The Truth About What Really Motivates People
What is it that really motivates people? Is it money? Or is it the Filipino version of the so-called “American Dream?” While this concept is highly individualized, this “dream” always relate to having a successful, comfortable life through hard work.
American author, Dan Pink, talked about the surprising truth about what really motivates people at the Royal Society for the encouragement of Arts, Manufactures, and Commerce (RSA). He broke down the results of a study conducted by Massachusetts Institute of Technology (MIT) researchers, where they found that monetary incentives provided the expected outcomes, considering that the work is predictable, repetitive or mechanical.
However, when the work involves basic cognitive skills or if it requires more complex thinking or creative process, the people who were offered the highest monetary incentives performed the worst. This is rather odd since money is a great motivator in almost any industry. But, the MIT study was replicated in other countries, including third worlds, which they got the same results.
These incentives for employees are widespread in most companies. The management often ignores the low performers and rewards the top performers will all sorts of incentives.
For instance, in Accenture in the Philippines, top performers are invited to a quarterly TED Talk-like event called Stories of Tomorrow, where outside experts in their respective fields talk about their work, motivation, trials, and successes. The incentives here may not be monetary, but it taps another powerful motivator which is prestige.
Regarding customer rewards, almost every establishment now offers a program. It could be as simple as a stamp card that customers can fill out to earn a free drink or product afterward.
Customer rewards can also be as expansive as the Coffee Bean & Tea Leaf’s Swirl Card that earns you points with each coffee or food item you buy. Earned points can be used to buy your next cup.
The same point system scheme comes in the widely used SM Advantage Card that you can maximize in SM’s extensive product line. But, what really motivates people in both sides of the fence?
What motivates people in the workplace?
In Pink’s RSA presentation, he mentioned that when a task gets more complicated or when it requires some conceptual creative thinking, the concept of “higher rewards, better performance” doesn’t work. When it comes to these “creative” types of businesses, you can still use money as a motivator by taking it off the table. Weird, right? Here’s why.
Today’s workplace is mostly dominated by the misunderstood millennials who can actually make and break an organization. This demographic has a broad range of skillsets that, if tapped effectively, can lead to breakthrough innovations. One way of tapping into this goldmine is to make sure they are well paid, which is a better form of incentives for employees.
If employees are compensated well, they won’t spend much time thinking about other ways to earn extra cash or even think who makes more than them. Energy will be spent on work or improving, which, in turn, will lead to increased productivity and better results.
In a way, taking away the issue of money or making money incentives more of an “extra perk” than a “badly wanted need” enables employees to focus on the non-monetary rewards like prestige, fulfillment, engagement, and maybe some well-earned bragging rights.
Keeping employees engaged results in a better employee retention. In a 2015 research by global performance-management consulting company, Gallup, productivity surged by 21 percent if employees are engaged.
What drives customer retention?
An Accenture study estimated that the 80 million millennials in the U.S. alone has a combined spending power of approximately $600 billion. The multinational giant believes that the millennial’s spending power will reach its peak force by 2020, with an estimated combined expenditure of $1.4 trillion every year.
The millennials account for nearly 30 percent of total consumer sales per year, and businesses are clamoring to tap into this demographic of big spenders by tweaking their products, marketing, and even their entire business.
Many businesses have a current love-hate relationship with millennials as both employees and customers. However, as more and more millennials join the leadership teams and rule the workforce, businesses are learning to embrace the misunderstood powers of this “fickle” demographic.
As consumers, the same Accenture study concluded that Millennials are the same as other shoppers among older and younger demographics by giving them what they want now or lose them fast.
Just like in Pink’s RSA presentation, it’s not always the monetary incentives that fuel their passion for spending. Here are some tips that can help businesses in terms of customer retention.
1. Offer a seamless shopping experience.
Once again, engagement is at work. Millennials shoppers are highly connected, and they want the same ease they get from online shopping to be present in the physical stores.
The same Accenture study found that 68 percent of millennial shoppers demand a seamless shopping experience. Consumer engagement can help you increase customer loyalty.
2. Millennials remain brand loyal as long as they are treated right.
Contrary to the common belief that millennials are fickle-minded, Accenture found that 95 percent of this shopping demographic wants brands to “court them” or give them the royal carpet treatment in the form of personalized promotions or loyal customer discounts to name a few.
Once again, monetary incentives don’t seem to work in this case. Rather, prestige is at play.
3. Talk to Millennials in their “language.”
“The average millennial spends 18 hours a day consuming media—often multiple forms at once. These forms are entirely different from those favored by prior generation.
For example, the average millennial checks his or her smartphone 43 times and spends 5.4 hours on social media per day. They may still be watching sports and movies – but that only makes up 14 percent of media viewing,” wrote entrepreneur staff Kate Taylor on Forbes.com.
In the 2015 Elite Daily Millennial Consumer Study, findings showed that 33 percent of millennials rely on blog recommendations before purchasing a product or service. About 62 percent said they are more likely to be a loyal customer if a brand talks to them or engages them in social media.
This Internet habit is driving many companies to ramp up their digital advertising campaigns to create and keep conversations with millennials in their natural habitat. The key is to engage your customers in an online conversation.
However, everyone knows the make-and-break powers of social media. So, thread carefully, as online millennials can be your best brand ambassadors or your most aggressive brand destroyers.
Money is a great motivator for employees and customers, as long as you know how to present it. Nonetheless, there are also other motivators that drive people to perform better such as purpose, engagement, and prestige.
Knowing how to use each of these motivators can do wonders for your organization.