An incentive program can dramatically increase sales, establish customer loyalty and strengthen sales channel partnerships by changing behaviors in your organization. Today’s incentive programs can be delivered through powerful online software, helping streamline processes and align your program more cohesively with your business and its goals. An incentive program isn’t a one-size-fits-all business solution that can run on autopilot, however. That fact leaves room for incentive programs to fail, especially if the program isn’t structured correctly in the beginning or monitored through its lifespan.
Let’s examine a few of the most common reasons incentive programs fail, the problems’ causes and how to solve them.
Problem #1: The program is too burdensome or time-consuming to manage and seems like more trouble than it’s worth.
|Cause: The incentive program wasn’t structured correctly in the beginning, did not utilize software or tools that made the program easy to manage or appropriate resources aren’t dedicated to program management.||Solution: Implement more efficient incentive program software, if necessary. The right online incentive software can streamline procedures such as sales claims validation, reward fulfillment, sales tracking, customer data clean-up, participant group segmentation and more.|
Restructure program responsibilities and tasks, or work with an incentive company who offers program management services.
Problem #2: You sent out invitations to your selected participant group, but no one’s activating their incentive program account.
|Cause: You aren’t communicating with your participant audience effectively. Either your messages and your program’s value proposition aren’t clear to participants, or you’re not connecting with them the way they want to connect.||Solution: Use incentive software that includes a multi-functional communication tool, so you can deliver diverse messages through the mediums your participants are active in, including texts, emails, push notifications or the content of your incentive program website. Seek out the creative services of your in-house marketing team or your incentive program provider to design flyers, posters and emails. Schedule call campaigns to remind participants they haven’t activated their accounts.|
Using online incentive technology with open enrollment features is one of the best ways to acquire clean, up-to-date participant contact info. When they fill out an open enrollment form, participants can specify how they want you to contact them. That way, they know where to expect incentive program information to come from.
Problem #3: Participants are registered but inactive in the incentive program.
|Cause: Hate to break it to you, but the incentive rewards you’re offering? Your participants just aren’t that into them. There are a few reasons participants may not get too excited about incentive rewards. Maybe you’re offering rewards that don’t click with their personalities, interests or demographic. If you’re offering cash rewards, the “wow” factor probably wore off quickly, because participants started to associate the reward as part of their typical salary.||Solution: Offer participants a diverse selection of tangible, non-cash rewards. With an online incentive program, you distribute rewards to participants in the form of digital currency, or points that they can spend in an online rewards catalog featuring items like electronics, movies, tools, home décor, sporting equipment and more. This is the best reward strategy for offering participants incentives varied enough to appeal to everyone with their exciting trophy value.|
|Cause #2: This problem comes with a bonus possible cause: you may not be targeting the right people to receive incentive rewards.||Solution #2: Many incentive programs are structured to reward only the top performing salespeople or most loyal customers. However, you can’t actually make much difference in the status quo by targeting these groups because they’re already at the top of the food chain.|
Research shows you have far more to gain from motivating the largest group in your sales department, customer base or sales channel: the middle majority. People in this group have the most room for growth because they’re neither sitting pretty at the top nor consistently coming in last.
Target the middle majority with more frequent, lower-value incentive rewards (like movie tickets, books, digital downloads, etc.) to motivate them.
Problem #4: People are engaged, but the impact on the bottom line isn’t significant enough.
|Cause: This problem is typically caused by setting program goals that aren’t specific, measurable, achievable, realistic and timely (SMART!). An incentive strategy that isn’t fully thought through and aligned with company’s overall objectives won’t help your company reach those objectives, no matter how engaged participants are in the program.||Solution: Go back to square one and set goals that are timely and relevant to the company’s objectives. Your incentive program goals should be directly tied to your latest sales, marketing, customer loyalty or channel partnership objectives. As those goals change, so should your incentive strategies. If your goals aren’t agile, up-to-date and relevant to the latest evolutions in your business or marketplace, your program won’t have a meaningful impact on your bottom line.|
Problem #5: No one knows what impact the program is having on the company.
|Cause: You’re either missing a formal ROI measurement process, or no one is taking accountability for acquiring, interpreting and reporting on this ROI measurement.||Solution: Partner with an incentive company or utilize incentive software that provides activity reports and analytics. These reports will help you understand who’s active in your program, as well as when and how they’re using it, which promotions are successful, etc. Quantifying the activity and results of the program will allow you to translate its effect on your company and its overall goals.|
Problem #6: The incentive strategy isn’t achieving ROI, or isn’t meeting expectations or benchmarks.
|Cause: It’s possible the goals you set in the beginning were misguided, or based on an incorrect hypothesis. Even you set goals that are well-informed and well-researched, those goals still may fail to impact your pain points.||Solution: Motivating people, like most marketing tactics, is part psychology and part science experiment. If one incentive strategy fails or doesn’t meet your expectations, regroup with your incentive program account managers to develop new tactics from program reports and data. All businesses are different, and figuring out the unique incentive strategies that drive growth and motivation in your organization isn’t always an instant recipe. Create new goals and try, try again!|
Incentive strategies are rarely instant fixes, nor should they be! Sales motivation, customer loyalty and sales channel relationship-building strategies will change depending on each organization’s unique circumstances. It’s normal to experience a few hiccups along the way as you align your incentive program with your overall business goals. The longer your program is in place, the more you learn about your pain points and which incentive strategies are effective for you.
Steve Damerow is the CEO at Incentive Solutions, an incentive program provider in Atlanta specializing in helping B2B companies increase distribution channel sales, establish customer loyalty and retention, and develop long-lasting channel partnerships.