The secret to effective gift card reward programs

The key to effective behavioral motivation with gift card reward programs is to offer an incentive aligning with a desired behavior, as those you are working to motivate will be consciously or unconsciously be asking themselves whether or not the needed action is worth the reward.

If the action required to achieve the gift card reward is extensive and the incentive is small, it is unlikely desired results will be achieved. By the same token, if a sizeable incentive is offered for low effort, many will participate but monies will have been wasted.

In psychological terms, this concept is known as “expected utility.” Is the effort required by the customer to achieve a reward positively aligned to the reward itself? Organizations structuring customer incentive programs need to ask this question, “Does the value of the customer reward merit the requested customer behavior?” A promotional program is only successful when the targeted individuals assign value or importance to the incentive and the desired behavior is achieved. 

Below are 10 characteristics of effective gift card reward programs:

  1. EASY TO UNDERSTAND – both the behavior required to achieve the incentive and the incentive to be earned must be clear and easy to understand.
  2. ONE COMPLETED ACTION EARNS ONE SPECIFIC INCENTIVE – attaching one straightforward action to one specific incentive greatly improves clarity of the offer and perceived ability to earn the incentive. As a result of this clarity, program participation is markedly improved.
  3. INCENTIVE MUST BE ATTAINABLE – incentive programs that achieve positive ROI must motivate targeted individuals to take profitable action they likely would not have without the incentive in place. But, the required actions must be attainable. In other words, programs must require participants to stretch and behave in ways they otherwise would not have, but not to give up because the requirements are too high.
  4. INCENTIVE OPTIONS THAT APPEAL TO TARGET CUSTOMERS – while too much choice can be confusing to customers, choices tailored to your targeted customers improve program participation by providing a degree of control over what the customer is working to earn.
  5. DEFINE DESIRED/REQUIRED BEHAVIOR – specifically describe what is required to achieve the incentive. For instance, are 12 hotel night stays required to get a free night or must participants spend a specified amount of money?
  6. REMOVE OBSTACLES FOR PARTICIPATION – if participants must enroll in the program, make the enrollment process clear and easy. If program participation tracking is required along the way (proof of purchase, for example), make the process seamless.
  7. INCENTED BEHAVIOR MUST BE CONSISTENT WITH GOALS – directly align your goals with the behaviors you are incenting. This includes when the incentive will be received and precisely what must be done to earn the incentive.
  8. COMMUNICATION – the program, offer and incentive must be clearly communicated. For example, when the incentive will be received and precisely what must be done to earn the incentive.
  9. VALUE OF INCENTIVE ALIGNED WITH VALUE OF BEHAVIOR – the value of incentives must be aligned with the value of the required behaviors. If you ask too much for a small incentive, program participation will be low. Ask too little for a high value incentive and you will lose money.
  10. IMMEDIACY – although larger incentives for high value and/or prolonged behavior can work, smaller incentives for smaller actions frequently tend to be more effective for modifying behavior and typically is more cost effective.

Want to understand why gift card reward programs are the most effective incentive to change behaviors and achieve your goals? Request a copy of our most recent white paper today: The Power to Incent: Changing Behaviors to Achieve Your Goals.