Years ago, a prospect I was talking with shared his concern over a failed mid-year sales incentive program. We discussed the various program components, and I asked how he had communicated the program to his sales force. He indicated he had made a "big splash" when kicking off the six-month program, which had him perplexed as to why the promotion wasn't a success.
As we dug into specifics, however, the gentleman admitted that, other than monthly sales volume statements, he hadn't promoted the program once during its six-month run. He just expected his sales team to remember the incentives were out there and to get selling. Case closed.
Looking back, I can only wish that all of our clients' problems were as easy to diagnose and fix. When sales incentive programs don't drive results as planned, it is often because the sales organization forgot to pay close enough attention to one or more of six key program components; let's call them the Incentive Building Blocks.
Sales and marketing managers are already familiar with each of these program elements, but over the next few months, we'll dig into each of them in depth as a refresher course on incentive program design. The reality is, most incentive solutions in place today are lacking attention to some of the Building Blocks, hindering the chances for optimal sales results.
Here are the six Incentive Building Blocks that you always need to include in your programs:
1. Performance plan. As Robert Dawson, longtime incentive market thought-leader and founder of the Business Group writes, "Incentive motivation is not about trips, toaster ovens, TV sets, and gift cards. Rather, incentive motivation is about investing. You are investing in something that can provide your company with the lowest risk and bring your company the highest return of any business investment you can make."
Ideally, a well run sales organization builds an incentive program to deliver a measurable ROI. The performance plan may include some or all of the following elements: market research, manufacturing and logistics capabilities, ROI budget analysis, performance goals (team and individual), alignment and inclusion of sales channel stakeholders, product mix, and applicable metrics.
2. Communications campaign. Often the make-or-break component of a successful incentive program, the communications plan needs to be viewed as an advertising campaign—an ongoing effort to build program awareness, maintain mindshare, and include multiple calls to action.
A good campaign will include a big kick-off and repeated communications throughout the life of the program. Media utilized can include Flash videos, HTML e-mails, voicemail blasts, printed pieces, promotional products, "personal" URLs (PURLS), and online games.
3. Training. Sometimes completely omitted from an incentive program, an element of training ensures all participants understand their roles, program parameters, sales performance expectations, and use of the internet platform that supports the program. Training may be delivered in-person, through a train-the-trainer model, or more often today, with technology solutions including videos and computer-based and interactive learning.
4. Rewards. The piece of the incentive puzzle that emotionally engages the participant, there are more reward choices available today than ever before: Merchandise, group travel, individual travel, stored-value cards, sports-related trips, experience-based activities, "green" and socially conscious products, and even an Amazon-based reward solution top the list of options. Choosing the right rewards that will "move the needle" with the target audience is a bit of an art, and we'll explore that process in a future installment.
5. Analytics. If you are running an incentive program without accurately measuring its success, you are neglecting building a business case for the need of an incentive program when budgets get tight during lean times, and you are missing the opportunity to make positive changes to the incentive process for your next program.
If the performance plan is properly designed at the beginning of the planning process, the proper metrics will be in place to deliver actionable information during the promotion, in case a course correction is needed and at program completion for analysis of results and ROI. Program-end data is also critical to the development of your next promotion.
6. Recognition. This acts as a positive memory anchor reinforcing the performance achievement, leading to future, repeated success. Recognition also meets the highly motivated salesperson's need for appreciation and public acknowledgement of achievement. Think of Olympic medals as possibly the world's best-known recognition awards.
A recent study by the Incentive Research Foundation found over 70 percent of companies surveyed build and run their own incentive programs. Most of the people surveyed indicated that their companies had the capabilities in-house to run programs on their own, and in fact, many companies run successful programs that include most or all of the Incentive Building Blocks.
But in my experience, there are also a great number of companies that are "leaving money on the table" in terms of sales results by trying to do-it-themselves. In the process, they're seriously hurting their business results.
If you're going to run your own program, you might want to avail yourself of program development information available online, starting with the Incentive Research Foundation, which has published a number of incentive process white papers and studies.
You may also contact one of the many reputable incentive companies that make it their business to create solutions that, by including all of the Incentive Building Blocks, deliver superior sales performance results that more than pay for their services.
SMM columnist David Chittock is president of Incentra, Inc.