Last week I was at the grocery store going through the list of items my wife had created for me on Anylist. As I went down the list, relishing the satisfaction of checking off one thing after another, I got to the “Breakfast” section and saw that “Honey” was on there. This isn’t an item we use a lot, but I had a pretty good idea of where to find it. So, I went to the aisle with the syrups and pancake mix, expecting to find two or three options from which to choose. After all, how many different types of honey could there be?
As it turns out, the answer is “a lot.” As in four shelves’ worth. There’s organic honey and non-organic honey, generic store-brand honey and exotic boutique honey, honey in a plastic tub or honey in a glass jar. There’s raw honey, orange blossom honey, clover honey, acacia honey, and wildflower honey. There’s even pure bee honey, which confused me, since I had assumed all honey was purely made by bees.
I suddenly felt overwhelmed by the amount of choices I had in front me. Sure, I couldn’t remember the last time I had actually bought honey—but still, should I have known the difference between these vaguely different honey types? It must be common knowledge, since I didn’t see a throng of other husbands gathered in front of the honey section with bewildered looks on their faces. There was definitely something wrong with me.
I thought about just grabbing one, either the cheapest one on the shelf or the most expensive. “Go organic,” I told myself. “Always go organic.” But the organic honey wasn’t the most expensive like it should have been, so I was naturally suspicious. “Something’s just not right here,” I thought. I considered texting my wife and asking her to lay out in minute detail exactly which type of honey she was expecting me to buy. But somehow this felt like a monumental loss the likes of which I might not easily recover from.
Then I did something I’m not too proud of: without really looking, I randomly just grabbed a jar, not even sure that it was honey I had pulled off the shelf as opposed to syrup. At the time I didn’t know why I did this, why I would forsake my duty as a modern-day hunter and make a choice blindly and without thinking. As someone who prides himself on being a thought leader and a logical problem solver, I did not understand how I could have been so easily defeated by something as simple and banal as a condiment.
But now, after putting a lot of thought into it, I realize that what I had succumbed to was simply the Paradox of Choice. This is a theory that argues that the more choices we have in front of us, the greater our uncertainty about those choices, and the more likely we are as a result of that uncertainty to end up not making a choice at all.
It’s why we sometimes can’t find anything to watch on Netflix despite the more than 5,000 titles available to us. It’s why we have trouble coming up with a caption for our Instagram post, and so end up posting nothing for that day. It’s also why I’ve started and stopped reading a half dozen books over the last month, even though I have a hundred perfectly interesting titles of varying genres sitting on my bookshelf.
It turns out that as our potential choices increase, so too does our pickiness about those choices, and as we become pickier, searching for the absolute perfect choice among many, we ultimately find ourselves dissatisfied with them all. Thus, pickiness ultimately reveals itself to be the mother of mental paralysis.
However, there’s a silver lining: if we accept this idea that “choice overload” can actually be detrimental to our mental processes and general happiness, then the inverse should also hold true: that by limiting the number of choices we have in front of us, we can improve those same processes and elevate our happiness. In other words, in some cases, less can actually mean more.
The Need to Segment
Nowhere is this point more salient than with incentive rewards catalogs. As distribution becomes more streamlined and the number of potential choices participants face grows exponentially, there’s an opportunity to become more creative and more targeted with the choices we can offer.
For example, we’re seeing an increased emphasis on segmentation and personalization that takes the incentive experience beyond the basic transaction we have with our audiences. Instead, we want to look for the things that make them people, not just customers, employees, partners, or sales personnel.
As we begin to reimagine this relationship, a good place to begin is building a participant persona comprised of personal traits like age, income, topical interests and other key demographics figures. Obviously, this will require a greater focus on data collection, be it through surveys, buying behaviors, or relationships with salespeople. But this extra effort will make a difference when it comes to offering not just good rewards, but the right rewards.
Other important considerations in the segmentation/personalization process are firmographics and earning potential. The latter in particular is essential, in that a failure to account for it can severely hinder the success of any reward offering.
If your reward catalog is full of amazing rewards, but the average cost is 10,000 points and the average earning potential is only 6,000, it doesn’t matter if you offer 5 rewards or 5,000: your rewards are unachievable and thus demotivating. Therefore, it’s essential to understand your participants’ earning potential, and to model your earning structure around this.
Marketing and Promotion
In addition to helping us provide more targeted—and thus more motivating—rewards, having all of this knowledge and participant data at our fingertips also allows us to produce better marketing material around the awards. We can create more compelling promotional themes, with subtle but impactful changes to messaging that relate specifically to individual audience segments.
For example, instead of a “Holiday Gifts” theme, which is broad and unfocused, you could instead say “Tech Bundles for Tech Lovers” or “Make Your Musician Merry.” Narrowing your marketing focus in this way will not only appeal more to a tech- or music-loving audience, but it also will communicate to this group that you’re thinking of them as people and not dollar signs or figures on a balance sheet.
As you roll out these promotions, it’s also important to track their success after their launch relative to each other. Recording which promotions and product types do best can give you more data and ideas on what will work in the future, leading to even more targeted and effective marketing.
Keep in mind, too, that even if you decide to go with a large reward catalog, you can still promote it in a highly segmented and personalized way. Just make sure you do this in a way that will help drive your campaigns towards specific themes and reward options that are relevant to your audiences.
Shopping vs. Buying
What’s the difference between shopping and buying? When we go to an outlet or mall and tell people we’re “going shopping,” generally we mean that we don’t know precisely what we’re looking for, but we have an idea of what kinds of products are available to us and how much we’re willing to spend.
On the other hand, when we search on Amazon, we’re usually there with a specific product in mind. We know we’ll be able to find whatever it is we’re looking for—it’s just a matter of finding the precise model at the right price. In this case, the difference between these two examples—and between shopping and buying—is intent. Do we know what we’re looking for, and can we expect to find it with relative ease?
When it comes to rewards, a good catalog should have aspects of both the shopping and buying experiences. On top of browsing for things that might interest them, your participants should also be able to use the narrowed focus provided by your promotional marketing to search with confidence and identify particular rewards that they know they want.
Creating Brand Affinity
Finally, when selecting the right rewards for our participants, the goal should be to create an emotional connection between them and our brand. This might sound strange, since we usually think of marketing and great customer service as the clear ways to achieve this connection. However, our rewards can also function strategically in this manner if all of the above factors come together in just the right way.
It’s important to note that we don’t necessarily have to provide the exact perfect reward for each and every individual participant. Instead, the key is to establish in their minds the difference between what they need and what they want. For example, a good reward should be something that participants probably could afford, but really just can’t justify buying. Were they to buy this reward themselves, they might feel regret or guilt about spending their hard-earned money on something that’s most likely superfluous in their daily lives.
In other words, you want your rewards to be impractical without the reward catalog, but aspirational with it. This could be something like a new iPhone, where your current one still technically works, but it’s missing all the bells and whistles of the newest release. Or it might be a trip to the Caribbean with the family, which you could probably afford, sure, but which you also can’t find a way to legitimize paying for when that same money could be used toward your kids’ college fund.
Purchased through an incentive program, however, these kinds of rewards help your participants think to themselves, “I get to treat myself without having to consult the logical side of my brain or take money away from my day-to-day family expenses.”
It’s in this subtle area, the area between what participants want and yet can’t really justify getting for themselves, that brand affinity truly thrives. By providing the opportunity (and the excuse) for your participants to buy what would otherwise have been a splurge, you are fulfilling an intrinsic desire that leads to a thought of, “I might not have bought this myself, but Company X helped me.”
Along these lines, you want to provide options that have a long shelf life in your participants’ minds. These are things that participants’ will be proud to have, and thus will be more willing to link back to your company’s brand. Luxury items are a great example of this, because while they are expensive, the participant isn’t technically paying for them, and so can own them guilt-free. Experiential rewards are also hot commodities these days, as they’re both extremely motivating and highly memorable.
I won’t go so far as to say that too many rewards in your catalog will cause your participants to close their eyes and select a reward they’re ultimately unhappy with, but let’s agree that we can’t rule it out. Because while we’re trained as Americans to believe that more freedom means more choices, and more choices means more of what we want, the truth is that in terms of our overall happiness, sometimes more can mean less, and less can mean more. When fewer options are available to us, we’re able to eliminate a lot of the excess noise surrounding our decision-making and really focus in on those choices that we’ll be happy with.
In the case of rewards and reward catalogs, this means doing a better job of understanding who is looking to achieve them, and consequently being more specific with what they can achieve. Because the last thing you want is for your participants to take a look at your catalog and its one million reward offerings and say to themselves with a sigh, “I can’t really find anything I like, so I guess I’ll just get . . .”