Cash vs Gift…Who Is Really King?
The holidays are here, which means everyone’s in a gift-giving mood. But how come gifts are only relegated to a certain time of year? Most people like to give gifts. Everyone likes to receive them. And when it comes to the business world we should be giving gifts year-round. Because gifts matter more than money.
Well let me rephrase that. Gifts as a motivator matter more than money.
As business owners, practice managers and marketers, we’re all in the business of motivation…. whether it\’s motivating your employees to increase performance, motivating your sales team to convert or motivating a prospect to actually get off the couch, pick up the phone and call you.
And when it comes to motivation, gift is king.
In a study conducted by Dr. Sebstian Kube of the Max Planck Institute titled The Currency of Reciprocity in the Workplace, Dr. Kube cites that “gifts dramatically increased a worker\’s productivity, whereas cash incentives were largely ineffective. Even though the majority of employees would rather take the cash equivalent of the gift.”
So cash is preferred but less effective? Very interesting.
To spin it more at-home: how many practices have incentivized your lead generation with a gift vs. financial reward? As long as the gift was of an impressionable perceived value, and relevant to the treatment, chances are it drew more prospects than a cash or financing incentive alone. However, most patients (a 2-1 ratio on average) who move forward elect to receive the cash equivalent towards their treatment fees when all is said and done.
This phenomenon adds an additional benefit to a practice, as the true cost of a $500 gift card to say the Apple store is higher than a $500 savings on procedure fees.
But if everyone likes cash, prefers cash, how come it doesn\’t resonate? It all comes down to behavioral psychology; the transactional vs. relational relationship.
You see, when money is involved, whether it’s a cash bonus or cash purchase incentive, the relationship immediately becomes transactional in nature. It carries a different essence. It’s the cost of doing business.
Non-cash incentives communicate emotionally and elicit a relational connection.
Citing the aforementioned study again finds that “…gifts provide a more salient signal of kind intentions and therefore represent a superior mechanism for the establishment of relations. Simply put, gifts are often considered to be more thoughtful.”
Looking more closely, we discover that:
- Gifts are more memorable. They create lasting reminders of their positive experience (think LASIK and sunglasses, bras and breast augmentation).
- Gifts are not viewed as a currency.
- Gifts promote longer word of mouth resonance, and people who receive gifts are 90% more likely to comment about the gift – and their experience – to friends and family.
- Gifts establish deeper positive associations long-term with your practice.
- Gifts don’t cheapen the perception of the treatment.
Now some caveats to remember:
- You need to research and discover gift incentives that best fit your service category.
- Don’t skimp. Think perceived value of 10% or more of procedure fees.
- Delivery and execution is key – try and optimize the timing and situation for the most impact possible.
When it comes to incentive marketing for our practices, we\’ve virtually done away with cash solely and moved to gift or reward based promotions.
Yes it’s a logistical challenge. Yes it costs more to execute. But the benefits – more leads, better leads, more appreciation, more loyalty, more word of mouth – I would say are worth it.
They say giving a gift triggers the same chemical response in our bran as falling in love. I think it’s time we all become a little more generous year-round.
Side note: AS I mentioned earlier, one area where the gift-incentivizing philosophy is extremely impactful is within the workplace. There are literally dozens of recent, relevant studies that have been conducted on the subject, just Google it. (But here are a couple links just in case you’re curious):
Hubspot – why non monetary incentives trump cash
theirf.org/ – great academic motivational & incentive research site
OptiCall\’s ubiquitous sales plug: Who would we be if we didn’t practice what we preach? (well, Scrooge actually) – This holiday season, everyone who signs up for an OptiCall service is going to receive a shiny new iPad Air! Not the outdated, refurbished models. The sleek, sexy, powerful new ones. Congratulations, you made our nice list.
Click here for complete details on this offer, and how partnering with Opticall can position your practice for a more profitable 2015 and beyond.