On Goodyear and AwardperQs®

John was an opportunist.

In 1995, a BIW sales rep calling on Goodyear told John Jack that his contact, Tom Gravalos, wanted to run a formalized study on awards using his dealers. Tom had two reasons: first, he needed data for his MBA thesis and second, he wanted to persuade his bosses that it was time for a different approach. John was – as always – ready.

The two of them quickly designed a simple scheme of stack-ranking the Goodyear Tire stores in order of sales, then splitting them – alternatively – into two groups: the reps in one group would earn $25.00 for every Aquatred tire they sold. The reps in the other group would earn the equivalent of $100.00 in AwardperQs for every set of 4 Aquatred tires they sold.

The 90-day program results were clear and persuasive: the AwardperQs group sold more tires than the cash group by a long shot. Goodyear became a long-term client of BIW's, Tom earned high marks for his thesis, and John wrote an industry-changing paper he called "The Trouble with Money."

“I knew the outcome before we got started,” he said. “Those guys selling tires never got to treat themselves to something really great.” John was not relying on hindsight bias in this case: he was dead right. He knew how the reps would perform with non-monetary rewards and that’s just what happened.

Duke University professor Dan Ariely, PhD[1] was familiar with “The Trouble with Money,” when Dan and I first met in 2007. Dan is the author of several New York Times bestsellers and was surprised the incentive industry had not done more of what John did with Goodyear.

In an interview with Inc. Magazine in 2013, Dan praised Tom and John’s approach by noting, “Their plan was simple and elegant." Dan went on to describe how the paper used field research to confirm what he had already found in the laboratory: "It turned out that the tangible-reward group increased sales by 46% more than the monetary-reward group. One explanation is that we can visualize tangible rewards which creates an emotional response. Money, on the other hand, is not accompanied by images as often and lacks the emotional pull that tangible rewards have, so [it’s] less effective in motivating employees[2].”

[1] Dan Ariely, PhD: https://en.wikipedia.org/wiki/Dan_Ariely

[2] Ariely on the Goodyear Study from Inc. March 2013: https://www.inc.com/thebuildnetwork/the-incentives-that-motivate-best.html