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If your client companies want to improve profitability and make
employees and clients feel valued and secure, help them reach
their destination. Travel no further for top tips and success
stories for tapping into the $46 billion incentive market.
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When executives of the Seattle arm of Comcast, the cable-communications giant, wanted to cut the company’s insurance premiums and medical costs by reducing the number of injuries among its field workers, they turned to Danica Westmoreland,
president of Incentive Solutions Inc. (asi/230855) in Woodin-ville, WA. She created a super-successful safety program for the operation’s 700 outside employees.
Here’s how it worked: At the outset, her Comcast contacts didn’t have a program concept in mind, she says. They simply wanted to keep their people more focused on safety by reward-ing them for keeping hardhats on, wearing their boots, follow-ing rules for working with cable and electric, and more. West-moreland, however, was going for more dramatic results. Her first move: announcing that keychains or coffee mugs wouldn’t do the job in this case. “The offerings needed to be much more personal and specific,” she says. “Items that employees choose themselves and feel a personal regard for would stay top of mind and reflect their good deeds.”
The online points-based program she created which rewarded individuals and teams alike after spot checks, and random calls to customers (who earned a free movie), consisted mostly of items between $5 and $25. “The program was diverse, offering things like Garrity flashlights, picnic packs, personal-ized pen sets and even ladies’ watch sets,” she says.
Comcast also took Westmoreland’s advice not to place the firm’s name on the items. Instead, the company presented the awards along with personalized letters from the division president during monthly division meetings. Such acknowl-edgement created lasting memories, camaraderie and the desired goodwill.
The program’s results came rapidly. Just two months into the program, safety incidents fell to 17 from 54 versus the same period one year prior, “which is phenomenal,” says Westmore-land. “That might have saved a hand or an eye, or even a life.” What the program unquestionably saved was money: The number of incidents over the full year was low enough that the firm paid $125,000 less in insurance premiums and saw many fewer sick days used. Total cost of the items redeemed in the incentive program: $65,000.
Strengthening Your Case
What might be the toughest part of selling incentive programs these days isn’t that companies are hopelessly skeptical of the benefits – it’s not hard to prove ROI when the cost of a pro-gram, by its nature, will be only a fraction of the incremental revenue or savings the program generates. Instead, “we often have to talk managers out of non-productive use of their incen-tive budget,” says Brian Galonek, president of All Star Incentive Marketing (asi/117110) in Fiskdale, MA. “Especially with safety programs, they want to throw cash at the problem: ‘Work safer and we’ll give you an extra $100 per quarter.’ ”
But “cash awards will go toward necessities. Employees for-get about them and go on with life,” he adds. As for gift cards, “these could sit on a shelf for months before they are used. At that point, people don’t remember who gave it to them.”
Mitch Berman, account manager for Chicago-based Hinda Incentives, says that over his 25 years in incentive sales, he’s found that “many firms are not inclined to make the effort to create a program that goes beyond the gift card, the debit card or cash. They think that a $250, a $500 or a $1,000 gift card to Target or Home Depot is enough to make people move.” But even if people don’t use award money to buy necessities, “a new grill or similar aspirational product will probably require them to go into their own pocket too, which dilutes the award effect. Why not just let them choose the grill from you? I tell decision-makers that for maximum impact, you only need to make a little more effort upfront to create a program full of tangible awards that will remind people of the effort they made to obtain it.”
Here’s another angle: While travel awards are almost always used for the highest level of sales performers, “motivating the middle 60% of the sales force is the key to an organiza-
Takeaway Tip: Incentives don’t have to be super-
expensive. This safety awards program including items from
$5-$25 resulted in a decrease in safety incidents from 54 to 17
during the same period and $125,000 less paid in insurance
premiums, and the cost of items redeemed was $65,000.
Inspiration
Takeaway Tip:
Motivating the middle 60%
of the sales force is the key
to an organization’s success,
so encourage your client to
think outside rewarding just
the superstars.
Takeaway Tip: Given the chang-
ing nature of preferences and rewards,
print catalogs are falling by the wayside,
replaced by online catalogs that can change
quickly. As for those preferences, age,
geography and other elements must be
examined through field interviews and
other research on a continual basis.
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tion’s success,” Galonek notes. Especially through a points-based recognition program – where reps can redeem points for electronics (the most popular category), jewelry, sporting goods, home goods and other items with brand-name cache – companies can do well by progressively rewarding reps’ incremental improvements.
To wit: If a rep rang up $100,000 in revenue in Q4 last year, hitting that number in Q4 this year earns 200 points; 10% above the number earns 300 points, while 20% above the number earns 500 points. And remember that “the top 20% of your sales force is eli-gible for these awards too,” he adds. “So using product to drive monthly or quarterly goals will even boost their per-formance.”
In fact, incentive programs can be structured to change behaviors that will lead to rev-enue in future quarters, too. Getting sales or customer service reps to increase their engagement with clients and prospects will help fill the sales pipeline – even as sales reps tap into that pipeline near the end of a quarter in order to qualify for incentive-award points.
What You Can Deliver
Each client is going to have different needs of its incentive supplier. For instance, Berman works with one pharmaceutical firm that formatted a sales con-test with three reward tiers. His job: “Fill in those tiers with the latest and greatest stuff,” he says. “That client does its own communications, creative and marketing. They simply want award fulfillment and customer service.”
Actually, that’s not as simple as it sounds. Take casino marketing programs: Keeping players in the fold over time is a difficult task – one that relies heav-ily on constantly offering new waves of attractive items. Paul Gordon, senior director of sales for Rymax Marketing in Pine Brook, NJ, works closely with a few
casinos on their loyalty cards “so the program goes well right from the outset in driving customer engage-ment through giveaways.”
Among his favorite strategies: themed continuity programs. “The old supermarket programs were on the mark,” he says. “Shoppers got one part of a cook-ware set when they came in one week, and they got other parts if they spent a certain amount in each of the following weeks.” In the same vein, shopping sprees are always popular among the most sought-after casino players, “but these can be reduced in scope and category so that they’re themed. First, it can be an electronics spree. Three months later you
do home goods, and three months later you do sports and fitness equipment. This keeps people intrigued and engaged over time.”
“There’s wish-list functionality in all of these programs, so you have to stand out,” adds Galonek. His preferred method of doing so is to “let people pick their items, and then you present it in a face-to-face way. The Coach pocketbook or the big-screen TV is appeal-ing, but if you make an event out of it, you’ll really have them locked in. Even $50 or $100
gaming chips are not as good as interesting products in terms of people remembering their experience at your facility.” Gordon has actually hosted events where winners get to run through an actual merchan-dise warehouse or a temporary pop-up “warehouse,” to select items.
When a program is big enough, demographic and psychographic profiling is an important component for success. For instance, “for a rep in a Carib-bean country, the most meaning-ful award for them could be to get $200 in groceries,” says Berman. “For someone in southern Cali-fornia, the coolest award could be a new kayak.” Age, geography and other elements must be examined through field interviews and other research.
For incentive suppliers, maximizing a program’s
value as well as their own value to the client is
a matter of asking enough questions. “When a
company comes to us and says, ‘This is what we
need,’ we don’t necessarily take that as the final
word,” says Brian Galonek, president of All Star
Incentive Marketing (asi/117110) in Fiskdale, MA.
“We’ll take some time to figure out if what they
say is actually what they need.”
He cites an example: A manufacturing client
had updated a product model, and manage-
ment wanted to create an incentive program
to drive sales of the new model. But Galonek
asked them this: “What if the reps go out and
sell so many of the new model that produc-
tion can’t switch over quickly enough to fulfill
that volume?” Instead, the firm needed “a two-
pronged incentive plan that moved the older
model’s remaining inventory while gradually
ramping up sales of the new model. So we used
the reps with the most Type A personalities to
introduce the new model and we gave them
their own contest.”
When you dig a level deeper, it becomes more
likely that a program will succeed – and will
repeat next year. Even with existing business, an
inquisitive approach can refresh a program and
drive even better results.
Discovering Opportunities
continued on page 116
And don’t overlook seasonality as a factor in recipi-ents’ desires. Noah Lapine, president of Lapine Inc. (asi/249352) in Stamford, CT, has a home-interiors cli-ent whose business is strong in winter, when people spend more time indoors. The firm needed to drive off-season business, so Lapine built a customer pro-gram around summer-related items such as Weber grills. “It gets people thinking hard about doing proj-ects inside their homes sooner rather than later,” he says. And though branding on incentive items is not often recommended, ancillary items that comple-ment the main reward item can fill that role. In Lap-ine’s case, each grill came with a cover subtly adorned with the company’s name, plus a recipe set sporting the name in the corner of each laminated card.
Given the changing nature of preferences and rewards, print catalogs are falling by the wayside, replaced by online catalogs that can change quickly. “The younger generation wants immediate gratifica-tion, and they want the latest and the greatest,” Gor-don says. “So what’s hot today, like the BlackBerry Playbook and Michael Kors bags and shoes, might not be hot three months from now. Your online cata-log can’t get stagnant.”
What’s more, many clients want their incentive supplier to handle all aspects of a program – from the rules structure to the FAQs to newsletter updates to individual account summaries – electronically. If your firm does not offer such support internally, Lapine suggests that “you find a good partner for developing and implementing these tech-based solutions. If you
are upfront and transpar-ent with your clients about that partnership, there should be no pushback – they outsource aspects of their business too. This is a necessary investment in an area that’s not your strength.”
Picking the Ripe Fruit
Maintaining a constant conversation with clients will cause program opportu-nities to bubble up that even the client has not thought about. “I listen to my clients’ immediate needs, but I also try to get the bigger picture and get something new in their face every so often,” says Westmoreland. “I always seek out ways they can better their company and present some items that can go along with that.”
One area where she and others are finding oppor-tunities is personal wellness. Besides the engagement and goodwill such programs can foster, they also serve to lower insurance premiums, sick time and medical costs at a moment when employer-sponsored health plans face legislative uncertainty.
Westmoreland recently built a program where people earned even more points for placing step counters on their sneakers to verify that they were exercising as much as they reported they were. Also,
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Galonek. “Seventy percent of firms say they have a wellness program, but too many don’t get it right or make a half-hearted attempt. They have a gym; they hold a biggest loser competition; they’re in a volleyball league; they have a walking club at lunchtime. Those are good, but a true program requires constant communication plus incentives on the back end. You won’t get everyone involved, but if you get even one quarter of your people to be active in it, you’ll see cost savings and improved morale.”
In fact, All Star Incentive Marketing has seven wellness teams in which people can earn reward points for being active. To keep track, the firm monitors event sign-in sheets and online partici-pation in lessons and quizzes about specific ail-ments. What’s more, the program regularly doles out unannounced points as a bonus. “We might give 100 points more than expected if someone works on a survey or a project over a few weeks,” Galonek says. “We also give team leaders discretion to dole out smaller allocations on the spot. It motivates
people to do the right things much more often.”
Unannounced rewards can also make a strong impres-sion on the consumer side. For instance, Ford recently ran a program for its Explorer line – buyers received collapsible
chairs that fit perfectly into the SUV’s storage com-partment. The best part: The branded chairs arrived at buyer’s homes a few weeks after the purchase, extending the excitement period for new owners.
A Simple Change
Keep in mind that even if you approach a prospect about their incentive programs and they tell you they are already in place, you might ask to review them. And you could just save the day by going in and tweak-ing a lackluster program in simple ways.
Lapine talks about a beverage company that called his firm to order merchandise for a longstanding pro-gram. Rather than simply take the order, he asked about the objectives. “They said, ‘We do it every year and it’s just expected by distributors at this point; they would complain if we didn’t do it.’ ” The answer
Here are actionable tips from Michelle M. Smith
of OC Tanner, who was named one of the “10
Best and Brightest Women in the Incentive
Industry.”
• Find out what your key clients do to reward
or recognize their customers, employees,
channel partners and vendors.
• Find out who manages the sales contests.
• Get a copy of an incentive program from a
key client … and then
• Try something new!
Today's To-Do List
she turned the program into a game of mild espio-nage, where one “mole” was planted among each team of program participants to verify claims of increased exercise, decreased smoking, etc. Any-one who could positively identify the mole received additional points and a new mole was chosen to keep the game going. “It pushed people to tell the truth, but in a fun way,” Westmoreland notes.
“Wellness is a very ripe area for product use,” adds
Takeaway Tip: Wellness programs
are a prime opportunity for incentives.
Similar to safety programs, besides the
engagement and goodwill such programs
can foster, they also serve to lower insurance
premiums, sick time and medical costs at a
moment when employer-sponsored health
plans face legislative uncertainty.
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to the next question – What were the results each year? – made Lap-ine perk up even more. “They were getting participation from just 40% of distributors and the bene-fits were not being measured at all.”
Lastly, Lapine learned that the company gave dis-tributors a choice of just three items, all worth $15 or less. “The brand was going through the motions, but they thought it would look bad if they stopped doing it,” he says.
To reinvigorate the program, he did two things: added more choice and switched the program from print to online. “More items would increase interest, but we had to get the message out and keep it out there so that the perception of the program changed,” he says. And neither change increased costs.
The key element, though, was the creation of branded scratch-off cards that required logging in to a website in order to match up monetary amounts to awards. Distributors were informed that each ticket could be worth $50, $100, $250 or even $500. While most of the cards and the corresponding merchandise remained between $5 and $15, a few flat-screen TVs and other big-ticket items were added to the website’s
A Society of Incentive and Travel
Executives survey showed that
incentive programs can boost indi-
vidual employee performance by
27% and team performance by
45%. As we mentioned, superstar
employees are often rewarded with
travel, and if that's the route your
clients want to go for their top per-
formers, they aren’t alone.
Global performance improvement
company Grass Roots notes that
a high percentage of its clients are
incorporating travel incentive pro-
grams into their employee rewards
plans, and the firm predicts incentive
travel to grow throughout the year.
“When a sales incentive runs
for several weeks or months, the
buildup generated by teasers about
the destination through an ongoing
communication program can play a
huge part in motivation to achieve
targets, as can the brag factor of
wanting to be able to tell friends and
colleagues about a place they have
not visited before,” Kathryn Hulse,
communications consultant for
Grass Roots, told Travel Daily News.
Of course, you can play an inte-
gral part in these teaser packages
by offering your clients pre-trip
gifts, such as passport holders,
luggage tags and other items that
would be useful and create excite-
ment about the destination. Once
they arrive, encourage your clients
to have room gifts, such as T-shirts,
caps, beach towels and sunscreen,
all imprinted with “President’s Club
2011” or whatever the event hap-
pens to be.
Take a Trip
Takeaway Tip: Just
because an incentive program is
in place doesn’t mean it’s work-
ing. By asking questions and
reviewing programs regularly,
you can help accelerate results.
offerings. Soon thereafter, “people were constantly going to the web-site to see if they had a big-money ticket,” Lapine says.
In fact, participation doubled to 80%. And because the tickets were
given out to reward distributors’ reps for product placement of a single brand, success was easy to mea-
sure. The following year, the beverage company ran the same program for the launch of another brand, and once again saw favorable market-share results. “It proved that a fairly simple change in the incentive program raised enthusiasm and participation, and we could justify the program based on true business rea-sons,” says Lapine. V
Robert Carey is a NY-based freelance writer.
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