By Greg Cicatelli
If you’re involved in market research, you understand the importance of incentives. People are rarely willing to give up their time for free, and if they don’t feel that you’re going to reward them proportionately, you might as well forget about your study. As such, it’s crucial for market research organizations keep up to date with the newest, shiniest incentive program–and right now, that’s mobile rewards.
Let’s chew on some statistics. According to a November 2014 Salesforce Marketing Cloud report, mobile rewards programs ranked as the most effective outreach option for mobile marketers. Moreover, a report by 451 Research found that 37% of US mobile phone users have used a mobile reward program app to collect and redeem loyalty rewards, while another 21% were interested in trying one.
With figures like these, you’d have to be a fool not to be excited about mobile rewards programs–right?
Not so fast.
Let me clarify: I understand that rewards and incentives are a great way to encourage participants to contribute their time and information to your cause–but not all rewards are created equal. While mobile reward programs are becoming increasingly popular, the vast majority of these existing platforms offer just one type of reward: closed loop gift cards.
Out of the Loop
‘Closed loop’ refers to gift cards that can only be redeemed through their associated retailer. For example, an iTunes gift card can only be redeemed through iTunes. Likewise, a Starbucks gift card can only be redeemed through… well, you get the idea.
In the most common type of mobile rewards program, participants are awarded points that they can spend on closed loop gift cards from a selection of retailers and brands. Sure, it’s a monetary incentive–but once participants choose a gift card, they’re forced to redeem it with just one retailer.
Why is that a problem? Well, according to an Ebiquity study commissioned by American Express, nearly three-quarters of Americans prefer rewards programs that allow them to shop with many retailers–not just one. Furthermore, a 2013 survey conducted by Forrester Research found that consumers were far more motivated to share their personal information with companies in return for cash incentives (41%) than loyalty program points (28%). In short, when it comes to maximizing the returns on mobile rewards, companies need to start thinking past points and gift cards and instead focus their efforts on providing participants with what they really want–cash.
Power to the Participant
Cash-based incentive programs offer participants far more flexibility than closed loop gift cards. It goes without saying that individuals can use their incentive payments to make purchases with any number of retailers–but unlike gift cards, cash-based incentives give participants the freedom to put their rewards towards the things that they really need: rent payments, bills, and so on.
Beyond that, advances in payments technology have provided participants with better, more flexible access to cash-based rewards. Top incentive fulfillment platforms let individuals choose how they wish to receive their monetary incentive, whether it be directly to their bank, via old-school check delivery, or in a virtual prepaid card format. Worried about servicing on-the-go participants? Gift card loyalty programs aren’t the only ones with mobile access–the best cash-based incentive programs make it easy to accept, transfer, and manage their rewards in real-time, thanks to an online portal and native smartphone apps.
Recruitment & Retention
When it comes to improving market research participation specifically, cash-based incentive programs are ideal. For one, cash-based incentives have been shown to improve participant response rates. In a 2004 study on web-based survey incentives, cash-based rewards generated higher response rates than physical and digital gift certificates with both new and repeat participants. That means that cash-based incentive programs are a more effective method of attracting new respondents and retaining existing ones. For an industry that depends on high response rates and participant retention, that’s a big deal.
Looking to expand your studies globally? Multi-currency cash-based incentive platforms make it easy to provider flexible incentives to a globally-dispersed participant pool. Sending gift cards internationally can be a major financial and administrative burden: there’s the issue of finding and purchasing region-specific gift cards, then organizing and paying for the distribution of the cards–which is to say nothing of the difficulties presented by foreign exchange. In contrast, a multi-currency incentive platform makes it easy to send rewards in the appropriate currency, quickly and affordably.
Trends Fade; Solutions Last Forever
In the past, cash-based incentive programs have been a frightening prospect for market research organizations. Monetary rewards used to come with their own set of challenges, both administrative and economic. Not so with a modern, top-tier payments provider. Hyperwallet simplifies cash-based rewards by managing the process from start to finish, distributing global incentive payments rapidly and securely through its international network of payment partners. Respondents are able to access and manage their incentive payments online or on-the-go, with options to receive the payment by check delivery, prepaid card, or bank deposit–all in the local currency.
So, sure, mobile rewards programs might be the hot new thing. But when it comes to increasing response rates, maximizing participant retention, and reducing churn, cash is–and always will be–king.