A guide to using incentives and motivation programmes to drive sales, marketing and customer relationships

How to plan your incentive and motivation programmes so they make a difference from now into 2013

IntroductionReward programmes are a critical part of sales and marketing activity for many organisations.

Whether you operate in consumer or business markets they remain a valuable way of incentivising customers, channel partners and sales teams around specific objectives, which can be targeted and success measured against the original financial investment.

So as Christmas approaches with the urgency of sales targets in the air and the issue of what can be done to reach or exceed them high on many people’s agenda, we think this is a good time to step back and think how you can get more from your spend in the remainder of 2012 while setting the foundations for sales and marketing performance in 2013.

This white paper looks at five areas where we think most organisations can make an immediate, positive difference to what they are doing:

• Getting your planning right• Thinking beyond Christmas• Getting a better return from your investment• Choosing the right reward• Managing your reward scheme

These observations are based on our extensive track record in delivering reward and incentive programmes for some of the leading UK brands and our own insight into how organisations can best respond to the current business environment to stay ahead in this area. By taking a step back and making some small changes to what they do we believe every organisation has the opportunity to improve sales and marketing performance through incentives and reward.

When was the last time you sat down and gave a fresh look across all your incentives and reward activity?

That may sound like a luxury coming into one of the busiest trading periods of the year, but it is part and parcel of good planning necessary to ensure your incentives and reward are targeting the right people with the right things.

We’re not talking about a time-consuming formal review but the importance of taking time out to ask yourself some simple questions which will give insight into what you may need to think about changing. Key areas to consider are:

• Relevance - Is your incentive programme still relevant? Are the objectives and results of the incentive programme still aligned with your business objectives? Dothe rewards meet the needs of the people you are targeting?

• Innovation – What are the competition doing? What are they doing which mayhave an impact on your own programmes? Is your activity really differentiating yourbusiness or brand?

• Targeting - Are you using your budget to target the right people? Step back andlook at whether you have the balance right between external sales, such as channelpartners and distributors, internal sales audiences like your customer service andsales teams who can influence commercial performance, as well as existingcustomers. Segment the audience and apply relevant objectives and targets basedon the current performance levels.

• Management – Be clear about what you’re trying to achieve; increased customeracquisition, increased sales and retention of existing customers, increased businessreferrals and leads or improved conversion rates – the strategic objective determinesthe incentive and reward strategy. How successful have past initiatives been andwhat more can you do to ensure your investment delivers a sales benefit?

• Return on investment – Is the balance of reward and commercial outcomes right?What needs to change?

Good planning will ensure that existing investment in reward and incentives is tight and focused on delivering the best outcomes as well as identifying new areas for investment which can actually make a bigger difference commercially.

Getting your planning right

Key Action - Planning

Reviewing your approach to reward in the sales and marketing mix is vital to ensure current schemes are relevant as well as identifying potential change which can positively support commercial targets.

The run-up from autumn to Christmas is a critical time commercially for organisations. For many it is a peak trading period which delivers the cash to sustain the business through the thinner periods of the coming year. For others it is the last chance to hit targets which will have a bearing on budgets and investment in the coming financial year.

Whether your reward or incentive scheme is directed at sales and customer service people within your organisation, external distributors and partners, or your customers, the pre-Christmas period is also important as it sets the tone for performance in the year ahead.

Given this context, unsurprisingly, many organisations focus much of their reward spend around this time, as incentive programmes mature or contributions to sales are recognised for sales teams and channel partners.

While it is certainly important to do something to recognise this effort, focusing all of your efforts on Christmas may not maximise the impact of your budget. For a start, as the run up to Christmas is such a pressured time for many, there is a danger that communications and reward can get lost in the mix – particularly for customers and channel partners who will have a number of organisations vying for their attention.

What’s more the Christmas period is commonly followed by January doldrums where motivation and interest among sales teams and partners can be lacking. This can cost your organisation money and you can be missing out on opportunities to build relationships and set the tone for the next year.

We believe a smart approach is to split your reward and incentive planning across the end of year and into January. This means being ready in December to communicate and deliver reward and incentives aligned to activities which can make a difference to sales people/channel/customers in the squeezed weeks of early 2013. While sales may be harder to come by, cementing loyalty with existing customers, reactivating dormant leads or for external partners, getting them engaged with your brand can all be supported.

The element of surprise should set you apart from the competition while investment in relationship marketing activity will give you a head start in working with customers, channel partners and distributors in the coming year.

Think beyond Christmas and into 2013

Key action – maximising your investment

Spreading your investment through the year – particularly outside of Christmas - can be a powerful way of differentiating your brand and improving the impact of the money you spend on reward and incentives.

Get a fast start to 2013 by delivering an early tactical campaign which grabs attention and banishes the January blues.

We are all used to the idea of demonstrating return on investment – it is what we need to do to win support and budget for reward and incentive programmes. But with budgets under sustained pressure in our organisations and sales squeezed in many sectors, we are all finding we must now compete harder for our share of the pot or risk losing out. This is why a third area where we should think to make a difference to our organisations by measuring a wider range of outcomes from reward and incentive programmes.

Of course delivering new sales is of the utmost importance but reward and incentives deliver value in many other ways: by sustaining loyalty to your brand or business, increasing the number of advocates and referrals. A good question to ask yourself is: apart from sales, what are the other things we would like to achieve from customers and partners?

Key areas which emerge and may not be measured are typically:

• Relationships –measures of the strength of relationships with key customers orchannel partners and how productive they are.

• Reputation - what people think and say about you. This defines the extent to whichyour customers or channel partners will recommend your brand over another.

• Behaviour – this is what your customers, partners and sales people actually do, such as the extent to which customers or channel partners are willing to attendtraining seminars or are actively engaged with your incentives and rewardprogrammes.

Looking at return on investment in this way should set the tone for review of existing schemes and your planning of new ones. It should extend to implementation, informing key areas such as how the programme is managed and communicated.

By monitoring a range of outcomes that go beyond outright sales figures, you are more likely to spot trends which show when performance is off track earlier on, while also being able to capitalise on opportunities.

Reframing success to cover a wider range of outcomes also helps show the depth of the contribution you are making to your organisation and build a stronger case for how investment can be strengthened.

Rethink how you can measure impact

Key action – measuring impactIncentives and reward programmes deliver multiple outcomes beyond pure sales. Think about what you want to achieve and how these can be measured to show the depth of impact from money spent.

While good insight will give you great ideas about what you can do to cut through the noise and attract people to your business, brand or service, the nature of the reward you give still plays a critical role in incentive programmes.

Of course, in nearly every instance there is a need to express thanks. But to get the most out of the money you invest, reward should be personal, show some link to your brand or business as well as helping to strengthen your relationship for the future.

Here, non-cash reward plays a critical role. Pre-loaded cards or vouchers which can be redeemed online or on the high street allow you to give something valuable where the receiver still gets the choice to spend on what they would like. Unlike cash, cards and vouchers can be branded and the fact that the money is ‘ring-fenced’ ensures a double impact when the reward is given and when it is redeemed. This is the same for travel as an incentive which is rapidly growing in popularity.

For organisations who want to develop longer term relationships, pre-paid cards can also be reloaded throughout the year as part of an ongoing incentive programme. They also have benefits in the way they are treated by the tax man.

So while the end of year cash incentives or the ‘wine and chocolates’ approach to appreciation may appear easy, it is highly unlikely to achieve the same level of benefit for your organisation that a well-thought out non-cash reward scheme can deliver.

Choose the right reward and incentive: cash v non cash

Key action – personalising reward

Organisations can achieve greater loyalty, brand awareness and strengthen key relationships by using non-cash reward.

The last area to focus on in increasing the impact of reward is about what you do within your organisation to create an environment where reward and incentive schemes can fulfil their potential.

With budgets tight and sales hard to come by, the starting point is to make it easy for people to approve your ideas.

In making the case for sales and marketing reward schemes it is critical to be clear that the investment is pegged at the right level to deliver sales - as well as other benefits for the organisation. Doing this effectively means supporting your case with the right evidence, how you will measure success and what success will look like. It also means giving the decision making process time so there is adequate space for project planning ahead of implementation.

The second area of importance is around execution. Many incentive and reward schemes succeed in getting buy-in for a big idea only to fail after the launch. Good execution for reward and incentive programmes relies not only on senior sponsorship to see them through the decision making process, but also support from managers in your business to keep them on the agenda, as well as ongoing awareness of what you are doing among the people you are targeting.

This comes down to ensuring you have effective communication plans in place which maintain momentum, interest and awareness of the programme as well as ongoing monitoring, which will flag up when the scheme is falling short of its targets.

Creating an environment for success

Key action – getting support in your organisation

Reward schemes can only reach their full potential if they are supported by sound planning, support from managers and a coherent communication programme. The key is to plan early and ensure as much energy is dedicated to post-launch communications as pre-launch activity.

ConclusionIn 2012 many organisations have been faced with static or shrinking markets and volatility in customer behaviour as money remains tight and people scout for value in everything they buy.

In this climate, coming into Christmas and focusing on the year ahead, incentive and reward has a critical role to play in supporting sales and marketing activities which enhance loyalty, strengthen relationships and give added value to customers and channel partners.

In order to be successful we need to stay on our feet, think creatively about how we can make a bigger impact with the budgets we have and what we can change to make our organisations stand out. Standing still is not an option.

About Edenred

Edenred is a leading provider of reward and benefits which supports employee performance. We design and deliver solutions which make employees’ lives easier.

Our products and solutions include: Employee Benefits: Luncheon Vouchers®, Childcare Vouchers®, Cycle to Work, Flexible Benefits, Employee Savings, Total Reward Statements, MyWorkOffers®

Expense Management: Premium Card, Eyecare Vouchers®, Clean Way® Vouchers

Incentives, Rewards & Motivation: Compliments Select, Compliments® Card, Compliments® Experiences, Incentive Award Card, Capital Bonds®, Single Store Vouchers, Travel Clubs, Webcentiv®

Communication Services: A comprehensive range of solutions to help organisations engage and motivate their staff

To find out more call us on 0843 453 0209 or email sales@edenred.co.uk