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The amazing growth of gift card rewards

Recalling my days working for a leading customer loyalty program, I remember the remarkable growth of program members exchanging their points for gift cards. This growth was remarkable for different reasons. First, it was a travel program where the majority of members accumulated their points for airline tickets. This travel orientation meant that members were accustomed to saving-up their points for long periods of time. Moreover, before the program introduced gift cards to its catalog, it added merchandise and experiences. This meant that members had a wide range of choices—everything from plasma TVs to show tickets to VIP events. Despite all these options, gift cards quickly grew to become the most popular non-travel reward.

Looking back, I now realize that the popularity of gift cards as a reward option had a lot to do with their flexibility and their faster attainability compared to the more aspirational, less attainable travel rewards.

But, my previous company isn’t alone. The entire incentives industry has seen the same trend in the past decade. In fact, the Incentives Research Foundation states that in 2012 gift cards had become the most popular gift among consumers shopping for friends and relatives and the tool of choice for businesses hoping to motivate employees, customers, and partners.

Gift cards: the preferred employee incentive reward

When it comes to motivating employees, gift cards are now undeniably the preferred non-cash reward option and used by 75% of businesses. Use of gift cards in employee rewards and recognition programs has even exceeded travel, merchandise, and cash rewards according to the October 2011 October 2011 report “State of Gift Card Use in the U.S.” by the Incentive Research Foundation. According to the IRF’s research, consumers have embraced gift cards because they make gift-giving “easy” and “reduce shopping time”. This convenience factor has no doubt also influenced people’s warm reception of gift cards as incentives in the workplace.

Incentive program managers and planners also prefer using gift cards as incentives because they are easier to administer, are more flexible and personal, and are popular amongst company staff. Above all, incentive planners view gift cards as the “most effective” reward option that offers the best overall return on investment, even compared to cash.

Similar to the IRF’s findings, we believe the effectiveness of gift cards over other non-cash and cash rewards is largely due to the unique combination of flexibility and “trophy value”. For example, if you offer your staff a catalog of merchandise, you’ll achieve high trophy value but low flexibility as staff may aspire to have some of the items you offer, but won’t necessarily find something appealing at any given time. In contrast, cash rewards offer high flexibility but low trophy value. The following quote from Mike Ryan, President Emeritus of The Performance Improvement Council, in the IRF report highlights this perfectly:

“A responsible person who receives cash as a reward may not feel comfortable about spending it on themselves, so it is not exciting for them. A $25 gift card is better than $25 cash because it gives them license to spend on themselves and this makes it appealing.”

Gift cards seem to strike that perfect middle ground - by offering a selection of well-known brands, as well as “open” prepaid cards from Visa, MasterCard, or American Express, your employees will find both trophy value and flexibility.

Compared to merchandise and travel, gift cards also dramatically reduce the administrative costs and burden associated with employee incentive programs. Ever shipped a TV across the continental US? It’s not cheap. Not to mention that merchandise programs require frequent catalog refreshes to maintain employee interest and tend to have higher customer servicing requirements (with staff calling to find out when their rewards are going to be delivered).

Digital revolution: the rise of e-gift cards

With the rise of mobile and digital payments, it’s not surprising that gift cards too are increasingly offered electronically. “E-gift cards” are similar to their plastic equivalents in that they can often be used in-store (printed or with a barcode displayed on your phone) or used to pay for purchases online (by either entering a PIN or redemption code). Moreover, Millennials prefer e-gift cards because, unlike physical cards, they can’t be “lost” and don’t need to be remembered before going shopping.

Plus with the growth of online retailers like Amazon as well as the online offerings of bricks-and-mortar retailers like Best Buy and Walmart, the number of possible ‘reward options’ is nearly infinite. Why manage a merchandise catalog with hundreds of items, when these online retailers have tens of thousands? And to offer their catalogs as rewards to your employees all you have to do is provide their e-gift cards as rewards in your employee incentive program.

Beyond the flexibility and choice provided by e-gift cards, I believe they will quickly overtake physical gift cards in the coming years as the most popular employee incentive reward due to their simplicity. Incentive program managers and planners will love them too - from the low cost of fulfillment to the instant gratification they provide (e-gift cards can be emailed or received instantly upon redemption), they help simplify and, at the same time, expand the utility of incentives.

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Qarrot makes motivation easy with our feature-rich platform and catalog of e-gift cards! Book your demo today!

With employee engagement on the minds of many employers and human capital professionals these days, we’ve taken it upon ourselves to scour hundreds of statistics from various studies and articles to come up with the 14 we find the most surprising.

These statistics concern not only the current state of employee engagement but the cost of low engagement to companies as well as the benefits of high employee engagement.

Current State of Employee Engagement

• 37% of U.S. accommodation and food services employees say they had or will quit their position in the current 12 month period.¹ (Retail, customer service, and hospitality organizations are designed around high-turnover: jobs are relatively easy to learn and new employees can be integrated fairly quickly. But, this strategy doesn’t eliminate the cost of “cycling through” staff.)
• 49,5% of U.S. employees are “not engaged” at work. (Worldwide, the percentage of engaged employees drops dramatically to 13%)
• 35% of the U.S. workforce said they’d look for a new job if they don’t receive a pay raise in the next year. ² (In U.S. tech-powered companies, 65% of employees are confident they can find another job if their salary expectations aren’t met.)
• 52% of the workforce is open to a new job opportunity.

The Cost of Low Employee Engagement to Companies

• 150% of a mid-level employee’s annual salary can go into finding and hiring their replacement. (400% for high-level or highly specialized employees. Those expenses cover advertising the vacant position, interviewing applicants, screening candidates, hiring, training...) ³
• 2 years is the average time it takes for a new employee to reach the productivity level of the person they replaced. (The onboarding process also costs the company; training, distraction for managers whose time for coaching and developing existing staff is removed.)

Employee turnover resulting from low engagement has other hidden costs: the process of training new hires can be a distraction for the current staff and, if turnover happens frequently, can ultimately demotivate those employees tasked with back-filling while the new hires come up to speed. This can have even more insidious effects with customers. Turnover amongst customer-facing staff can give the appearance of instability within the organization and ultimately can hurt customers’ confidence.

The Benefits of High Employee Engagement

• 80% of most organizations’ market value comes from intangible assets such as brand, quality of the workforce; its talent, passion, and commitment (A few decades ago, this value was almost exclusively based on tangible assets like machinery, products, and facilities.)⁴
• $2,400 is the average increase in profit per employee per year a company can reach with employee engagement programs.⁵
• 97% of the companies with good employee engagement levels (half or more highly engaged employees) report that engagement leads to greater productivity. 93% say that it plays a major role in the company’s capacity to meet its revenue goals. Overall, 82% of these companies report that high employee retention improves customer loyalty, which provides with a noticeable competitive advantage.
• 33% report a significant impact of engagement on profit margins, and 81% on revenue growth.⁶

Interestingly, highly engaged employees have both a positive impact on customer experience and, as a result, customer loyalty. A long-term study at Sears reveals customers who had a pleasant, pro-active or superior service experience are 10% to 30% more loyal than customers who have did not and would strongly consider purchasing again from a brand if they had a good customer experience.⁷

Regardless of the statistic, it’s clear that employers and human capital professionals are preoccupied with employee engagement for very good reason.

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Boost your employees' engagement and motivate improved performance with Qarrot - schedule your demo here!

If you own or operate a retail or food service business, you may be amongst the large percentage of companies that is stifling its managers and, by extension, the performance of your front-line.

Over 50% of the global economy is driven by businesses with “distributed networks” of sites and employees. Retailers, including food service and retail banks, are an important segment within this group. And for most of these businesses, McKinsey & Company has found that managers are being stifled. Whether by over-loading them with heavy administrative burdens, or simply not empowering them to make decisions critical to providing a good customer experience, these companies are undermining their own success.

According to McKinsey, front-line managers – including district or area managers as well as store managers – are not empowered to spend their time where it can create the most value. Instead of spending as much as 60% of their time on administrative tasks, front-line managers could be spending more time on the floor and coaching staff.

In fact, a lack of front-line coaching can be disastrous for service businesses, where research shows that the attitudes and behavior of customer-facing employees is strongly related to customers’ perceptions of service quality.

It’s no surprise then that Gallup has found hiring great managers can result in a 27% increase in revenue per employee. Gallup’s own research shows that many companies hire managers based on years of service or tenure instead of talent and their natural ability to lead. This natural ability to lead – to inspire employees, drive outcomes, overcome adversity, hold people accountable, build strong relationships, and make tough decisions – drives better performance by itself, but is also critical to overall employee engagement.

In fact, Gallup reports that naturally talented managers play an essential role in creating an engaged workforce, explaining at least 70% of the variance in the engagement of their teams. But many companies haven’t woken up to this reality. Based on 2012 data showing that the majority of American workers are either “not engaged” or are “actively disengaged” at work, Gallup calculates that low engagement levels are costing U.S. companies between $450 billion and $550 billion per year.

But before changing hiring practices, many companies ought to first rethink the role of their front-line managers. Rather than ‘cogs’ in the administrative machine of the company, the role of front-line managers should be about achieving improved store performance.

This may be easier said than done.

Current attitudes towards the role of front-line managers have left many believing that their ability to impact the business is limited. McKinsey reports one study showing that store managers spent more than half of their time on administration and felt they had no control over key performance drivers (such as sales in important product categories). The company in the study experimented with an improved store layout, streamlined reporting, and other strategies to free-up their managers to spend more time on the floor.

The results were impressive: Their managers were able to allocate 60 to 70% of their time on the floor, providing high-quality coaching to staff and interacting with customers. Through their coaching, managers were able to discuss strategies and performance metrics with their staff. This included a new performance scorecard, which helped focus staff on key behaviors like greeting customers when they enter the store and on “suggestive” selling. When rolled out across their store network, this new approach drove a 51% increase in productivity in one region and 65% in another.

With this mind, we believe retailers can make significant gains by both hiring great managers as well as implementing the strategies and practices that empower them to allocate more time to the floor, making decisions, and acting on opportunities.

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Engage your managers and empower them to motivate your front-line for better results with Qarrot! Book a demo!

In many businesses, motivating teamwork - or more specifically, motivating your staff to win as a team - can trump the pursuit of individual achievement and bring a higher level of success. In fact, a joint study by the International Society for Performance Improvement and The Incentive Research Foundation found that “Incentivized teams increased their performance by 45%; incentivized individuals increased their performance an average of 27%”.

This learning equally applies to retail stores, restaurants, and cafes. In many of these businesses, an emphasis on shared goals and rewards can lead to better results.

Here are a few areas where we think motivating teamwork leads to better outcomes compared to individual performance:

Lots of part-time staff

Motivating part-time staff to go above and beyond is a challenge in any situation. But if a business can successfully instill a sense of teamwork amongst its employees, even the part-timers are likely to feel motivated and do their part to help achieve the goal.

With teamwork, each member feels that they’re a part of something bigger than themselves. If one member doesn’t do their part, then they’re not just letting themselves down, but the entire team.

And when the goal is achieved the whole team shares in the success, not just one person. This avoids the possibility of demotivating employees who didn’t win.

Employees frequently rotate roles

In many retail businesses, employees tend to specialize in one area. However, in certain sectors, such as Quick Service Restaurants, it’s not uncommon for an employee to work the cash one day and to be in the kitchen the next. This rotation of tasks provides some healthy variety to staff, but it also requires that they work together to communicate, transfer knowledge, and share tips and tricks.

As a result, this type of role rotation is another prime candidate for teamwork. What better way to nurture collaboration and knowledge transfer than through shared team objectives and rewards? Staff will feel more motivated to ensure their counterparts are equipped to perform the tasks through their rotations and to help one another.

Serving the customer requires teamwork

Businesses where multiple employees are involved in serving the customer - cafes and restaurants, for example – are ideally suited to team goals and rewards. Because the employee who takes the order is usually not the same person preparing the coffee or the food, shared team goals and rewards can be essential to success.

Teamwork is key to innovation

The Society for Human Resource Management cites teamwork and collaboration as key ingredients to successful innovation. And team-based incentives are a great way of emphasizing and fostering collaboration amongst employees to produce innovation.

The SHRM goes on to add that team incentives also benefit organizations by focusing employees on shared goals, fostering teamwork that leads to better group problem-solving, improving peer-to-peer support, and cross-organizational performance.

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Visit us at Qarrot to learn more about motivating teamwork and rewarding your staff for winning as a team!

Is there a science behind making a sale? Here’s a rundown of foolproof ways to improve the sales performance of retail staff—and how to make these tactics stick.

1. Begin each shift with an optimistic outlook.
2. It can be easy for retail staff to get stuck in a rut, particularly after a day in which it was difficult to close a sale. Noted sales and retail expert Bob Phibbs is a proponent of staff “talking themselves up” before a shift. He even goes as far to say that employees should be mindful of what they’re watching or listening to before work, as it may affect their mood and have a negative impact on their sales performance.
3. Research has shown that when people perform interrogative self-talk, like ‘Can I do it?’ they outperformed people who simply talked themselves up in a declarative way.
4. First impressions are highly important at the start of any interaction, whether it’s a personal or professional one.
5. Retail staff only have a fraction of a second to make a good impression on shoppers. With such a short frame of time to work with, it’s very easy to completely lose someone and make them disengage.
6. To get someone on your side, be genuine and refrain from being pushy. For instance, allow them to speak first by simply asking them how they’re doing. Sharing something positive with them - for example, remarking on how nice the weather is, will led to organic small talk. Shopify points to research that indicates that five minutes of chatting increases the amount of value created during a negotiation.
7. Rehearse potential scenarios or interactions.
8. In the retail industry, quick-thinking and thoughtfulness can easily save a sales situation that has turned sour. Employees should be prepared to mitigate or resolve any conflicts or misunderstandings. Think about envisioning certain scenarios and how you’d react to them in the most professional way.
9. During a busy shift, it can be instinctive to quickly provide an answer without thinking it through, or simply brushing someone off because you’re serving someone else.
10. For example, if you don’t know the answer to a question, assure the customer you’re going to find someone who does. Simply acknowledging a concern or question and then finding a solution often goes a long way.
11. Be mindful of your body language.
12. While it’s certainly important to use discretion when speaking with colleagues and potential customers, it’s also equally important to ensure your body language conveys friendliness.
13. For instance, unclasp your arms and hands, as people who cross their arms generally look unapproachable.
14. If possible, greet someone with a handshake - Shopify cites research that proves that people are twice as likely to remember you if you shake hands with them.
15. Finally, maintaining a ‘power pose,’ (standing with arms and legs open) will give you a confidence boost and convey that self-assuredness to others
16. Cutting down on choices is key.
17. Steer clear of overwhelming potential customers with too many choices - Carmine Gallo, a communication and presentations expert, says that people’s short term memory can only retain three bits of information at a time. By providing shoppers with too many choices, it can run the risk of frustrating them to the point that they won’t buy anything.

Retail sales performance training

Many employees have their own style or technique of building rapport and ultimately selling to customers. While it’s great to see staff inject their own personality, it may be necessary to have them brush up on strategies or new best practices to keep their sales performance up to snuff.

Bob Phibbs notes that many retail staff are complacent and set in their ways, making them non-receptive to new training. In addition, staff may have no inkling or desire to learn something new, especially when they feel that they’re forced into it.

As well, front-line staff can feel that training and their real-world experiences are two vastly different things.

Tackling resistance to employee learning can be simple. Put an incentive system in place that not only encourages engagement with the training material, but also motivates staff to adopt the behaviours necessary to boost their sales performance.

Making the training process simple, effective and worthwhile for employees by attaching incentives will also go a long way in terms of employee retention.

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Discover more resources on employee engagement and performance incentives by visiting Qarrot.com!

Implementing an eLearning program in retail and franchise businesses will improve the effectiveness of front-line staff and positively impact overarching business objectives.

There are several elements that eLearning programs combine that make them particularly effective when deployed in organizations to train staff.

The gamification of eLearning programs means that competition is encouraged amongst staff, and points are accrued for carrying out desired actions. Employees are incentivized with perks, like gift cards, and are accordingly rewarded when they’ve achieved a high level of performance.When searching for an optimal eLearning platform, the following attributes should be considered:

• Interactive and engaging: Is the platform easy to access from mobile devices? Is the interface and user experience inviting, or would it be difficult to use the platform for a long period of time? Does it provide staff with clearly outlined goals and does it adequately convey rewards?
• Ability to customize: Are there facets of your business that need to be emphasized? Look for a platform that allows for flexibility.
• Administrative view: A robust platform should allow for management staff or corporate to analyze the progress of staff. It’s critical to have a clear view of the impact the platform is having, in addition to having insights on how employees are progressing. For franchise businesses, this would be especially important to track how various locations are faring compared to one another.

Ultimately, eLearning programs prep retail staff to best serve customers and mobilize them to work towards achieving sales and revenue objectives.

‍How to ensure the success of a virtual learning program

‍Prior to rolling out an eLearning program, businesses should assess the types of KPIs and metrics they will be focused on measuring. Bob Phibbs, a thought leader in the sales training industry, notes that businesses should be looking at not only higher sales, but also at the number of items per transaction and the average sales per employee per hour of work.

Once metrics and benchmarks are set, businesses should remember to frequently check in with staff to gauge their progress and their level of engagement with the platform.

‍Training programs deliver unparalleled results

‍In the same piece by Phibbs cited above, he explains that investing in a training program for front-line staff will produce results that a discount or marketing program wouldn’t be able to. What’s more, the training will stick with staff and improve their performance well into the future, as opposed to simply boosting sales for a temporary period of time.

‍Neglecting staff training is detrimental to businesses in the long run

‍As it turns out, businesses who believe there’s not a significant enough ROI on front-line staff training programs are mistaken.

Emad Rizkalla, CEO of Bluedrop Performance Learning, explains that companies failing to “develop their employees could be doing damage not only to morale, but to the bottom line as well.”

He cites a finding by HR Magazine that says “companies investing in $1,500 or more per employee per year on training average 24 percent higher profit margins than companies with lower yearly training investments.

Further findings to illustrate his claim include stats from the American Society for Training and Development (ASTD), including one that states that companies who offer comprehensive training have a 218% higher income per employee than those who offer lower quality training.

For companies with training programs, Rizkalla also points out that there are other less tangible, but equally important, outcomes. This includes “happier employees, better leaders and enhanced teamwork.”

Accordingly, Phibbs stresses that employers who invest in training programs will experience lower levels of turnover in their organizations.

Learn more about how to create an eLearning initiative that your front-line staff are motivated to complete!

Employee retention and motivation remain a constant problem for retailers and franchises. Here are the reasons why churn is so common in retail - and steps businesses can take to prevent it.

Mitigating High Turnover in Retail Businesses

Low employee retention among front-line staff in retail businesses is prevalent - according to a study by Hay Group, retailers reported a median turnover rate of 67 per cent in 2012.There are a number of reasons why retailers need to make a concerted effort to reduce high turnover among their front-line staff.

Why is high turnover so damaging to retail businesses?

For retail employees earning $10 per hour, it costs upwards of $3,000 to locate, hire and train a replacement, according to the Center for American Progress. Replacing several employees at once is costly financially, and dedicating resources to recruit new staff is a time burden that can lead to a disruption in day-to-day operations.

A 2015 Bloomberg article breaking down the tactics big box retailers are using to attract and keep front-line staff cites that new hires aren’t as productive as seasoned employees, “creating an efficiency cost that goes beyond the expense of finding and training a rookie.”

As illustrated both qualitatively and quantitatively, the repercussions of a front-line employee base with a high rate of churn are dire.

The causes of employee turnover in retail businesses

Here are some of the most common or most-talked about factors that lead to low employee retention rates in retail businesses:

• ‍Lack of recognition: Failing to acknowledge strong performance can lead to dissatisfied employees that are likely to quit. Coordinating a benefits program that rewards number of sales or revenue netted from upsells is a good place to start.
• ‍There’s a major disconnect between employee tasks and business objectives: Instilling a sense of ownership in front-line staff and conveying the importance of their role is essential. Retailers should give their front-line staff a clear picture of how their duties relate to overall goals.If a store is planning to promote a discount or special, it can be explained that the success of the campaign (which front-line staff are responsible for) is directly linked to meeting important quarterly or monthly revenue benchmarks.
• ‍There’s no variety in tasks: Employees who are assigned the same duty at each shift may get bored of the routine over time. Varying up training or responsibilities can prevent monotony and a feeling of stagnation.
• ‍Inadequate training may hinder an employee’s progress: If front-line staff don’t fully understand the nuances of a business, they may be unable to succeed at helping customers or effectively selling products.Writing about retail employee turnover, Bob Phibbs notes, “Just because an employee has previous experience does not mean they will understand what makes your store different.” It’s on the onus of an employer to properly and thoroughly train any incoming employees.
• ‍Lack of security or predictability: The nature of scheduling employees in the retail business can be volatile, but creating some sort of routine for employees can instill in them a sense of security. This could be a competitive edge among businesses that rely on employees calling in to be notified if they have a shift.

Retailers who take preventative measures to improve employee retention will enjoy less upheaval and consistent productivity.

Learn more about how to create and launch a network-wide program to reward and recognize your front-line staff!

Qarrot is a motivation, communication, and training platform for retailers and franchisers to motivate front-line staff to rapidly improve their sales performance.

Ottawa and Montreal, Canada—April 18, 2016; Qarrot, a motivation, communication, and training platform for retailers and franchisers, publicly launched today following a one-year closed pilot.

Qarrot’s mission is to help retailers increase sales by improving the performance of their front-line staff.  Easy sales data capture and tracking, training and communications capabilities, a catalog of hundreds of e-gift cards, plus proprietary gamification features make Qarrot a great fit for retailers with large, franchised store networks looking to boost their front-line staffs’ sales performance.

Vision Source, North America's largest franchise network of retail optometrists, piloted Qarrot in 2015 before rolling-out a full-scale program in January 2016 to their 4,000 locations across the United States with over 6,000 front-line staff participating on the sales performance platform.

Before implementing their front-line sales performance program powered by Qarrot, more than 60% of Vision Source patients were purchasing glasses or contact lenses from competitive providers and channels, resulting in hundreds of millions in lost sales opportunities.

“With Qarrot Performance, we launched one of the most successful and beneficial programs in the history of our company. Qarrot is my “go to” for incentive award programs," says Walt West, VP Practice Development, Vision Source.

By incentivizing franchise employees and rewarding sales performance, Qarrot helps retailers prevent lost sales opportunities and motivate their front-line to actively promote high margin add-ons . In the United States alone, lost sales opportunities cost retailers over $1 trillion annually.

Over $28 billion in spent annually by U.S. companies on non-cash incentives to motivate their employees. Of this, Qarrot estimates that $8 billion is attributable to retailers for front-line sales performance motivation.

Qarrot has been honing in on organizations with franchised networks in the L-SPARK Incubator. They’re now half-way through the four-month program designed to help early stage SaaS companies execute a go-to-market strategy.

With the help of the organization’s well-connected Directors, mentors and advisers, Qarrot has caught the attention of a large Canadian bank. The platform will be rolled out at all locations to incentivize staff to sell financial products.

About Qarrot

Qarrot Performance is a cloud-based retail sales motivation, communications, and training platform. With clients in both the United States and Canada, Qarrot is already motivating thousands of front-line retail employees at more than 1,200 store locations.

Visit us at Qarrot or email us at info@qarrotperformance.com to learn more!

About L-SPARK

L-SPARK is the only Canadian Incubator and Accelerator that focuses exclusively on Enterprise SaaS and cloud start-ups. With established relationships with key venture capital firms, angel investors, and the investment community at large, the goal is to support a deal flow of fundable Enterprise SaaS startup companies in Canada.  Visit us at www.l-spark.com, connect with us on linkedin.com/l-spark or follow us on Twitter @LSPARKGlobal.