you know their true needs, and only when you know their true needs, you can help.



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kirks-sig

 

Kirk

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