To Get Workers to Save, Think Like a Retailer

Want to get workers to save more and make positive behavioral changes? Take a cue from major retailers and offer a rewards program.

Liz Davidson, CEO and founder of Financial Finesse, and Linda Robertson, a financial planner for the firm, made the suggestion on a webcast Wednesday.

Rewards trigger the release of dopamine and can motivate behavior, Robertson said. “Retailers have successfully discovered this,” she said, pointing to frequent flier miles, coupons and special sales as examples of how retailers trigger dopamine releases in individuals.

Davidson noted that dopamine is what contributes to habit development and addiction. As a habit forms — whether a bad one, like gambling, or a good one, like saving — and dopamine is released, the individual needs more to get the same feeling.

“While the habit center is small and deeply embedded in the brain, it’s incredibly powerful. If you can get the reward center triggered enough times, you’re ultimately transitioning something from a positive behavior to a positive habit, and a habit is something that’s painful not to follow through on,” Davidson said.

To apply those principles to a financial wellness program, employers should establish a program that is ongoing. “I guarantee every single retailer has ongoing meetings to figure out how to make their customers lifetime customers,” Davidson said. They want customers to come back often; similarly, employees should be saving often, she said. “That’s what you need to do with education. You need to make it ongoing and self-reinforcing so that employees are using it habitually.”

Employers should also offer rewards and incentives for good behaviors. Davidson referred to retailers that use punch cards to reward a customer with a free item after so many visits.