Tag Archive for: gifts

Bribes, Rewards or Gifts – Which is Best?

One Saturday morning, after a run and workout, I looked forward to a bagel and an egg over easy for breakfast. As I settled in with my meal and flipped through the news channels, something on the news caught my eye. It was a story on parenting.

One mom talked about “bribing” her kids. She told her teenage daughter she’d take her to Disney World if she got all As on her next report card. Another parent said no way would he bribe his kids to do chores or get good grades. The last parent said she uses both techniques at different times.

Obviously, none of the parents understood much about what social psychology has to say about influencing behavior. The rewards the parents were offering (there were more examples than just Disney World) work to some degree. That’s why so many businesses use rewards to motivate behavior. However, studies show quite often that engaging the principle of reciprocity can be more effective and cost a lot less.

One study I share during my workshops has to do with a health insurance company wanting to see if they could get a better response from owners of construction companies on their health questionnaire. With one group of business owners they offered a $50 reward for completing the questionnaire. With the rest of the business owners they sent a $5 check acknowledging their time was valuable and they appreciated them taking time to complete the questionnaire.

And what were the results? You’d think the $50 offer being 10 times more would definitely get a better response but it didn’t. Only 23% of those offered the big reward filled out the questionnaire but 52% who were given the $5 gift up front complied with the request. So, the response was more than twice as much in the gift scenario and there was a huge savings depending on exactly how many people cashed the $5 check. If every person, including those who didn’t fill out the questionnaire, cashed the check, the savings would be 57%. If only those who completed the questionnaire cashed the check the health company would have saved 77%! No matter how you look at it, more than doubling the response at a substantial savings is the smart business decision.

Sometimes giving something small up front engages reciprocity and the other person feels it’s only right to repay the favor. Here’s a personal example with my daughter, Abigail. When she was about 15 she was a typical teenage girl. She didn’t want to do things that were physically hard and would make her sweat … like cutting the grass. I was going to be traveling and knew I’d need her help with the lawn while I was away. I also knew if I tried to negotiate I’d lose. Had I said, “Abigail, I’ll give you a $10 a week raise in your allowance if you’ll cut the grass when I need it,” she would have said, “No thanks dad, I don’t like money that much.” Then I would have either had to significantly increase my offer or pull the parent card and force her to cut the grass. Neither approach would have been good because she would resent me or make me a lot poorer.

What I did instead was give her the $10 raise without asking for anything in return. When she asked why I was giving her the raise I told her reasons I believe she’d legitimately earned it. About a week later I was going on a trip and asked if she would cut the grass. Initially she hesitated and gave me a look but before we got any further I said, “Come on Abigail, I gave you a raise in your allowance and didn’t ask for anything. Can’t you help me out?” She said she’d cut the grass and has ever since – without arguing – whenever I’ve needed her help. And here’s the best part – for Christmas last year one of my gifts was a card with grass cutting coupons…and I don’t even give her an allowance anymore!

As noted earlier, rewards do change behavior and that’s why they’re so prevalent in business. However, much of the time we can get the behavior change we want and spend a lot less by ethically and correctly engaging reciprocity.

APPLICATION: This week take a look at instances in which you reward people for behavior and see if you can engage reciprocity instead by freely giving up front. Then, next time you need a favor just ask for their help. I think you’ll be pleasantly surprised by how many say “Yes” and that it cost you a lot less.

Brian Ahearn, CMCT®
Chief Influence Officer
influencePEOPLE 
Helping You Learn to Hear “Yes”.

Persuasion Can Double Your Results at Half the Cost!

 

It’s a new year and that means a fresh start. The profit and sales measures have all been reset to zero and the sky is the limit. If I could share with you a proven persuasion technique that could potentially double your results at half the cost would you be interested?

Most businesses use rewards to stimulate the desired results. That’s not bad business but there’s a more cost effective way that can help you get better results. How, you ask? By engaging people with gifts instead of rewards.
Rewards are based on an “if you, I will” system whereas gifts are simply “I will.” You see, a gift given does not
necessarily mean the other person will do what you want. We only need to look at charitable organizations like Easter Seals or March of Dimes to realize not everyone donates to those causes. However, if those two organizations are like the American Veterans they probably see twice as many people donate because of those little mailing labels – gifts – we receive in the mail.
When people are given a gift they feel compelled to give back in some way. We call that tendency “reciprocity.” I often share a reciprocity study in workshops that makes business owners sit up and take notice.
A health insurance company wanted owners of construction companies to take a health insurance survey. Half of the owners
were told they’d be given $50 when they completed and returned the completed survey. That’s pretty generous! The other owners were given a $5 check up front with a short note letting them know their time was valuable and thanked them for taking the survey.
On the surface most people would conclude two
things:

  1. Those being offered $50 will be far more likely to take the survey. After all,
    the incentive is 10 times more.
  2. Giving $5 up front will be too costly, especially because people can “take the money and run” and skip completing the
    survey.
If you thought either of those, you were wrong on both accounts. What they found was more than twice as many people took the survey when given the $5 check (52% vs. 23%) and the cost savings was potentially huge. If every person receiving the $5 check cashed it, the insurance company would have still saved 57%, but if only those who completed the survey cashed
it, the savings would have been 77%!
You don’t need to be a mathematician or have much business savvy to know more than doubling your results at a savings of more than 50%, possibly as much as 77%, makes good business sense.
Why do we see such a phenomenal result? Because reciprocity, the need we all feel to give back, is ingrained in us from
our earliest memories. As soon as we’re able to speak, mom and dad taught us to say “thank you” when someone did something for us. As we got older we learned more sophisticated ways to repay our obligations.
Next time you feel tempted to motivate someone with a big reward pause and consider whether or not there’s a way to give something significantly less and still get the desired behavior. It’s a new year so what better way to kick it off than by doubling your results at half the cost!

 

Brian, CMCT®
influencepeople 
Helping You Learn to Hear “Yes”.