Guest Column - November/December 2014

The Currency of Immediacy

E-Gift Cards Make Instant Recognition a Reality

By Brian Carr


Recognition and rewards must be timely to be effective. When an employee is recognized for a specific outcome or behavior right after the event has occurred, the action is reinforced and remembered. Delay too long, or fail to consistently recognize employees, and best efforts may not be achieved.

To quickly recognize employees in the moment, many companies incorporate spot awards or online points programs with e-card capabilities in their employee engagement programs. These tools give peers and managers a way to immediately tie the action to the reward.

We know that cash is not as effective as tangible awards, since the cash is quickly seen as part of compensation and has no anticipatory or residual effect. For this reason, most incentives, recognition and spot awards have centered on merchandise, which is usually selected from a printed or online catalog. Over the past decade, plastic gift cards have emerged as a very popular alternative. The options for merchandise or experiences using a closed or open card are nearly limitless. What's more, plastic gift cards have been popular around the holidays because they allow program winners to use the card as a gift without limiting choice for the recipient.

To quickly recognize employees in the moment, many companies incorporate spot awards or online points programs with e-card capabilities in their employee engagement programs.

In its report, "2012 B2B Gift Card Market Study" (www.usegiftcards.org/?page=B2BGiftCardStudy), the International Gift Card Council (IGCC), a strategic industry group of the Incentive Marketing Association, reported on research done in cooperation with the Incentive Research Foundation. The study revealed that as of 2012, more than half (52 percent) of U.S. businesses were using gift cards for incentive or recognition purposes. In addition, the report revealed that U.S. businesses spent $22.7 billion per year on gift cards.

Recently, however, the emergence of mobile technologies has changed the way everyone does business. In addition to home and work computers, according to the Pew Research Internet Project (www.pewinternet.org/fact-sheets/mobile-technology-fact-sheet/), 90 percent of American adults have a cell phone, and 58 percent have a smartphone. Some 63 percent of Americans use their phones for Internet access. We can assume that the vast majority of our program participants are capable of being online any time, at home, in the office or on the road.

This change in technology is creating a shift in the kind of gift cards selected by program participants. Reporting on the retail environment, CSPnet.com (www.cspnet.com/industry-news-analysis/technology/articles/holiday-digital-gift-cards-trending-overtake-physical) noted that "for the first time ever, the purchase of digital gift cards over the December 2013 holiday time frame outpaced physical cards 57 percent to 43 percent among Giftango card issuers."

This is consistent with our experience. In 2011, e-gift cards represented 14 percent of our gift card purchases.

That had increased to 33 percent in 2012, and 54 percent in 2013. In 2014, e-gift cards are still trending at more than 50 percent of total gift card purchases, with the critical holiday season still to come.

While the participant enjoys the immediate gratification of receiving recognition at work this afternoon and taking the family out to dinner tonight, those fulfilling gift cards benefit from a substantial reduction in time and overhead processing and shipping orders. What's more, the customer experience can actually be better with a digital solution. For example, if an e-gift card is not received or is lost, it can usually be resent by the customer service team, to the relief of program participants.

Responding to the increasing demand for digital solutions, Dittman Incentive Marketing is featuring an increasing number of e-gift card options. Currently, only one in four of the gift cards we feature are available in plastic only. Our top five sellers are all available as e-gift cards and outperform the next five sellers almost three to one. A brand that does not provide options for digital delivery may soon find itself unable to compete.

Some customization and co-branding is available in the digital gift card marketplace, but Rick Rubin of National Gift Card noted that within a program offering a wide array of gift cards, this might not be a viable option. Very few retailers are willing to allow this, he confirmed, out of concerns about control over their own brand. What is more reliably possible is a customized or branded e-mail with an e-gift card attachment.

Adding to the difficulty is what Rubin calls a "wild west" environment, where there is little standardization from one e-gift card to another, in terms of processing and technology. It may take adoption by some of the biggest retailers, such as Walmart or Best Buy, for significant customization to take root.

The end goal is always to find solutions that support clients' business strategies. By facilitating immediate rewards for rapid recognition, we are able to ensure that the conditions are right for success. Recognition and rewards in real time are an important way to engage employees. With an e-card to recognize an employee and an e-gift card as a reward for their efforts, the feedback can be almost instantaneous and will have maximum impact.



ABOUT THE AUTHOR
Since 2008, Brian Carr has been Director of Individual Awards for Dittman Incentive Marketing, managing both the Customer Care department and the merchandise, gift card, individual travel, and event tickets product lines. In this role, he has been responsible for continual enhancement and expansion of the company's product offerings into one of the broadest in the industry. His Customer Care team ensures total winner happiness for individual awards. For more information, visit www.dittmanincentives.com.