The debate over which is best cash or non-cash incentives has been long running. Ask any sales person and they’ll almost always say they want a cash reward, but watch behavior and there is a strong case to be made for non-cash incentives. That case goes like this:
Lasting Trophy Value
Non-cash rewards provide lasting value for the sales person and the brand. Long after the incentive program is over, participants remember the brand every time they use their reward. This reinforces the behavior that earned the reward. When a sales person uses cash from their pocket they rarely associate it with the source.
It is also socially acceptable to discuss travel and merchandise sales incentives, but less acceptable to discuss cash earnings. Non-cash incentives therefore lend themselves better to social reinforcement, while cash does not.
Sales people can’t spend non-cash channel rewards on life’s necessities. Removing this choice allows participants to redeem luxury items or non-necessities guilt free.
Non-Cash Incentives Have Higher Perceived Value
Cash triggers a left brain response, which assigns a fixed dollar amount to a specific task. Non-cash incentives trigger a right brain response, which associates the value of using the award with the activity. The award becomes more than just the item’s cost, it’s value is the benefits received from its use.
No Confusion with Compensation
The sales channel won’t confuse non-cash rewards with compensation. Cash incentives tend to get viewed as part of the sales person’s overall compensation. Cash often becomes an entitlement or an expectation, this makes removing or reducing it tricky. Taking away a cash reward runs the risk of participants seeing the removal as a pay cut or take away.
Non-cash incentives are viewed as a recognition of extra effort or skill not as compensation, so there is less future risk when the channel program expires or changes.
Participants involved in a sales loyalty program are less vulnerable to new competitor’s programs. A sales person’s goal and/or equity within a program creates switching costs. These switching costs act as a barrier to them to adopting a new competitor’s program. This equity is hard to quantify and makes competitors work harder for the brand’s sales focus.
Promote Goal Setting
Participants identify a sales incentive they want at the beginning of the program and then work toward that goal throughout the program
Awards are viewed as achievements, not earnings, so the personal pride in meeting the goal far outshines the receipt of cash
Magnify the Benefit
Most channel rewards are for home and family, which draws a larger audience into the experience. Reward recipients also like to tell their extended network on social media, which magnifies the brand even further.
Non-cash incentive programs are highly promotable to the participant. There’s only so much you can say about cash, but it’s easy to create real dreams and wishes with tangible awards.
Brands can reinforce who won or earned non-cash rewards to other participants to drive future performance; however, promoting who earned cash tends to be received negatively.
Reinforce the Brand
A positive brand image is reinforced as participants associate it with the quality name brands of the awards
Because of their higher perceived value, as well as breakage, brands can obtain the same performance increase with less investment by using tangible awards, or achieve higher levels of performance with the same investment.
Cash flow benefits
Cash programs are “pay as you go,” non-cash incentive programs bill on redemption; as sales people save their points for larger awards, the brand pays for the actual performance long after it has occurred.
This is especially true in sales with higher levels of inventory, since increased sale at the user level may take time to result in increased purchases from the brand.
If you’d like to learn more about points based sales incentive programs please visit or platform page or request a live demo.