Money Motivates Behaviour Change

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Companies can change people’s behaviours in order to benefit society and the environment – it’s just a matter of knowing how to do it.

Driving_Social_Change_ExternalNBS’s Systematic Review on Driving Social Change reveals three key components to effectively change people’s behaviour: while just one of the three components, motivation strongly influences whether people will make the choice to alter actions, rethink decisions and possibly change their lifestyle.

Engaging various stakeholder groups - employees, consumers and shareholders – can sometimes be more effective with the use of incentives. For example, goal-setting empowers employees to meet their targets; positive feedback increases engagement in the process; and public recognition for good actions is effective across several stakeholder groups, all of which present little to no cost to a firm.

But nothing quite motivates like money.

Consider Financial Incentives

Firms can influence and encourage people to make greener decisions by incentivizing green products, services and programs. For example, a firm might provide rebates to people who buy energy-efficient appliances/cars. Similarly they may offer discounts to customers who return or reuse products.

Weaving stakeholders into the very fabric of your green operations can also yield positive results. In an example from Denmark, a contentious off-shore wind energy development project was more easily accepted by locals when a financial reward was introduced: the scheme promoted community-based energy businesses by offering tax-free shareholdings to people in the local area, along with a government-guaranteed return on the shares.

Indirect Financial Reward

In addition, studies show many initiatives offering the indirect promise of a financial payoff to motivate behaviour change can be effective. For example, households with energy-monitoring devices tend to use less energy, which may be motivated by financial or environmental benefits. An industrial symbiosis initiative both reduced waste and added value by bringing together organizations that could use each other’s waste products. Also, some organizations, with an eye on financial returns, adopt sustainability practices that are publicly visible or recognized (e.g. through certification).

Drawbacks to Motivating with Money

The disadvantage of using financial rewards is that their effects are not always predictable. People think about their behaviour and reward in light their goals, self-perceptions, fairness and the opinions of others. For example, because individuals care about their public image, they might not want to be seen as adopting a particular behaviour in exchange for a monetary reward. In such circumstances, public recognition or positive feedback may be acceptable alternatives. Behaviour change is more likely to be lasting when people rationalize that they are changing for their own reasons, not for external rewards.

Nevertheless, strong evidence supports the idea that financial incentive is effective at motivating behaviour change, and can encourage positive environmental action among consumers, employees and shareholder.

Case Study: LoyaltyOne

We’ve seen that motivating with money can be an effective way for firms to elicit pro-environmental behaviour, but social change is also possible when financial reward is involved. Here’s how one company encouraged health behaviour change among clients, taken from NBS’s Executive Report on Driving Social Change.

Motivating Patients with Reward Points

In 2011, pharmacy retailers in Canada were looking for new revenue streams to offset losses in prescription dispensing fees. With Canadians showing an increasing emphasis on healthy living, there was a clear opportunity for pharmacies to improve customer loyalty and drive in-store sales while improving people’s health outcomes.

The Solution

Working with Canadian pharmacy chains Safeway and Lawtons Drugs, rewards marketing company LoyaltyOne developed a pilot program called WellQ. “WellQ is a loyalty program that uses personalized content, regular outreach and financial incentives to encourage healthy behaviours,” said Peter Meyers, Associate Vice President, Product Development and Innovation for LoyaltyOne.

How it Works

During the one-year pilot, participating pharmacies invited patients with chronic conditions such as high blood pressure, high cholesterol and diabetes to register for the WellQ program. Program participants received in-store newsletters, customized monthly emails, and customized websites with recipes, quizzes and resources specific to their medical conditions. Resources included the Hypoglycemia quiz for diabetic patients and online tools such as Metabolic Calculators and Nutrition Label Readers.

The key to the program, though, lay in motivation: “Many programs exist to educate people and support them in making healthy choices” said Meyers. “But those programs often assume the patient is self-motivated to change his or her behaviour on their own.” The WellQ program awarded members AIR MILES® for each of their healthy behaviours: registering for the program, refilling prescriptions on time, testing their blood pressure, completing online polls or quizzes, and making healthy purchases.”

The greatest challenge, Meyers admits, was managing all the customized content: “We literally produced thousands of emails during the course of the pilot. The burden of packaging and editing content such that it met each customer’s health profile was huge – and that was only in the case of three health conditions.

Going forward, we plan to provide the service for a much broader range of medical conditions and general health topics, such as family health, lifestyle choices, purchasing healthy food, financial health, etc.” To provide more resources on a broader range of topics, the company plans to build a dynamic content management platform. By automating the process, they will ensure each patient receives customized information without LoyaltyOne having to manually produce each message.

The Results

The Canadian pilot of WellQ reached nearly 10,000 people with information about healthy living and disease management. The program increased prescription renewals four per cent for participating pharmacies – a measure of customer loyalty that translates into significant revenue for the stores. And participating stores also experienced an eight per cent increase in the purchase of items other than prescription medication.

This piece has been excerpted from NBS’s Systematic Review and Executive Report on Driving Social Change (2013).