Employee engagement should be a top priority for any business that wants to be successful – and for a good reason. Engaged employees are not only more productive but also more likely to stay with the company long-term. According to a Gallup study, companies with a highly engaged team outperform their peers by 147% in earnings per share, while also enjoying a 21% increase in profitability and a 41% reduction in absenteeism.
And for that purpose, internal company stores are a great tool – they incentivize employees for performance and make them feel more valued (as they should be). But what makes a great reward choice for such stores? Do rewards have to be physical or digital? If they are digital, what exactly are we talking about – discount codes, subscriptions, or else?
These and many other questions we are going to answer in this article – we will dive into the technical aspects of integrating digital rewards into your stores, tell all about different reward types, how to select the best ones, and what metrics to track your success with.
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Understanding Digital Rewards & Redemption Programs
Digital reward redemption programs are structured online systems that allow employees to earn non-physical rewards (points, tokens, vouchers, subscriptions, etc.) based on certain predetermined criteria. Unlike traditional rewards or cash bonuses, digital rewards tend to offer greater flexibility and can be automated for ease of management.
For internal company stores, digital rewards and redemption programs are particularly useful for boosting employee motivation and team morale. Moreover, if selected right, the rewards can be tied directly to company culture, strengthening it.
Various Types of Digital Rewards
While it’s important to select the right type of reward for your store, don’t forget that you can always introduce a well-balanced blend of more than just one. Here’s a technical breakdown of various options:
Points-Based Rewards
A points-based reward system is perhaps the most adaptable type of digital reward, especially for larger companies. In this system, employees accumulate points based on a variety of actions that can be later redeemed in the company store for branded merch, tech gadgets, or even experiences like paid time off or travel vouchers.
However, setting up a good points-based system needs a robust algorithm that allocates points proportionally to each action, so that bigger achievements are celebrated accordingly.
Digital Gift Cards
Digital gift cards offer employees flexibility in selecting their own rewards without overcomplicating the system with points or tiers. These can either be used within the company store or even extended to partner vendors, giving employees a broader range of choices. What’s more, gift cards can be deployed as one-off rewards for specific achievements, or they can be part of a tiered recognition system (e.g. employees get higher-value gift cards for reaching certain milestones).
Remember that digital gift cards should ideally be available for immediate use upon issuance – there’s little worse for an employee than to have delays in getting their reward.
Discount Codes and Coupons
Discount codes and coupons can be effective for encouraging very specific behaviors – you only need to make sure that different codes can be tiered based on those specific behaviors, as well as employee level and seniority.
For example, you could offer a 25% off code to someone who reaches a quarterly sales goal, while a smaller 10% discount might go to a monthly sales achiever. And don’t forget that expiry dates and usage limits (one-time use versus multi-use) should also be built into the system to prevent misuse.
Cashback Rewards
Though more commonly seen in consumer-facing loyalty programs, cashback rewards can also be utilized in internal company stores. This way, employees get a percentage of their purchases as credit, which they can then use toward future purchases. You only need to make sure that cashback is available for both real money and points-based transactions if your company store doesn’t see too much actual revenue coming in.
Subscription Services
Subscription-based rewards of various kinds are also considered high-value rewards – for example. employees can earn access to a quarterly curated box of company-branded goods or receive premium subscriptions to services like wellness apps, learning platforms, or streaming services.
The challenge here, however, is making sure of smooth and timely fulfillment, which could involve various partnerships with third-party vendors.
4 Core Benefits Of Integrating Digital Rewards in Company Stores
Now let’s break this down into specific areas where digital rewards can make a real difference for your corporate environment:
Instant Gratification
One of the biggest pros of digital rewards comes from their “instant” nature – unlike traditional rewards that may take longer to ship, digital rewards can be redeemed at once. This instant gratification taps into the psychology of motivation through quick and tangible reinforcement for certain achievements.
Better Customization
Digital rewards also tend to offer more room for personalization than physical items. While standardized physical rewards might not appeal to everyone, their digital counterparts allow employees to choose something that fits what they want – a specific subscription service, a gift card for a preferred retailer, or an online course.
Lower Administrative Overhead
Physical rewards need significant logistical efforts such as inventory management and shipping. Meanwhile, digital rewards drastically cut down on these, as administrative tasks such as tracking points, managing inventory, or even handling refunds can be largely automated.
This also lowers costs associated with fulfillment, which can be redirected into offering better or more varied rewards.
Stronger Company Culture
On top of that, you can integrate your digital rewards into broader employee recognition or incentive programs, helping to build up your company culture. For instance, if your company is explicitly physical and mental health aware, you can offer digital rewards such as meditation app subscriptions or online fitness classes.
How to Choose the Right Digital Rewards for Your Company Store?
Selecting the right digital rewards essentially means understanding what your team wants – and giving them that. How do you do that? Let’s have a look.
Segmented Employee Survey
The most logical thing to do when you want to learn someone’s opinion is to ask them – and employee surveys are the most common way of doing so. However, remember that not all employees are motivated by the same types of rewards, so mapping out preferences based on job role, age, and even department is key. For example, junior employees might prefer rewards such as e-learning subscriptions or discounted travel vouchers, whereas more senior employees might appreciate rewards like exclusive professional memberships.
Analyzing redemption trends over time can also offer insights into which types of rewards are most popular across different groups – but more on that in our next section.
Business Goal-Centered Rewards
Rewards should ideally align with the broader goals of your company. If your focus is on boosting professional development, then offering digital rewards tied to online learning platforms or industry certifications makes sense. Alternatively, if you want to encourage work-life balance, rewards like fitness app subscriptions or virtual wellness sessions will have a greater impact.
Scalability of Reward Offerings
Your reward system must be able to scale with you without incurring excessive costs. That’s why points-based systems are a popular choice – they allow for scalable reward distribution whilst avoiding frequent manual adjustments. However, to prevent system abuse or over-redemption, it’s essential to set appropriate thresholds for earning and redeeming points.
Variety and Frequency of Rewards
Equally important is how often you believe employees can and should earn and redeem rewards. If you make the system too rigid or if it takes too long for employees to gain enough points for a meaningful reward, beware that their interest may wane. So try to offer a mix of low-threshold rewards alongside high-value options – smaller ones like coffee vouchers or movie tickets are for day-to-day achievements, while larger ones (travel packages or professional development courses) are for longer-term accomplishments.
Key Metric to Track the Effectiveness of a Rewards Program
Lastly, you also need to know what metrics to track to see whether your employee rewards programs are successful. Keep in mind that those will differ from typical e-commerce metrics since our main goal is not to produce revenue, but to make our team happy:
Reward Redemption Rate
One of the simplest yet most telling metrics, it measures the percentage of employees who actively use their earned rewards. A low redemption rate may signal that the rewards on offer aren’t too attractive or that the redemption process is too complicated.
At the same time, remember that the redemption rate alone doesn’t tell the full story – segmenting redemption data by employee group, tenure, or department can give you even more insights.
Program Participation Rates
While redemption rates give insight into how many people are using rewards, participation rates tell you how many employees and managers are actively earning and distributing points in the first place. This metric could indicate a lack of awareness about the company store program, a lack of interest from middle management, or that the points-earning opportunities aren’t well matched with employees’ activities.
Time to Redemption
Another valuable metric is how long it takes employees to redeem their rewards once they’ve earned them. Tracking this across different reward categories can help you understand which types of rewards employees see as more valuable and which ones may need to be replaced with more desirable options.
Satisfaction Scores and Feedback Loops
Finally, satisfaction surveys and feedback loops can provide qualitative data to complement the above quantitative metrics. So make sure to regularly survey employees about their experience with the company store program and find out what areas need improvement – usability of the platform, the variety of rewards, or even how the reward-earning system is structured.
Conclusion
Integrating digital rewards into an internal company store is fundamentally a clever idea – it still provides your team with genuine gratification while not suffering from the drawbacks of physical rewards (shipping delays, inventory management, etc.). However, doing so requires more than just attaching a points system to your platform – you want to have a data-driven approach to it in order to provide your team with what they really want.
And if you are only considering setting up your own company merch store – let’s get to work! BrandScape will provide expert assistance in making your gift shop one of the biggest positives in your employees’ corporate life experience.
