I recently attended the PPAI Expo in Las Vegas and was amazed at how big the show has become. It seems to grow each time I attend, and adds new ideas and concepts that bring value to both exhibitors and attendees. A rare feat these days with big tradeshows. I missed the 2018 Expo, so it was great to get back, see all of the new and exciting products, and reconnect with many industry friends.
During one day of my seemingly endless walking, I found myself in a conversation, catching up with a friend that I hadn’t seen in 2 or 3 years. We talked about the usual things, “so great to see you”, “how’s the family”, “how’s business”, etc. When he asked how things were going at Summit, I eagerly began telling him about all of the exciting things we’ve been working on. I told him about our recognition and engagement software, LuME, and Rewards xChange, our innovative Retail Rewards portal. Interested in Rewards xChange, he asked me some questions about how our model worked.The conversation soon evolved to the topic of Trophy Value.
Rewards xChange, you see, is a Visa-backed rewards portal that allows participants to redeem points earned in employee recognit ion, incentive, and loyalty programs directly at retail. As a hard core premium brand guy, my friend asked how Rewards xChange brought “Trophy Value” to the award experience. As I explained my position to him, it got me thinking, “With the unprecedented change that our industry has seen in the past 10 -15 years, does the concept of Trophy Value still apply? If so, does it still have the same relevance that it did back in the day when gift cards were new, and premium product ruled the incentive and recognition world?”.
Trophy Value Then
The definition of Trophy Value, in its traditional sense, encompasses the theory that when a non-cash merchandise award, such as a TV, a watch, or a kitchen appliance, the recipient has a connection that evokes emotion every time they use, see or talk to their friends about the award; “I won that from my employer for being the #1 sales person”. The perceived value of the award often exceeds the actual cost because it is viewed by the recipient as a “trophy” that they won. It also increases the perceived value of the company’s brand that gave it to them; “What a great company to work for. They must really value their employee’s”. Trophy Value.
The traditional theory also states that cash awards do not invoke this same emotion because the recipient can spend it however they want, and studies show they usually spend it on needs rather than wants. If I use the cash to put gas in my car, I’m not associating a full tank of gas with the great job I did to earn it. Nor do I think, “Wow, how nice of my employer to fill my gas tank”. No Trophy Value.
So how has time changed the concept of Trophy Value? Or has it? Gift cards or prepaid cards, closed-loop or open-loop, gift cards are here to stay, and premium merchandise no longer rules the world.
Trophy Value Now
I believe that trophy value is still an important factor when considering what awards to choose for your program. However, I also believe that the concept of trophy value has changed, just as the way we deliver incentive and recognition programs and the expectations of participants has changed.
One thing that has change is the terminology. What the industry once referred to as trophy value is now described with words like Evaluability, Separability, and Social Reinforcement. The Incentive Research Foundation* describes these terms, in part, as:
- Evaluability – In simple terms, evaluability means that non-cash awards are more difficult to put a value on vs. cash. Because they have greater ambiguity, they can be attributed a higher perceived value than the cash equivalent of the same item.
- Separability – This is a way that people mentally compartmentalize. In terms of incentive and recognition awards, this refers to the idea that non-cash awards are compartmentalized separately from cash awards. Cash is often compartmentalized in the same bucket as salary and compensation, while non-cash awards are viewed as separate, which makes them more memorable and the performance to earn the award stand out.
- Social Reinforcement – Receiving acknowledgement from one’s social group, such as peers, managers, family and friends. A non-cash incentive can be seen, shared, and acknowledged by others. Most often, people do not share their salary or cash awards with peers or friends, and are uncomfortable talking about it in a social setting.
What has also evolved is the way gift cards are viewed. In previous years, gift cards were viewed by some in the incentive and recognition industry as the same as cash. However, as the gift card segment has matured, that perception is changing. As gift cards continue to be the non-cash incentive that participants choose most often, they are creating an extended version of trophy value.
Gift cards empower the recipient with greater choice of award. They can shop where they want, get the exact item they want, and get the best price. They can take advantage of retail sales and discounts to get more value, and can use in conjunction with retailer loyalty programs and coupons. All which gives the award more power to influence desired behaviors.
The concept of Trophy Value is still a critical intrinsic motivator in driving behavior and performance, and one that will likely always be relevant. While the definition may have changed, the principles remain the same; trophy value positively impacts behavior and performance.
By Donna Chrobak