Thursday, January 20, 2011

Timing Rewards and Energy Savings Payback

Interesting post by Seth Godin today. Can homeowners reconcile long-term payback re: green upgrades? Will the savings in energy costs offset the initial expenditures soon enough? What realistic incentives do homeowners have?

Timing rewards

We can agree that promising a three-year old a new car when he graduates from college is probably an ineffective way to get him to stop sucking his thumb.

As we mature, it gets easier to trade satisfaction now for a prize later. However, the more risk involved in getting the prize, the less we value it. Frequent flyer miles, for example, began with the promise that if you flew an airline regularly for months (or even years) you'd get a free flight. The airlines oversold the miles and undelivered on the free flights, though, so the reward started to lose its perceived value--too much risk that you wouldn't get the prize you wanted. Many of the frequent flyers I know have ceased to 'save up' and now use their miles for upgrades, moving the benefit closer in time.

One of the many things the web is changing is our focus on now. It's increasing. Offering a reward in three months just isn't going to cut it. If you want me to get out of bed or brush my teeth or click on your link, there better be something waiting for me on the other side.

 

- Seth Godin