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Quick Tips to Develop a Successful Incentive Structure for Transportation Behavior Change

by Aaron Gaul, UrbanTrans North America

The transportation demand management (TDM) industry is trending quickly towards results-driven programs that are able to effectively generate and maintain non-SOV behaviors.  To do so, many TDM programs employ incentives of various shapes, sizes, and scopes to help generate their program’s metrics. As metrics become more tied to funding, it is key to understand why incentives are effective, key considerations for incentive structures, and finally general types of TDM incentives.

What makes an incentive?

At its simplest: an incentive is a “thing” designed to motivate a person to do “something”. The key word to remember is motivation. When done correctly, a motivated person will do a specific behavior.  For TDM, the goal is to motivate a person to do multiple things from learn about new modes, try new modes, continue using that mode and finally report that mode usage.

Motivation works on two human psychological principles:

  1. Intrinsic desires to do something for inherent satisfaction or pleasure
    1. Factors that increase intrinsic desire include a challenge, curiosity, control, competition, recognition, and/or affinity for a cause.
  2. Extrinsic desires to do something to receive a reward or prevent punishment
    1. Factors that increase extrinsic desires include rewards, access to programs/services/infrastructure, and/or avoiding repercussions.

By understanding these two simple delineations of motivation, TDM programs can quickly assess if their current or proposed incentive structure works towards motivation.  By understanding how to build a program that creates motivation, incentive structures will be budget-friendly, effective and longer lasting.

Not all incentives need to provide big monetary rewards. Nor should all incentives be based solely on a person’s curiosity to ride the bus. The idea is to create a framework of motivational programming and incentives that collectively create transportation behavior change.

Tips to building a strong incentive structure

By carefully considering and continuously analyzing incentive structures, your TDM program can create genuine motivation. When marketed and implemented correctly this will be a main pillar of your program in creating and sustaining new transportation behaviors.  Moreover it will directly impact your ability to achieve programmatic goals.   Core incentive structure advice includes:

Build an unbreakable audience-centered mindset– To effectively tap into the intrinsic and extrinsic motivators, TDM programs must learn to think like their audience.  This can be achieved through small focus groups, surveys, and even secondary research. When we say “unbreakable”, this simply means don’t let external variables dictate the incentive structure. The key is to not build an incentive based on what you think is cool or what your partner organization donated. Also, be sure to not fall into the common trap of defining your target audience as “everyone”.  You’ll know you are doing this if you can discuss what makes your target audience unique or different. We’ll cover how to do this in a subsequent article.

RideAmigos Application: The platform’s incentive functionality allows for instant edits and updates which allows you to feel confident to change/test/pilot your incentive rewards based on your evolving audience centered mindset.

Ask the audience- In keeping with the above tip, one of the most effective methods in developing and maintaining an efficient incentive structure is to ask your target audience. Now this doesn’t mean create a survey that asks “Which do you prefer: $50 cash or a branded baseball hat?”  We know they will say “show me the money”.  Rather ask questions such as which brand of gift card would you be most motivated by? And list a selection of varied brands that your target audience is known to enjoy. While identifying the best reward, you’ll also showcase to your audience that your brand is in line with their lifestyle.

RideAmigos Application: The platform’s survey functionality is not just for measuring behavior, it’s also an easy to use tool that allows your organization to “ask the audience”. Be careful that you don’t ask too much. Survey fatigue is a real thing, so make sure you prioritize and plan your survey efforts.

Tell the audience the value and then close with the incentive– Unfortunately, many TDM organizations place the primary marketing message on explaining the incentive given for the behavior requested.  By doing so, this teaches the audience that the incentive is the most important part of your program. It also only directs the incentive at those already doing the preferred behavior. Finally, when the incentive is removed, the motivation cannot be sustained because the user was not taught the value beyond the incentive.  Thus resulting in what psychologists call “motivational crowding”.  This occurs when the monetary incentives (extrinsic motivator) completely undermines the reason a person would already participate (intrinsic motivator).  For TDM programs, the tip is simple.  Create effective messaging on the value of your programs and services and use the incentives to “close the deal”. For example, “…and on top of all that you have a chance to win 1 of 50 Amazon gift cards each month.”

RideAmigos Application: Your organization’s version of RideAmigos will be customized with messaging and incentive communications.  Be sure to showcase the value of the behaviors and not overwhelm the user with just incentive messaging.

Instant gratification for lasting participation– Game theory has shown that the provision of special incentives for first-time participants can establish long-lasting behaviors that do not require the same level of incentives afterwards.  For example, a TDM program could provide an increased value and/or increased chance drawing for new registrants or registrants that achieve a primary milestone in reporting. The incentive could also take the simple form of providing a branded swag article in return for registration. Finding a budget-friendly method to reward new users will yield a much longer participation rate.

RideAmigos Application: You can query new registrants by date on the RideAmigos platform.  This creates an easy opportunity to reward new registrants on a pre-determined basis.

Take it easy– Incentives need to be easy to understand and realistically achievable.  Many TDM programs will try to combine multiple small incentives into one big message.  Most often the result is the participant is overwhelmed by the number of steps, actions, or options to win—let alone think about their transportation options.  You know you’ve succeeded when you can easily explain the incentive to a person walking at a normal pace past you at an outreach event.  Subsequently, the incentive needs to be realistic—even if the participant does not know it yet.  For example, do not create an incentive program that only rewards the top trip loggers.  While it will feed into a new users competitive intrinsic mind, unfortunately it will result in the participants quick discouragement by an incentive that rewards the extreme participants.  Easy incentives should include options for new behaviors to establish themselves and not just reward the people who do the behavior the best.

RideAmigos Application:  The platform’s incentive functionality allows for complete customization of required effort. Keep in mind that most new behaviors will not be competitive ready at the start.  So when looking to motivate through competition, be sure to embrace the challenge functionality.

Ask “yes” questions- Social psychology has revealed that when a person is asked a “yes” or “no” behavioral question, the follow-through by the person is exponential when compared to other requests that do not require that form of answer.

RideAmigos Application:  The platform’s user-registration page is not meant to be customized, rather its simplicity is what makes it so effective.  “Yes” questions can be incorporated into the marketing materials distributed to incentive program targets.

Incentives are like fruit– Incentives can be your program’s super fruit and result in unexplainable benefits.  But just like any fruit, they can and will go rotten. Incentives that generate a huge return-on-investment this year may be outdated in 15 months.  For example, a gift card to Amazon may be the most efficient and effective incentive for your hypothetical “Millennial” target audience in 2015.  But next year, it might be Visa gift cards or something not even invented yet. Build in opportunities to refresh incentives on a regular basis (every one to two years). This will also help to prevent “motivational crowding” as noted above by reminding the participant there are more reasons to do this behavior beyond the original incentive.

RideAmigos Application:  The platform’s incentive functionality is designed for the development, launch, and measurement of FRESH incentives.  By allowing your organization easy admin functions, there is no excuse for rotten incentives!

Embrace your inner dork, and use neuro-economics– Insights from this emerging field are providing TDM programs with leading insights into how the human brain interprets value.  This can greatly impact your incentive structures by ensuring you are not providing too much/too little incentive and by identifying when your incentive is most appealing.  For example, the value for a free transit pass given to an employee at the start of a job or after just moving into a new home has been proven far more effective for transportation behavior change when compared to offering outside these moments.

RideAmigos Application:  The incentive tips listed above will all work towards helping your organization apply better neuro-economics.  Use the platform to measure the success of your attempts at better neuro-economics. From registration rates, user-engagement levels, trip-log results, carpool matches, and other metrics all work together to showcase if your incentive structure is accurately motivating your target audience.

What are popular TDM incentives?

Armed with a solid understanding that it should motivate and key considerations to doing so, you can now tackle what form of incentive. Incentives have been applied to TDM programs for decades.  However recent technology advancements provided by RideAmigos now allow for much more effective and efficient incentive programs. Therefore your incentive structure should not only build on what’s been done in the past but what should be done today.  When thinking through the variety of incentives out there, the following provides a basis starting point of types of incentives.

  • Earned reward for individual milestones related to specific behaviors
    • This takes many forms including:
      • Free article of branded material (mug or hat) in return for a specific action.
      • Food in return for a specific behaviors
      • Reserved parking space for specific behaviors
      • Monetary or merchandise/gift-card for specific behaviors
    • Chance reward for specific behaviors
      • This would take the form of winning a valued good for specific behaviors. Chances to win and value/form of good vary based on TDM program
    • Benefits for specific behaviors
      • This often takes the form of:
        • Support services such as emergency/guaranteed ride home program
        • A discount/coupon membership for area businesses
        • A discount transit pass or free Bikeshare membership
        • Acknowledgement in the company newsletter
      • Referral rewards for existing members to encourage their friends/colleagues to sign up as new members

One last thing, the best incentive structures will are not built from a recipe but rather prepared with specific culinary skills. By keeping these tips in mind when developing, refreshing, or maintaining your incentive structure, you will prepare a masterpiece for your organization.

Stay tuned as future articles will showcase additional tips, keys, and advice on how RideAmigos can be maximized to implement your incentive structure as well as other marketing strategies.

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