May 2, 2019, 2:00 PM EDT.
Northstar's "Choosing the Right Incentive Reward" webcast
, sponsored by Bulova
, will feature expert insight on the various types of rewards — merchandise, gift cards or branded currency, travel — and look at scenarios where each works best, whether as the sole award or in combination with others.
When it comes to designing a successful incentive reward program, you'll first have to determine the goal of the program and types of rewards that will motivate employees and channel partners to push their performances to the next level. You'll then need to set measurable goals for participants, create guidelines that will support and encourage them, and communicate it all in a meaningful way.
The above comprises some of what will be covered on May 2, when Northstar Meetings Group is hosting a premier webcast on "Choosing the Right Incentive Reward." The event will feature expert insight on the various types of rewards — merchandise, gift cards or branded currency, travel — and look at scenarios where each works best, whether as the sole award or in combination with others.
One of the experts on the webcast panel, Mike Donnelly, president of Hinda Incentives, recently answered some questions we had about choosing successful and meaningful rewards and programs.
What are the necessary steps for crafting a successful incentive program?
There are typically five key areas to think about when you start developing an incentive program:
- Program objectives and goals
- Audience targeting
- Communications and training
The first step is to define your program’s objectives and determine whether the goals are realistic. An incentive program can be a very effective way to gain engagement, motivation, and discretionary time and attention. But if you’re asking people to travel to the moon on a bicycle, don’t expect them to plant your flag up there. Goals should encourage people to stretch, but they must be seen as reasonable.
The goal of any incentive program is to encourage people to change behaviors. But that means finding the right people who can reasonably affect the outcomes in a sufficient time frame -- don’t overlook audience members who can help.
Think about it: If you want to increase sales to existing customers, you might automatically think you’re going to target your sales team, but your service team that visits customers regularly and sees what could help them most might be your fastest sources for new referrals and leads that close quickly, because they are spot-on with the right solutions.
Rewards are important to get your team's attention and answer the question, "What’s in it for me?” But you need to tell them what you want them do and how they're going to do it. Remember, you’re trying to change behaviors, and that requires a complete program, not just an end reward.
What rewards are employees getting excited about these days, and which ones are becoming stale?
There’s always some award that catches fire and sees astounding redemption. For months now, Apple AirPods have been some of our top redeemers in points-based programs. But like a rising tide raises all ships, more and more brands of wireless headsets have jumped in redemption as the AirPods have been moving up, too.
We’re also seeing some increased redemptions in experiential rewards, but often that is related to your program’s award payouts and demographics. Higher payouts tend to increase some of the experiential options. But when I talk about demographics, we find it has more to do with life stage than it does age or even income. People with families redeem the same type of awards.
We add and/or replace about 150 or 200 items each month. Most of that is with model upgrades, and we tend to see categories stay very consistent as far as redemption. Like electronics is almost always the number-one category, but you’d probably be surprised at how closely it is followed by housewares.
Can you explain a bit more about the various types of rewards and when they'd be most beneficial?
Types of incentive rewards and how appropriate they are really depend on the specific incentive program and its participants. For example, offering skydiving or bungee-jumping experiences in a safety program would probably be sending the wrong message.
But the biggest mistake I typically see on the rewards side is managers selecting the awards they want. Often, they will choose only one or two items they would like to have. I can assure you, all of your people are different, and each will be influenced by different rewards. Providing them a rewards portfolio with enough diversity to allow them to choose something that is meaningful and important to them personally can help them engage early and stay engaged throughout your program. But the trick is to find a balance -- make sure the offerings aren't so broad that they become overwhelming.
Are some incentive programs harder to plan/monitor/carry out than others?
Sure, some programs can be more difficult to implement than others. For example, a channel program that rewards sales people who work for your dealers or distributors almost always takes some type of unique reporting and validation processing. You know exactly what your salespeople sell and to whom, but a distributor’s salespeople are at least one step removed from you. So, you have to plan some sales-reporting systems with an appropriate validation process.
Some employee-recognition programs can be challenging. Think about it, what one manager feels deserves special recognition another might feel is just part of the employee’s job. So, defining corporate values clearly and helping managers understand when to recognize people so they feel they are being treated consistently and fairly can be an enormous training endeavor.
Which type of incentives do you see appropriate as sole rewards?
I’m not a big fan of a “sole award” program. That’s because I sincerely believe people are unique and will be inspired by different awards that speak to them on a personal level.
Having said that, there are some instances when a sole reward works well, most notably, top performer sales-recognition programs. Group travel can be an extraordinarily motivating award for the top 5 percent of your sales people. These are the people you simply can’t afford to lose and who your competitors are trying to steal from you all the time. So a high-end expensive trip to a destination they may never go to on their own sets your organization apart and has them thinking twice about moving to a competitor.
Now, the same can be said for an award that becomes a symbol of achievement… a year lease on a Mercedes or Cadillac for the top performer…. a trophy only the top performer receives; all of these work as great sole awards. The problem with these types of soles rewards is the limited number of people who can earn them.
You can’t afford to take everyone to Rome or to give everyone a BMW. And trophies are only special if a few earn them. But the rest of your people will automatically disengage with a program if they perceive no opportunity for them to reap the benefits.
My suggestion to most companies is to combine a top performer program with a “move the middle” program, allowing a big part of your audience to earn a small rewards for reasonable stretches in their performance. Ultimately, this can get everyone moving in the right direction and move your entire organization to succeed.
Mike Donnelly, president of Hinda Incentives, is a 35‐year veteran of the incentives, recognition, engagement and loyalty industries. He is responsible for all leadership aspects of Hinda, including sales, marketing, product development, strategic direction and operations. Incentive Magazine recently name Mike one of the top 25 most influential people in the industry. He has also received numerous industry honors, is a CPIM, and a board member of both the Incentive Federation and the Incentive Marketing Association.
Don't forget to join Northstar on May 2 for the interactive webcast, "Choosing the Right Incentive Reward," sponsored by Bulova watches and featuring Mike Donnelly, along with Allan Schweyer, chief academic advisor for the Incentive Research Foundation. Register to participate today!
Mike and his Hinda team are continuously working on the future of engaging rewards, as well as online innovative tools that keep sales, channel partners, employees and customers engaged with client programs. Hinda has grown faster under Mike’s leadership than at any time in their nearly 50 year history.