Cash is King for Merchandise Incentive Awards

For years incentive companies have pitched the "trophy value" of merchandise incentive awards. The essence of the argument is that people remember tangible prizes and trips far longer than cash rewards.

There is some merit to this line of thinking. Many years ago I was in a program run by Apple Computer that gave out merchandise prizes from a beautiful catalog. I picked a Hartman Briefcase and used it for several years.

I was really proud of that briefcase. But keep in mind that many incentive companies have an ulterior motive for recommending merchandise: They make much more money that way. Margins for incentive merchandise are 25% and often more. Most incentive houses merchandise their catalogs for 30% to 35% margins.

Costs for running debit card programs are dramatically less, and companies that offer this method of delivery do so at far lower profit margins. Expect to see overhead to manage card programs in the neighborhood of 2/3 less than merchandise programs.

So which is more effective? At MTCPerformance we have talked to thousands of program participants, and they have a simple, oft-repeated answer: Cash is king!

Click Here to Read the Full Entry on www.everythingchannel.com