Tangible Awards Significantly Outperform Cash Awards and Incentives

  • Oct 28, 2010

merchandise vs. cash rewards

It’s the old cash vs. tangible award decision that companies have to make when designing an incentive program.

When you ask employees what type of awards they would prefer, they will almost invariably answer “cash”.

However, when tested side-by-side, tangible gift rewards (including merchandise and travel) significantly outperform cash and cash equivalents (debit cards and gift cards).

Here are the results of several recent studies which tested the two types of awards … and the results may surprise you.

AUDIENCE BEHAVIOR CASH NON-CASH %
Auto Dealers Sales Lift 1.2% 8.2% +583%
Tire Mfg/Dealer Sales Reps Sales Increase 22% 32.5% +45%
Auto Dealer/Sales Manager Performance over Objective 9.5% 18.8% +98%
Financial Firm Sales Mgr Goal Attainment 29.9% 58.2% +95%
Window Mfg Dealer Rep Avg. Revenue Per Rep $51,560 $66,540 +29%
Financial Institution Revenue to Expense Ratio 131:1 165:1 +26%
Retail Sales Reps Performance vs. Objectives 76.1% 85.3% +26%
Univ. of Chicago Study Performance Lift 14.6% 38.6% +164%
Columbia University Study Participation Rate 65% 85% +31%
MIT Study Participation rate 48% 64% +33%

Just because your employees say they prefer something, does not always mean it is in the best interest of your incentive program.

Using tangible gifts force employees to shoot for a complete category level or point value, so if they are trying to earn a big ticket item, they cannot compromise and settle for half of one. They must work fully toward earning that prize.

Also, tangible gifts go toward “dream purchases” or other items that an employee would not ordinarily purchase— without any guilt. Award dollars being used to purchase groceries or every day items reduces the impact of the reward when the employee is asked to recall it a short time later.

Tangible rewards can be promoted – with results being listed and sent to all participants, whereby cash is very personal and does not have the “brag value”.

Promoting a tangible gift can also involve family participation, which increases the success of any incentive program.

Although cash awards are the simplest to develop and launch, as you can see, results prove that tangible awards far outperform cash awards.

Happy promoting.


  • Category: Incentive Programs
  • Tags: awards for incentives, best awards for incentive programs, cash vs. gifts, do cash awards perform beter than merchandise or gifts, merchandise or gifts vs. cash, tangible awards outperform cash, what