One reason for this misconception is based upon outdated perceptions of promotional fulfillment. Today, many fulfillment providers are more in line with Amazon than with old school promotion fulfillment from the 1980s.
Another misperception about virtual rewards is that they are only for younger audiences. While this may have been true at the beginning of the decade, today nearly all consumers, young and old, are more comfortable using digital rewards, such as gift cards and virtual prepaid cards in their everyday lives.
So when should a marketer use a virtual reward?
- Low value –The economics of digital rewards make it far easier to issue lower dollar amounts economically for a promotion. So if the campaign’s reward is less than $20, using a digital reward is a good option.
- Instant winner scenarios – When speed and instant gratification are key aspects of the campaign, virtual is an ideal option. If physical rewards are required, use a hybrid approach that includes digital communication to get the consumer excited about their reward’s arrival.
- The brand is mobile – If a promotion must be 100% mobile in order to stay on-brand, as is often the case with telecom and cable companies, sticking with a virtual reward is important to link to the brand experience.
- Audience skews younger – While most consumers are now comfortable with virtual rewards, younger audiences by in large prefer virtual rewards. In these cases, there will be more of an expectation that their reward will be virtual as younger people often do most of their shopping using digital mediums.
When choosing when to use virtual rewards, remember these two important factors, don’t pigeonhole the consumers and above all make claiming the reward simple and effortless. Creating a complicated or difficult process at the culmination of a promotion can ruin goodwill and lead to negative consumer experience.
Kevin Palmstein is a Vice President of Product, Alliances and Marketing at YA. He works with clients everyday to design custom rewards programs.