It’s time to do something extra for your sales force or for support teams. You need to focus their attention on a new product launch, on a difficult sales goal, or on new positioning that will enhance your strategic value to clients. An incentive program is a great tool to create focus on both short-term and long-term business needs. But if you’ve never run one before, or if you want to benefit from some new thinking, how do you get started?
Think of an incentive program as a four-legged stool. To be effective and to stand upright without wobbling or toppling over, the incentive program needs four elements:
1. Design: How is the program structured?
2. Communications: How will it be communicated?
3. Measurement and Feedback: How will people know where they stand?
4. Rewards: What is the reward for desired performance?
Let’s start with Rewards. The rewards are the most visible part of the incentive. Whether it be a memorable Top Performer Travel Award or the chance to earn prizes or gift cards for performance, the reward is an opportunity to create powerful, memorable experiences that become associated with your brand. The right reward experiences can help nurture relationships with sellers that go far beyond the “do this, get that” economic transaction of an incentive.
Rewards, however, don’t motivate incremental performance if they are stand-alone, and not supported by the other three legs. Rewards will always provide a great recognition moment for performance that has already happened. But if an incentive program is actually going to generate incremental performance and move the needle financially, it’s important to consider the other three “legs of the stool.”
Communications is often overlooked because it’s the easiest place to cut costs in an incentive program. With the ease of email as a mass communications tool, many incentive campaigns have reduced communications to a series of emails. As we all know, the barrage of daily emails is such that a good percentage of what we receive goes straight into the recycle bin. That’s why having a multi-media communications strategy that includes elements like print and video is essential to create buzz. Communications plays a vital role to make sure people understand what they are being asked to do and how they “win.” Once those fundamentals are in place, then it’s important to sustain excitement. There is nothing like a glowing four-color print announcement or a video featuring an exotic travel destination to add the emotional layer that sticks in people’s minds for the duration of the campaign.
Likewise, don’t forget about Measurement and Feedback. In many cases, existing data capture mechanisms and feedback systems can be used to communicate progress in an incentive program. However, the industry abounds with stories of people who won a top performer award and did not know how they won. Likewise, a program where people don’t understand the formula or don’t know where they stand will have limited effect. A program where you can’t tell people where they stand as frequently as monthly is not going to drive incremental performance. It’s important to create clear line-of-sight between performance, metrics and reward status.
This is where Design becomes important. And Design is actually the first step and not the last one. It’s all about how the program is structured and how business rules are developed and articulated. An effective program design follows several simple rules:
- Keep it simple! Make sure that the winning formula is both easy to understand and something that can be measured. As one of my key mentors often said, “the relationship between complexity and success is inverse.”
- Have a clear business objective that you are trying to attain, and then engage all the people who can have a positive impact on that business objective. Not only that, make sure the business objective is measurable and not too broad. Just like the players in the program, program owners need to know “how they are doing” and be able to measure progress toward an objective
- Make sure the program is fair and that is set up to engage as many of the people who impact its objectives as possible. Personal Objectives must be attainable. A top performer program based only on volume will probably disengage the bottom 70% of a selling audience who think they have little chance to win. Conversely, a program based solely on percentage growth will penalize the largest accounts whose high growth $ might be a lower percentage than a mid-tier performer. Hence a “one size fits all” structure is probably not optimal.
- Think about the individual for whom you are designing the program. Don’t just focus on the financial outcomes you are trying to achieve but also think about the behaviors that will help your individual performers deliver results. Also, think about how you can make the entire program an experience that complements the reward experience. Elements like professional development, community and tier membership can be injected into the program experience to engage almost everyone, even if they won’t all be on the Top Performer trip.
- Finally, use the design process to ensure your communications strategy and feedback strategies are solid. Many programs fail to deliver the desired financial results if they are not communicated frequently. Likewise, if there is low transparency around metrics, progress and standings, people will not be engaged and won’t be focused on delivering incremental revenue. Design can help to ensure an up-front strategic approach that will help keep a focus on program results and progress toward attaining business objectives.
Design is a scientific approach to answer the key program questions up front: who plays, how much to invest, how to evaluate the program for its contribution to financial results, and how to apply different strategies to different segments. To answer these questions, it can be helpful to have access to independent experts who have worked on hundreds of similar programs and who can provide a perspective of what’s worked and what hasn’t. At Animate Growth Partners, we have unbundled design from the more expensive program support elements like technology platforms. Design can be purchased as an a la carte service to help program owners design more effective programs for an audience of any size. And a solid focus on up-front design will minimize the risk of toppling from a one-legged stool.