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Why Experience Gifts Outper form Traditional Employee Gifts Ever y Time

Copyright © 2010 by Cloud 9 Living, LLC All rights reserved. The information in this document is confidential and proprietary. No portion of this document may be reproduced, stored in a retrieval system or transmitted in any form or by any means – electronic, photocopy, recording, scanning or other without the written permission of the publisher. Published by Cloud 9 Living, LLC 4999 Pearl East Circle Suite 102 Boulder, CO. 80301

Copyright © 2010 by Cloud 9 Living, LLC


Introduction Provide the Ultimate in Trophy Value Unleash the Powerful “Water Cooler Effect” Exploit the Wants vs. Needs Phenomenon Develop Strong Emotional Bonds Motivate an Entire Group, Not Just a Select Few Avoide the Cash Trap Breathe New Life Into Corporate Culture Conclusion 1 2 3 4 5 6 7 9 10

Copyright © 2010 by Cloud 9 Living, LLC


It’s an inescapable fact: a company is only as good as the people that comprise it. And in order to maximize the abilities and contributions of the workforce, a peak level of engagement is required that will stimulate loyalty and a passionate desire to succeed both individually, and as a vital element in the organizational whole. Increasingly, managers are discovering that some of the more traditional means of motivation – cash, merchandise, travel, etc. – no longer provide what is necessary to both retain top performers, and drive exceptional performance throughout the company. As the desires and goals of employees become more dynamic, so must the programs designed to engage them. As a result, many of today’s leading organizations are turning to Experience Gifts to stay ahead of the curve.

Experience Gifts offer unique and memorable life experiences as rewards to drive performance.
From hot stone massages and private winery tours to surfing lessons and Nextel Cup stockcar racing schools, Experience Gifts offer something for everyone and have an infectious quality that permeates throughout the company creating an environment of loyalty, high performance, and a passionate investment in corporate growth.

Copyright © 2010 by Cloud 9 Living, LLC


Provide the Ultimate in Trophy Value
In order to fully maximize the effectiveness of an employee reward, the gift offered must generate excitement not only on the front end but also after the gifts have been distributed.

During this post-gift phase, the goal is to maintain the excitement generated and carry that momentum into the future. Experiences afford the best opportunity to achieve this.
Imagine walking into your employees office and seeing pictures of them golfing at Pinehurst #2, site of several US Open tournaments, or pushing a fully loaded Land Rover to its limits on an off road course or enjoying a romantic horseback ride on the beach with their significant other. Better yet, imagine another employee seeing the picture and thinking “I want to do that”. Let’s face it, jealously can be a great motivational tool. These “trophies” serve as constant reminders of what is possible within your company. Unlike cash, traditional gift cards and merchandise; experiences create unparalleled trophy value on display in the most important place – your office, for all to see.

Cash is spent, merchandise ends up in the closet, but memories last forever.

Copyright © 2010 by Cloud 9 Living, LLC


Unleash the Powerful “Water Cooler Effect”
Instead of discussing the latest reality TV development around the water cooler, watch as your employees recount the story of the sunset dinner cruise they had with their spouse that weekend or the guided snowmobile tour of 14,000 foot peaks they just returned from. This storytelling, aka the “Water Cooler Effect”, has the potential to generate unmatched excitement throughout your entire work force.

Experience Gifts naturally lend themselves to storytelling.
When was the last time you heard an employee bragging to his or her co-workers about how they spent the cash he or she received as a gift to pay bills? Or have you ever heard an employee excitedly telling their co workers about how he used the gift card he recieved last quarter to make some unavoidable home improvements? Certainly not. That’s because traditional gifts, though practical, do not effectively create the kind of buzz that can electrify an entire company and produce the results you need. Conversely, envision one of your employees coming back from a fighter pilot mission where he engaged in mock air-combat against enemy aircraft while flying an Italian built fighter plane. Or imagine the talk around the office when one of your employees who is an avid sailor returns from her chance to take the helm on an America’s Cup boat that was actually raced in this legendary event. These are the type of “once-in-a-lifetime” moments Experience Gifts generate, creating unmatched storytelling material. And when employees are talking about their experiences or sharing pictures of the dream activities they have partaken in, the excitement becomes an infectious driver of positive behavior. Maintaining momentum is crucial to maximizing the effectiveness of an gifting or rewards program. Having gifts that promote great storytelling will increase excitement and engagement for future gifts and rewards programs.

“Experiences are more pleasurable to talk about and they more successfully foster successful social relationships.”
“To Have or Not to Have? That is the Question”
Professors Thomas Gilovich, Cornell University & Leaf Van Boven, University of Colorado. Journal of Personality and Social Psychology, 12/2003

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Exploit the Wants vs. Needs Phenomenon
Simply put, a Need is something that you must have – food, shelter etc. A Want is something you would like to have – a new car, more time with your family etc. Reward and gift programs that offer luxury rewards or non-essential items (Wants) are the most effective means to trigger heightened performance. Whereas gifts that are readily applied to obligations and necessities (Needs) draw all of the life out of a gift and create an association with personal burdens. Despite that fact that employees may indicate they would prefer cash or merchandise, your organization will actually achieve better results through Experience Gifts.

“People are willing to work harder for luxuries or non-essential items. When they start thinking about dollars they become more rational, more economical and less willing to work for it.” “Luxuries are more effective than cash and cash equivalents in triggering workplace performance that exceeds expectations.” “The harder someone must work to achieve a goal, the more they want to receive a non-essential item as a reward.”
“Earning the Right to Indulge”
Professor Ran Kivetz Columbia Graduate School of Business. Journal of Marketing Research, May 2002

When an individual is offered an opportunity to achieve something that was not previously considered available, he or she will become engrossed in the quest to make that impossibility a reality. Experience Gifts, such as having a gourmet chef prepare a meal for your family in the privacy of your own home, commonly represent activities that employees may have dreamed of, but never really believed were attainable. Opening doors to these types of once-in-a-lifetime experiences will cater to personal passions and thereby stimulate engagement triggering heightened performance.

“For true motivation, you need to give people something they want or desire, not something they need.”
“Avoiding the Cash Trap: Why Cash Kills Motivation”
William Flanagan Incentive Magazine, Nov. 3, 2006

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Develop Strong Emotional Bonds
Can your company weather a turnover storm? Consider this: according to Chris Young, founder of The Rainmaker Group, a leading human talent selection and development firm, the costs of employee turnover can be staggering, ranging from ½ to 5 times an employee’s annual wages dependent upon his or her position. While turnover is a natural – and not always unhealthy – cost of doing business, it is a metric that clearly requires careful attention. Regardless of business size, a high turnover rate can be devastating to the bottom line and efforts must be made to retain great employees. But the strategies cannot be passive. They must be carefully considered and applied in such a way as to deliver maximum impact. Bringing the dynamic concept of Experience Gifts to your workforce is the answer. When you look back 5 years, can you remember what gift you were given for your birthday? Chances are you can’t. But what everyone does hold on to are the memories made through cherished life experiences. Like the night a couple got the chance to create and taste their own blend of wine, or the first time they took a sunset helicopter tour of their city’s skyline, or the day they had the chance to get behind the wheel of a Formula 2000 racecar and put the pedal to the metal. These are the types of gifts that generate memories, and create an emotional, enduring connection.

“Employees who are engaged are less likely to leave.”
“Employee Engagement Now!”
Martha C. White Motivation Strategies

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Motivate an Entire Group, Not Just a Select Few
A well thought out gift, or recognition program, must engage not just the historic top performers, but the entire range of participants. Most importantly, gifts must engage the second tier performers, or “middle 70%”, who have yet to align their own performance with an invested desire to see the company thrive.

“Paying more attention to the legions of average performers can have a favorable long-term impact on profits, market share, and customer retention.”
“The Service Profit Chain: How Leading Companies Link Profit and Growth to Loyalty, Satisfaction and Value” James L. Heskett, W. Earl Sasser, Leonard A. Schlesinger Individuals have different desires and passions that excite and drive them to perform. It is crucial to offer incentives that will engage the maximum percentage of program participants. Using Experience Gifts can help you embrace this individualism and disparity in personal tastes rather than leaving a percentage of participants feeling disenfranchised. With a vast and diverse portfolio of experiences available with which to reward employees, there will be something for everyone.

Copyright © 2010 by Cloud 9 Living, LLC


Avoid The Cash Trap
Cash Everyone wants it, and there is always a practical need for it. As a result, businesses frequently offer cash incentives as their primary type of employee gift. The problem: cash does not effectively generate the excitement or motivation that most gifts are designed to achieve. A 2005 study by the Incentive Federation showed that cash rewards are too practical and unemotional, and are remembered for the shortest periods of time. When cash is used as a gift or reward, it invariably becomes perceived as an entitled aspect of overall compensation. The same Incentive Federation study examined how cash incentives are spent and showed that 29% of recipients use the cash to pay bills, 18% do not remember how they spend it, 11% use the cash to buy household items, and 11% put the cash into savings. While these are all practical allocations of cash, they neither generate the level of excitement that experiences do, nor will such practical uses trigger improved sales performance

How Cash Incentives are Spent
The Incentive Federation Study, 2005

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Avoid The Cash Trap


“People receive more enduring pleassure and satisfaction from investing in life experiences than material posssesions.”
“To Have or Not to Have? That is the Question”
Professors Thomas Gilovich, Cornell University & Leaf Van Boven, University of Colorado. Journal of Personality & Social Psychology, 12/03

Offering your employees merchandise as a gift or reward often creates an environment of redundancy. How many digital cameras, ipods or watches does one person need? While merchandise incentives are a common choice, they do not effectively create a sense of excitement amongst your workforce. The bottom line is that a vast percentage of your employees may already have whatever merchandise you are offering and the reward will end up being another dust collector on the shelf. Conversely, experiences live on for years as valued memories. Again, the point of any gift is to generate excitement; and TVs, Ipods, or company shirts just don’t do it anymore.

Copyright © 2010 by Cloud 9 Living, LLC


Breathe New Life Into Corporate Culture and Increase Employee Engagement
“There is a direct link between employee satisfaction and customer satisfaction, and between customer satisfaction and improved financial performance.”
“Linking Organizational Characteristics to Employee Behavior and Attitudes “ Forum for People Performance Management & Measurement Prof. Frank Mulhern and Patricia Whalen Northwestern University, 2003 Does your business effectively maximize this connection? How can you drive the right behavior to do so? A highly effective and qualitative way is by creating an undeniably compelling, fresh, and inspiring Corporate Culture. Experiences can help you do it. Employees want to be identified with something exciting and extraordinary. Through Experience Gifts, engaging companies can transcend the catchphrase notion of “life/work balance” and actively incorporate that concept into the fundamental elements of organizational operations, driving personal passions within the framework of corporate objectives and achieving long-term Loyalty. Employees draw inspiration from a company that nurtures individual passions, fueling a continued contribution to company growth and development. Rewarding and incentivizing employees with memorable experiences like private Wine & Chocolate tastings or scenic snowmobiling tours creates a sense of involvement and corporate community. The end result? A new face is stamped on the Corporate Culture. It is high impact, energetic, engaged, and highly effective.

Copyright © 2010 by Cloud 9 Living, LLC


A successful business relies upon a convergence of dedication on the part of its people and a spirit of engagement to nurture that dedication. The strongest tool at a company’s disposal for fostering an environment of engagement is the performance incentive. And the most effective gifts and rewards take into account the dynamic personal passions of a diverse workforce and feed those passions in such a way that an alignment exists and evolves between individual and organizational goals.

Experience Gifts deliver on the goal of every incentive program by delivering unparalleled results.
As managers adapt to the challenges presented in today’s business environment, they have begun to redefine their gifts and rewards to attain the most effective results through the implementation of the extraordinary: Experience Gifts.

To learn more about bringing your sales incentive programs into the high-impact world of experiences call us at 1.866.525.6839.

Copyright © 2010 by Cloud 9 Living, LLC