Q: How should I set my goals for my incentive programme?
Q: What should my strategy be?
Q: How should I measure progress?
Q: What would be the best awards?
Q: How should I promote the programme?
Q: Will I need help to run the programme?
Q: How do I evaluate the results?
Q: How should I set my goals for my incentive programme?
A: As you attempt to identify your objectives, keep in mind the importance of linking them to market conditions and your company’s overall goals. As you start to form specific objectives, make sure they are workable. Your goals should have five characteristics that make them SMART.
They should be:
SPECIFIC. Choose just one or two clearly focused goals, so programme participants can channel their efforts effectively. For example, instead of saying, “Increase sales,” state your goal as “Increase sales by 15 percent between specific dates such as: September 2004 to December 2004.”
MEASURABLE. Be sure your goals involve quantifiable activities that can be measured easily. As an example, some ways to quantify success include tracking a salesperson’s progress by measuring the increase in sales or profits.
ATTAINABLE. It’s tempting to set the bar high, hoping to achieve dramatic improvement and excite everyone in the process. Overly ambitious goals can backfire and can seem unattainable to the participants in the programme and demoralize them. To create realistic goals, take past history and preset conditions into account.
RELATED. To be meaningful and have a long lasting impact, the goals you set should fit within the overall objectives of your company. This means checking that your goals are in step with your company’s direction. Is cutting costs a priority? Or is the company investing resources in the hope of achieving long-term growth and competitiveness?
Consider too, official company policies concerning refunds, rebates and repairs. An incentive programme that gives a R100 rebate with a particular purchase could fall flat if your company offers a full refund if the customer is dissatisfied with the product. Under these incompatible conditions, the particular item could be purchased, the rebate sent, and the purchase price refunded.
TIMED. Take into consideration any seasonal highs and lows that occur in your business during the period chosen for the incentive.
To pin down your goals, gather a few colleagues for a mini-brainstorm session. Select participants who can bring a fresh perspective and know of current conditions in the marketplace, or target audience, of which you are not aware.
Q: What should my strategy be?
A: First outline the participants who are involved in your product or service and list their functions and take note where each falls in the distribution channel. Assess how much you can realistically expect from them based on their level of involvement and other factors, such as legal restrictions on distributorships. These facts will help you target the people who need to be motivated.
Once you identify the participants, choose the method of motivation. Strike a balance between an award that will charge people up and one that fits comfortably within your budget. To find that middle ground use productivity ratios. Calculate the percentage of your work force that produces most of your volume – do not automatically apply the 80/20 rule which assumes that 80 percent of your volume comes from 20 percent of your work force. You might decide on a tiered award system, or a plan that offers the most desirable awards to your top 25% performers.
Decide how progress towards goals or improvement in desired behaviour will be measured. Select a simple yardstick, such as accounts opened, number of clients serviced or Rand amounts sold. At the same time decide how often progress will be recorded and reported. A three-month programme might call for updates every two weeks, while a year-long programme might require announcements to be made every six weeks or so. Either way, do not make the interval between the reports too long. The participant’s enthusiasm can decrease dramatically without frequent reminders of their progress and where they stand in relation to their competitors for the awards.
Q: How much should I spend?
A: There are some reliable indicators to follow when budgeting for your incentive programme.
The first is whether your programme is open-ended or closed-ended. Open-ended incentive programmes tend to generate higher return on investment (ROI). Budgetary limits can be built into the programme, but you won’t know the total costs until the campaign has ended and the number of winners determined. Closed-ended incentives allow you to establish a firm budget at the start. Knowing the maximum costs up front will make you and your accounting department happy.
From a budgetary standpoint, closed-ended incentives would seem to be the smarter choice. Not so fast though: Closed-ended programmes can fall short when it comes to motivating. The participants might reason that they have little chance of finishing in the winner’s circle and think, “Why even try?” Closed-ended programmes work best when used for a group of top performers with comparably competitive track records.
Q: How should I measure progress?
A: In a sales incentive programme, measuring progress is easy since success can often be quantified in sales increases or ROI. Yet simple sales increases might not always be your aim. Depending on your company or division's priorities, you might choose a measure from a list that includes:
- General profits from sales.
- Rand volume increase over previous year.
- Number of new customers/sales calls.
Q: What would be the best awards?
A: The first rule is: Do not assume that the awards that appeal to you will hold the greatest lure for others. Some people appreciate an award they can proudly display, while some are motivated by travel.
Incentives usually fit into one of two categories:
Recognition awards include anything from a cap or jacket bearing the company logo, to a prime space in the parking lot, to an ad in the local newspaper that contains the employee’s photo and a caption like “Joe has the best on-time record in the province.” Since most are inexpensive, every incentive programme should include some recognition awards.
Travel and Merchandise are the easiest to promote. About 40 percent of incentive users choose travel and the rest use merchandise.
Travel Incentives - Most Glamorous Awards
Group travel, which sends managers and sales performers on trips together, is frequently used to reward high-producing salespeople and distributors. The pluses are:
Group trips also provide high value per rand for luxury accommodations because of group volume discounts.
A common mix of awards is group travel for top-tier winners and merchandise for lower-tier awardees. Some of these hybrid programmes are also using individual incentive travel programmes.
Merchandise Awards. Great Trophy Value
Motivating with Incentive Merchandise/Gift Certificates/Cards are high impact incentives because of their long lasting value as well as the budget flexibility it offers corporations whose objectives do not justify big budget travel programmes. A television set that has been chosen by the achiever from a catalogue of quality merchandise is a constant reminder of a job well done from a company that cares.
There are both online and printed catalogues available for a number of different strategies containing items in a variety of price ranges. Participants are awarded points for their performance and they gather these points and redeem them for items they desire. Or you can set a performance level and award certificates for items in a certain price category (these might be identified as Bronze, Silver and Gold Levels).
Q: How should I promote the programme?
A: The theme should reflect the programme’s goals and the company’s image.
Even the most intelligently designed incentive programme with the most heart-stopping awards will fall flat if you fail to promote it.
First, after consulting your focus group, decide on a theme. It should not just be a clever catch phrase, but an idea that is in keeping the programme’s goals and the company’s image. Think about using short direct sentences; active verbs; a meaningful acronym, such as T.E.A.M.: “Together Everyone Achieves More”; a simple logo that incorporates your company logo and/or ties in with the top award, and/or slogan that incorporates your company’s name or image. For instance, a company called Modern Programming might use “Get With the programme.”
The teaser should be a fun piece that plays on the campaign theme, such as mailing a card shaped like a palm tree for a programme with a Caribbean trip as the top award. To grab your audience from the get-go, make it interactive – ask recipients to piece together a puzzle or solve a riddle.
The announcement piece must clearly outline what participants can win and how they can win it. This piece should describe all the elements you have worked on up to this point: programme goals, rules, structure, length, measurement system and awards. Include an enrollment card to get the information you will need for administration, and encourage people to carefully read the rules.
Kickoff materials and activities are meant to build momentum. Some ways to get maximum impact: heighten the sense of importance by getting the company CEO to announce the programme and use theme décor connected with the top prize to get people thinking about how it would feel to be in the winner’s circle.
Promotional mailings constantly remind your audience what they are working toward. The shorter the campaign is, the more frequent these mailings should be. They can take many forms: training sessions on new products and sales strategies, letters from corporate VIPs and inexpensive giveaway items that depict some aspect of your travel programme. You can also reward interim performance or build excitement with three-dimensional teasers, such as brass paper clip or letter opener with the campaign logo. Don’t forget to include banners and posters that can be displayed in the work place
Standings email, which update participants on their progress, should be an integral part of the whole promotional campaign. The results they report should be easy to read and understand.
At programme’s end, be sure to send out a congratulatory email that tells the winners their final standings and applauds them on their achievements. The ones they will value the most are personal letters from top executives that praise their success and recognize their value to the company.
Q: Will I need help to run the programme?
A: You can probably manage a basic, small-scale programme in-house, perhaps with a helping hand from Rewardsco. You will probably need help from your company’s technology department to establish a database, as well as a marketing or sales person to administer the programme. Visit www.rewardsjunction.com for options on our premium, medium and lite packages which can be custom built to your company's needs.
For a more complex programme, consider calling on the expertise and technological capabilities of Rewardsco. Contact us on 011-267 0001. Running the programme entails:
- Registering each participant by sending out or emailing enrollment cards to gather necessary information, then using the information gathered to create a database.
- Designing, printing and sending out the promotional mailings to promote the programme.
- Tracking progress within the database. This means that when each sales rep earns points or credits, someone must input the information. Another key part of tracking progress is producing performance statements, with standings mailings sent periodically via email to all participants to inform them of their progress and maintain their excitement about the programme.
- Reporting progress to company executives. These reports, given out at regular intervals can be produced from the participant database.
Q: How do I evaluate the results?
“You can’t declare the programme a success until you have judged the results.” The programme is over, the feedback has been great, and the progress reports along the way promised a big jump in sales or tremendous improvement in employee behaviour. But hold on – you cannot pronounce the incentive a success until you have evaluated the final results. A conclusive post-programme evaluation will tell senior management that the programme was a worthwhile investment. It will also point out ways to refine and improve future programmes for even better results.
How do you judge the success of the programme? Get feedback. There are three sources of vital information: the programme participants, the administrators and your own observations.
First, listen to the participants. Mail out a questionnaire or conduct a telephone or e-mail survey. Ask them whether the information about the programme was communicated clearly and at the right intervals, whether they liked the awards mix, whether the training you provided helped their performance and how they rate the quality of the promotional materials and events.
Then, talk to those who administered the programme, whether it was your own staff or an outside incentive company. A formal survey is not necessary: just solicit their feedback in conversation. Ask them what snags they observed as the programme was run, as well as what elements they thought were successful.
Finally, cast your own critical eye on the results. Consider not only the bottom line impact, but intangible aspects as well. Ask yourself questions such as:
- What was the quantifiable effect of the incentive programme on sales and/or profits? (ROI)
- Did the company meet its intangible goals – improving morale, fostering loyalty, inspiring ideas?
- Did the programme and its awards meet or exceed the participants’ expectations? If not, why did it fall short?
- Did the programme create any unexpected benefits, such as a new sense of enthusiasm or a greater occurrence of goodwill gestures?
- How did the performance of the participants compare with that of any non-participants? (If this comparison is important, try to set up a control group of non-participants and gather data on its activities before you run the incentive programme.)
Also ask yourself whether any of these non-programme-related events affected the outcome of your programme.
- Has there been an increase or decrease in pricing? Either can create a fluctuation in sales that has nothing to do with your incentive effort. Consumers or dealers may have bought less simply because prices went up, or purchased more because they moved down.
- Was the product/service a new or repositioned one? A new product, new packaging or new name can decrease brand awareness and cause sales to dip – or it can cause a splash that draws renewed attention to the item.
- Has the company recently changed its image or marketing strategy? The same principle as above applies to entire companies: a strategic make over can be a temporary turnoff due to most people’s distinctive dislike of change or it can be an eye-opener that excites fresh interest.
- Did advertising expenditures increase or decrease? Either shift affects purchasing behaviour and the bottom line.
- Was any other incentive programme or promotion running simultaneously? Concurrent incentives may have diverted your audience’s attention or caused confusion – or added to the excitement and boosted performance.
- Has your distribution channel changed in any way? Problems along the distribution chain might have slowed things down, while improvements might have jump-started your sales.
- How does your product/service quality compare with the competitions? Even with the most highly skilled and motivated sales force and distribution team, product quality is a factor that cannot be overlooked.
Using what you have found out about these external factors and the programme itself, review separately each component of the programme: goals, budget, measurement system, awards, promotion and administration. In each area, break down what worked and what did not.
Finally, put it all together and ask what you would do differently next time. Commit these ideas to paper and use them as a guideline for your next corporate incentive programme
