PPB September 2015

58 / 124

• Loyalty programs (Buy 10 coffees and get
the 11th one free)
• Safety programs (Break our accident-free-
days record and the team celebrates)
• Sweepstakes (No purchase necessary: enter
to win!)
• Gifts-with-purchase (Buy this washing
machine and get a free set of towels)
• Training programs (Earn rewards as you
pass each level of online education)
• Service awards (Length of service, such as
five-year, 10-year anniversaries, etc.)
• Attendance programs (Awards for perfect
attendance at work)
• Wellness programs (Achieve set goals in a
structured program and earn rewards)
• Frequency programs (Frequent flier miles,
hotel stay rewards)
• Corporate gifts (Gifts sent to customers on
their birthday, holidays, etc.)
• Performance improvement (Set and achieve
specific performance goals such as reducing
accounts receivable, customer service meas-
ures or manufacturing cycle time)
What’s in it for my customers?
Many studies have proven the effective-
ness of incentive programs. One in particular
by the Aberdeen Group that looked at best in
class sales management practices (defined as
organizations in the top 20 percent of their
industry) found that:
• Best in class firms are 47 percent more
likely to recognize that sales growth is
often a team effort, and that
• Non-cash incentives are an ideal way to
motivate and reward supporting cast
members
• 75 percent rewarded the entire account
team for sales, growth and customer service
• Best in class firms are using public recog-
nition 29 percent more often in motivating
their sales forces
• 84 percent of sales reps in best in class
organizations achieved quota (vs. 55 per-
cent of the industry average and 15 percent
at the bottom)
• Top performers are 31 percent more likely
to consider non-cash (tangible) incentives
as a “must have” in the reward mix
• 59 percent have evolved sales contests from
pure metrics to key tools used to drive and
monitor behaviors and outcomes
Who’s doing it?
The Incentive Federation reports these
findings:
• 74 percent of U.S. businesses use non-cash
incentives to motivate employees
• Programs include sales, channel incentives,
loyalty, employee and customer gifts
Incentive programs are not limited to the
sales organization, as shown in the list of
example programs. They are just as effective
for non-sales employees and consumers.
How are they doing it?
Many corporate executives who want to
take advantage of the benefits that incentive
programs provide are often surprised to learn
that their marketing team or ad agency is not
versed in incentive program design. A distrib-
utor can partner with an incentive profession-
al to provide that expertise, or can gain that
knowledge by taking the Principles of
Results-based Incentive Program Design
course offered through the Incentive
Marketing Association. Distributors will then
be able to guide clients through the 10-step
process. Find the IMA curriculum at
Principles.
10 Steps To Design An Effective
Incentive Program
These steps were developed by the
Incentive Marketing Association:
1. Establish Objectives: Identify three to
five goals or objectives that are a) measur-
able, b) attainable and c) simple to under-
stand and communicate.
2. Analyze the Audience: The entire work-
force is most likely not the intended audi-
ence. Determine which group has the
ability to impact the desired change. Will
you involve the audience individually or
in teams?
3. Fact Finding and Involvement: Be aware
that external factors may also impact
results. Involving representatives from the
participant audience in this phase will
help to identify actions necessary to
achieve the desired results. This is also the
step where you decide which elements you
will measure.
4. Rule Structure and Budget: There are a
variety of effective structures for incen-
tive programs. Open-ended (where all
who qualify can win) have benefits that
differ from closed-ended (where only
the top performers win), and there are
places where each make sense—or you
may wish to structure a program that
uses a combination of both. The rules
must be fair to all participants. Setting
the budget requires identifying fixed
costs and getting the best estimate pos-
sible for the award budget based on pro-
gram expectations. An incentive profes-
sional can help you with this process.
The rule of thumb for program spending
is: 80 percent rewards, 10 percent pro-
motion, five percent administration and
five percent training.
5. Select Rewards: This is another step
where it is beneficial to include partici-
pant representatives in the planning
process. If the employee is not motivated
by the rewards you choose, the program is
not going to be effective. Likewise, the
reward must be commensurate with what
you’re asking of the audience (i.e. working
overtime on a project for six months to
earn a $10 gift card is probably not going
to work). Like any promotional product,
an effective incentive:
i. Is appropriate for the goal (it’s “worth
it” to the participant)
ii. Reinforces the brand values of your
organization
iii. Offers “trophy value”: something
they’ll remember
iv. Creates excitement among
participants
6. Communicate the Program: Decide how
you will announce and launch the pro-
gram. Will you use social media, email or
other internal announcement? Is training
necessary? How, and how often, will you
communicate throughout the program?
How will you announce results and
reward achievers?
7. Operate and Track Results: Results
measure and track outcomes; process
measures and tracks actions that lead to
the results. Based on your rule structure,
choose two or three outcomes or process
measures that will allow you to gauge the
success of your program.
8. Fulfill Rewards: The more immediate,
56 • PPB • SEPTEMBER 2015 GROW