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Mental Accounting Mechanism: How Monetary Rewards Shape Emotions and Brand Relationships

FINANCEMental Accounting Mechanism: How Monetary Rewards Shape Emotions and Brand Relationships

Imagine a customer who wins a cash prize in a contest. What do they do? They think about their dream vacation, a new gadget, or maybe a romantic dinner at their favorite restaurant. A moment of joy, but… suddenly, the money lands in their bank account. Before they know it, it’s gone on bills, grocery shopping, and other daily expenses. Instead of joy and excitement, there’s a feeling of a missed opportunity. Why does this happen? It’s due to a mechanism called “mental accounting.”

This principle of financial psychology helps us understand how people treat different forms of rewards and why some of them are more enjoyable than others. It’s also an important hint for companies looking to create promotional campaigns that evoke emotions and leave positive associations in the memory. How can the mental accounting mechanism be applied in marketing and sales?

By understanding this concept, companies can not only motivate customers more effectively to participate in promotional campaigns but also build long-lasting relationships based on positive emotions. And when new technologies, such as artificial intelligence, are added, the possibilities for personalization and creating unique experiences become virtually limitless. In this article, I’ll show you how to consciously use the benefits of mental budgeting.

Does the form of the reward always meet the recipient’s expectations? Sometimes, what seems perfect at first doesn’t bring satisfaction. An example? The contest organizer gives the winner their prize via bank transfer. What will the recipient spend that money on? Will they remember this moment for long? Will they “code” the brand of the organizer or the campaign in which they received the reward?

Financial decisions are influenced by the phenomenon of “mental accounting.” This also affects how rewards are perceived. The concept of mental accounting was developed by Richard Thaler, a Nobel laureate in economics. The mechanism describes how people manage their finances on a psychological level. Thaler noticed that each of us creates “mental accounts,” where specific amounts are assigned to different purposes. So, we have funds for daily expenses, savings for the future, as well as budgets for vacations or small pleasures.

The key feature of mental accounting is assigning specific amounts of money to different purposes in our minds. For example:

  • Money set aside for children’s education won’t be used for a weekend getaway (it has a specific purpose).
  • Funds for bills and expenses won’t be spent on entertainment (they are a primary need).

When someone receives cash or a regular bank transfer, it literally blends with the rest of the funds for everyday expenses, especially in the case of smaller winnings. The result? Instead of joy, frustration arises because the reward, which was supposed to be special, turns into something quite ordinary, often even unnoticeable. To avoid this, it’s worth opting for different forms of monetary rewards. For example, prepaid cards or digital eVouchers, which allow for branding and personalization, are available in the market. Cash or a bank transfer doesn’t offer such options. This form immediately signals that the funds can be spent on something special, something extra, which significantly increases their emotional value.

A study called “The Ideal Reward” by IRCenter, commissioned by Pluxee Polska in 2024, confirms that customers appreciate monetary rewards that give them complete freedom of choice. As much as 72% of respondents prefer these types of rewards because they can decide for themselves what they want to buy. Additionally, 63% of respondents say that this form of support is important for their household budget, and 53% appreciate the flexibility of payments, allowing them to use the reward anywhere and anytime.

A reward in a contest, lottery, or loyalty program that has a predetermined purpose, such as a vacation with a travel agency, a massage, or household appliances, will only attract a limited number of customers. After all, not everyone needs that kind of reward. When receiving a monetary prize in the form of a card or eVoucher for any kind of pleasure, the winner can use the prize for, for example, an organized trip with friends, a dinner with family, a visit to an amusement park or cinema, or shopping that brings them joy. This solution eliminates the risk of a wrong choice.

An appropriately personalized monetary reward, for example, graphically branded with the organizer’s logo or a promotional campaign slogan, is not just a specific amount of money. It’s the emotions connected to it—joy, pleasure, a sense of uniqueness, and the opportunity to fulfill small dreams. Prepaid cards or eVouchers have a real impact on the recipient’s relationship with the brand. The latest studies show that:

  • 66% of consumers admit that participating in contests and promotional campaigns helps them better remember the brand. This proves that an attractive reward becomes a vehicle for positive associations.
  • Three-quarters of participants in promotional campaigns declare greater loyalty to the brand that organized the campaign and offered the prizes. This is a clear signal that a well-chosen reward builds long-term relationships.
  • 72% of respondents prefer monetary rewards because they allow for freedom of choice—the recipient decides what to spend it on.

In conclusion, paying attention to the mechanism of mental accounting and using monetary rewards that won’t blend into the funds in an account from a salary allows companies to create positive experiences and build long-term relationships with their customers.

Modern technologies, such as artificial intelligence (AI), open entirely new possibilities for companies in the area of reward and promotional campaign personalization. Analyzing purchasing histories, customer preferences, or their online activity allows for the creation of ultra-personalized campaigns that directly target the recipient’s needs.

For marketers, this means a revolution in how promotional strategies are approached. Instead of traditional, homogeneous campaigns aimed at a wide audience, it’s now possible to create precisely tailored offers. The use of AI allows for real-time monitoring of consumer actions, analyzing preferences and purchasing habits, which enables faster responses and better matching of rewards to customer needs. This helps companies build deeper relationships with their audience, leading to greater loyalty and engagement in promotional campaigns.

The trend of hyper-personalization aligns perfectly with monetary rewards, which give the winner the freedom to spend them according to their individual needs. Additionally, these rewards can be customized to fit the brand’s key visual, present the organizer’s logo, or feature slogans that the recipient can remember.

The mental accounting mechanism emphasizes that the form of the reward is crucial for its perception. In a world full of mediocrity, emotions and a flexible approach may be the key to success. That’s why it’s worth investing in rewards that bring joy and remain memorable. After all, a good reward is not just its material value, but the experience it creates, which stays with the recipient for a long time.

Justyna Klimuk, Marketing Manager at Pluxee Polska

*IRCenter on behalf of Pluxee Polska, study: “Rewardomania, or Promoting by Rewarding,” October 2024.

Justyna Klimuk

I am a leader with 17 years of experience in marketing and sales. In my daily work, I use skills in strategic planning, transformation of structures, and process optimization. At Pluxee Polska, where I’ve been working for 5 years, I am responsible for managing a category of solutions supporting marketing, sales, and the development of business partnerships and consumer business. I pay a lot of attention to building profitability of solutions and relationships with clients and business partners. I enjoy developing modern digital services, including solutions like virtual cards and the Pluxee eVoucher platform. Previously, I worked in the ICT industry for companies such as Microsoft, ProofHQ, and Sage.

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