Part 3: Catalog Providers Hate Gift Cards Because Your Employees Love Them!

Continuing my look at why employees love gift cards in a reward program where we saw how if you introduce gift cards into an old catalog selection – within weeks 90-99% of employees will select the gift cards! That’s exactly why catalog providers hate them, because your employees love them!

Let’s look at one more of the reasons employees play back to us as to why they love gift cards. Customer employees tell us…

“I love that they are LOCAL to where I live, not one size fits all”.


I know it’s hard for program managers to evaluate which are the best rewards to offer employees, so I shall try and keep the comparison on this employee reason as straightforward as I can.

Basically, I recommend you think about recognition program providers as behavior consultants, technology solution providers and reward vendors. That’s as true of us as it is of our competitors. A good way to look at classic merchandise catalog reward vendors is to think of them as a store, with a storefront called, say, “Incentive Boulevard.” Behind this storefront they are offering their merchandise items that they have purchased, sourced, and stocked in their warehouse facility, fork lift drivers and all! They are in effect merchants, and some have even got manufacturing facilities where they make some of the items they sell (e.g., jewelry). This model has certain built-in characteristics:

• Stock of items available is limited to their warehouse capacity.
• Stock rotates about 3-4 times a year.
• Their buyer team of 2-3 people is selecting what items to stock.
• Cultural sensitivity is covered by merchandise groupings for like-minded regions.
• Merchandise items are shipped by courier around the globe.

The most common descriptor I hear from employees for this approach is the “One Size Fits All Catalog”. Much like that T-shirt we’ve all picked up at trade shows that is just not meant to fit you!

Now, compare this traditional catalog approach to our gift card experience delivery model. Yes we are reward vendors too, but the key difference is that we are not selling our merchandise – rather we are opening the way for your employees to go select their reward from an enormous portfolio of famous-name merchants that are respected brands in every country -- famous department stores, restaurant and cinema chains, sports stores, travel providers, local online retailers, and local charities among other all-local choices, too. So employees choose LOCALLY an aspirational reward – at what I call street level - from the millions of items suited to their local culture. Let’s compare this model to the points bulleted earlier:

• Stock of items available also limited to the items in stock. But how limited in stock is Macy’s or Kohl’s, Marriott or Travelocity, Pottery Barn or Amazon.com – just to name a few. Globally, stock exceeds 20 million possible reward experience choices.
• Stock rotates every week.
• The buyers are professionals catering to the needs of real consumer populations locally. These local buyers know what an employee in Beijing wants, because they are LOCAL citizens in China, and not based in Cincinnati!
• Cultural sensitivity is built-in and ensured in ALL countries, as merchants are LOCAL.
• Bulky items are NOT shipped, but locally selected, locally collected, and locally consumed.

My advice – THINK GLOBAL, BUT THANK LOCAL. By adopting a local-level reward approach you show respect for the local employee, respect for their local culture and respect for their ability to choose a reward that is truly motivating to them – locally.

Now what is more motivating than respect?

For those just joining the GloboBlog community today, these are the links for the past related posts in this series:

Part 1: Catalog Providers Hate Gift Cards because Your Employees Love Them

Part 2: “I love REAL CHOICE, not pretend choice.”

2 comment(s):

At May 25, 2010 1:36 PM, lkath198 said...

That is the beauty of gift cards in incentive programs – they are exponential in the way they open up the breadth of selections for the reward recipient. The selection is limitless among apparel, home goods, restaurants, theaters, travel, and the entertainment world, to name a few. A program limited to merchandise does not compare. The gift card reward is also reinforced multiple times when the card is selected and then ‘spent’ at the given merchant, followed by the actual experience of the recipient using what the gift card actually makes available. This is the ‘trophy’ value highly regarded by proponents of merchandise based loyalty programs. And especially if you can drill down and appeal to someone at the local level ….it is a win-win for all!

At May 25, 2010 1:39 PM, Derek Irvine said...

I couldn't have put it better myself, lkath198. Thanks for chiming in!