New Years Sales Goals
Happy New Year! We are just a couple of weeks into January … so, how are you doing with your resolutions? Still in the honeymoon phase, where just after your resolution was announced you are 100% engaged? Or, have you put it on autopilot and you are thinking you have all year to achieve it?
On the turn of their fiscal “new year”, businesses set revenue goals – one of the biggest resolutions of all. And many of these businesses sponsor an incentive or loyalty program with the expectation that the program will motivate them to hit these new resolutions (i.e. quotas). Clearly, the engagement of salespeople (direct or indirect) and B2B customers is essential to achieving your stretch objectives. Incentive programs absolutely do impact results, but our observation is that a majority of programs could dramatically increase ROI with ongoing strategic design and management.
Many companies that employ an incentive strategy fall into one of these scenarios:
“Our incentive program has been running the same way for years, and our business is doing fine. We announce a new incentive travel destination (or other rewards) at our annual conference. Our sales channels get their quotas, and winning is totally up to them. Results are evaluated towards the end of the year so that those who are close to their goal will know what it’s going to take to win.”
“We are (re)introducing an incentive program, and don’t really have experience in structuring the rules to ensure the program will deliver ROI. We don’t have a huge budget, so we are bootstrapping and working out the tracking and selection of winners internally (DIY). We’ll see how this goes, and if it works we’ll keep it going.”
Both scenarios above are indicators of a “set it and forget it” strategy (which is only a good thing when Ron Popeil was selling a gadget on QVC). Sure, you’ll get winners, but can you define the actual impact of the program on overall revenue? Are you paying for what you were already going to get? And what impact did the program have on those who won’t win, those who perceive the program to be unfairly difficult to win? And what impact will this year’s program have on NEXT year’s performance? Will participants game the system and sandbag in order to get a lower objective next year?
When you set it and forget it, there is very little chance that the program will have maximum impact on achieving the goal – your resolution. And when you as a management team are not consistently engaging with your audience, they will mirror that stance.
Instead of thinking about your program as a “gadget”, approach your program as though it were physical fitness. We’ve all heard of “use it or lose it,” referring to building strength and power. Your incentive program should be “used” to build strength and power in your selling channels and customer relationships. Don’t just set a goal and stand at the finish line waiting to see who crosses, but be prepared to run the race with them.
Use it or Lose it!
When launching and managing an incentive or loyalty program, understand that what you’re really doing is directing and encouraging change (in sales or purchases). To facilitate change, set realistic year-end goals and stay engaged with your target audience. Support them, recognize their progress along the way, and you greatly increase the likelihood of achievement (theirs and yours) and maximum ROI.
Here are five ways to avoid “set it and forget it” that will deliver both performance along the way and higher ROI at the finish line:
Checkpoint A: Design
Incentive programs can fail before they even launch if the rules structure or goal-setting is perceived as unfair or biased. Effective design begins by getting clear about the company’s tangible goals and listening closely to the needs of the audience. Transparency and inclusion in this process are motivating in and of itself. The simple act of listening has value as it triggers our social need for reciprocity. Accessing designers in this field is now within the reach of all businesses, regardless of whether they run their own programs or they use full-service incentive program suppliers.
Checkpoint B: Segmentation
The absolute beauty of implementing incentive or loyalty programs is the ability to access all kinds of data. Sure, revenue is the easy part, but by tying in other sources of data – training platforms, customer satisfaction, SFDC, etc. – the opportunity to correlate performance with “steps to the sale” is massive. What’s more, when you devote time to truly helping participants succeed in the steps to the sale, they interpret your support as an earnest desire to help them win! Segmentation based on a broader set of inputs allows you to better understand the audience, and to design rules structures that address the best ways to motivate each segment. Leverage the information at your fingertips to reach your selling network on multiple fronts and maximize impact.
Checkpoint C: Communications
Authenticity, genuine caring, and appealing to social norms and personal values are all routes to engaging people at a deeper level. As a participant in a program, I want simplicity and clarity in terms of what I am being asked to do; but when I understand that my performance connects with a deeper purpose, or aligns with my own personal values, I will be intrinsically motivated to put in greater effort. Think of your program as a segmented marketing campaign (because it is), and you’ll better understand the importance of frequent, multi-media communications. Attention-grabbing, visual communications keep focus and engagement at their maximum.
Checkpoint D: In-Process Measurement and Hurdles
The success of incentive programs, especially those targeting customers or external sales channels, is based on hitting milestones along the way. If you’ve modeled your program for ROI, it is likely dependent upon reaching a certain threshold of participation or engagement. Program managers should establish key milestones with target dates for achievement. Enrollment, sales/purchases vs. the prior year or vs. goal, registered deals or leads, etc. should all have monthly or quarterly objectives and ongoing reporting, enabling your team to make mid-program adjustments if needed. With your revenue resolutions at stake, the speed of business demands more frequent touchpoints; without it, your company stands to lose share.
Checkpoint E: The Reward Experience
The program is over, so how exactly does the experience of giving/receiving an award influence or maximize ROI? It doesn’t … for this year’s program; but make no mistake, creating a memorable experience is paramount to success in next year’s incentive. The Incentive Research Foundation published research in 2017 stating that as much as 60% of the impact of a motivation program lies not in the reward itself, but in the experience surrounding it. There are horror stories of winners receiving an email that notified them they won the top prize, and their response was “I don’t even know how I won this?!” Even when the top award is a group travel program, there are many ways to surprise and delight guests in all stages of the experience. Industry leader Maritz Travel has an entire division devoted to Experience Design led by VP, Greg Bogue – a clear indication of the importance that experience plays in motivation.
Many “incentive” programs aren’t really incentives at all, but simply recognition for top performers – and that is just fine because if you don’t recognize the best, they will leave you. However, to maximize ROI, you need to engage more than the top 15-20% of your audience.
Animate Growth Partners exists to help companies design better engagement strategies. We believe that incentives empower businesses with more flexibility and impact than almost any other single tool, but they require program owners to “use it or lose it.” They cannot just be a goal-setting process, but rather an ongoing journey. Use the entire journey to form a roadmap to ROI, and to ensure you’re encouraging the right activities to help people get there. Use it to make a long-term impact on business results. Or don’t use it … and the program might not be the only thing that is lost.
Happy New Year once again!