Now that the economy seems to be rebounding – at least to the point that companies realize they need to introduce new products, attract and retain customers as well as qualified employees – incentive programs are taking off with a vengeance. While incentive programs are nothing new, many companies are just now starting to dip their toes in and formalize the process of incentivizing employees, third-party sales people, distributors and customers.
Questions abound about how to set up a program, how to manage it, what types of behaviors to reward, what to give, etc. And if you move too quickly without first answering those questions – and being aware of various pitfalls that can occur – you could be setting yourself up for failure and disappointment.
After managing programs for some of the world’s largest brands over the past seven years, we’ve learned there are things you should definitely do when setting up your program. Equally important, we have learned many things you definitely should not do. Of course you’ll learn as you go along with your own program in terms of what works and what doesn’t. But if you can avoid these six key things, you’ll be well on your way to creating a successful program that will deliver years of positive results:
1. Make Confusing Rules:
The key to engagement is simplicity. Let’s face it – unless you’re setting up an incentive program for a law firm and the participants live for fine print, your participants are not going to take the time to read and understand confusing rules. It should be very straightforward: if you do this you will get that. It’s no different than providing an allowance for your kids: clean your room, do the dishes, clean the bathrooms (okay, there’s no incentive in the world that will make them do that), you’ll get an allowance every Saturday. If you don’t, you won’t. When participants understand that a specific behavior is associated with a payout – and the moon doesn’t need to be full on the third Tuesday in months without an “R”– they will participate.
2. Keep Changing Parameters:
Okay, let’s say you’re running a 5K road race and you’re doing pretty well – chugging along at a decent pace that will actually mark your best time ever and the first in your age group. Then just as you spot the finish line, they move it 10K down the road. And instead of winning a $500 prize you’ll now get a set of dessert plates recovered from a garage sale. Still motivated to finish first? Or to finish at all? If you’re a die-hard runner you probably will. But for the average person you’ll most likely pull up and stop where the original finish line was located. The fact is that changing rules in the middle of an incentive program – or adjusting them drastically each year – is going to have the opposite effect of motivation. You can’t make incentives a moving target. Plan your rules well and then live by them. If you need to adjust, do them slightly and only at the start of a new program year. Your participants will then associate the specific activity with a specific reward and not give up until they’ve achieved it.
3. Cancel Right In The Middle:
Believe it or not, some companies will create elaborate programs and make their participants go through all sorts of gyrations to earn points, rebates or dollars – and then they will kill it before they make any payout for various reasons. Unless you never plan to run an incentive program again, this is the most de-motivating thing you can do. People will not forget what happened the last time you started an incentive program and will be far more reluctant to take part knowing the rug could be pulled out at any time. Again, plan your program well and follow it through to the end of the program period. If adjustments need to be made, do them prior to the next kickoff. And if you determine that incentives just aren’t for your company, at least follow through on the commitment you made to participants when you first rolled it out. You can then communicate why the program needed to be suspended. That way if you ever decide to revisit incentives, your participants will understand that you made the necessary adjustments and can be trusted to fulfill your promises.
4. Roll It Out Without Testing Properly:
Nothing is perfect – especially when you are starting a program you’ve never done before. There are always contingencies you couldn’t have anticipated. Ever bought the first version of any product? Sure, you’re the first on the block to have one. You’re also usually the first in the repair shop or demanding a refund. So when you are developing your first incentive program do yourself a favor: test market it first. Because even though your incentive company will guide you on what works or you may mimic the success of a program at another company, the fact is that every program is completely different. How you incent, why you incent, how people will react – it’s always different. So roll it out to a small group of employees, sales people or customers first.
Do your beta testing and get quality feedback before unveiling it to the full populace. This will serve two functions:
a. First, you will ingratiate your test group to you and they will feel part of the process. By using their feedback to tweak the program rules and functions, you will gain real world knowledge of how the program will ultimately be perceived – and you will drive participation. Let’s face it – everyone likes to voice their opinion, and they are appreciative when a company actually asks them what they think and how they would make the program better. And, as a result, they will become ambassadors for your program. And nothing carries more weight than a peer’s endorsement.
b. Second, you will identify any problems or loopholes that may be lurking within your program. Did you really mean to give every employee one million points so they can now retire? Or did you mean to cap it at one thousand points per quarter? No matter how much you think something through – and have your legal department pour over every detail – if there is a gap, your participants will find it. And exploit it – wittingly or unwittingly. This is especially true of gaming incentive programs, which can be rife with abuse if not handled properly.
5. Don’t Promote Your Program:
When was the last time you bought a product you never heard of? Seriously – think about that: you go to the store with the specific intent of purchasing something you have never seen or heard of before. You never saw an ad, got a mailer or e-mail blast – nothing. Probably not that often unless you’re a serial consumer. Yet for some reason many companies feel that launching an incentive program in and of itself is enough expense. People will find out about it. There will be word of mouth. Here’s a reality check: no they won’t. The fact is that if you don’t have regular promotion and dialogue about your incentive program with your participants it is going to die a slow and painful death. You will have wasted whatever money you spent to build it in the first place and will have received no payback as a result. You must roll out the program with a splash – and then keep promoting it to keep it fresh. Keep the website fresh; keep your communications intriguing; keep the success stories in front of everyone. Unless your program embarrasses you, you need to constantly sing its praises – and keep your messaging simple and consistent, just like the program itself.
6. Don’t Provide Good Incentives:
Everyone has a price, or so it’s been said. The truth is it’s basic human nature to do the things that are most likely to provide the greatest benefit. Ever see a sales person put in as much effort into selling a product that offers 2% commission compared to a product that offers 10% commission? Of course not. Or how about getting them to call on a new prospect instead of reaching out to old standby customers? Nope. As you set up your program you must keep in mind: is the payout commensurate with the activity. Sell $10K worth of product and get $1? I don’t think so. Not only is the payout a slap in the face to the participant, but how much time will they waste engaging with the program to earn one buck? Your incentives don’t need to break the bank – but they also need to show that you respect the value their activity is bringing to the company. If done properly, your incentive will help you increase sales, improve morale, and drive loyalty. What you payback to participants is a direct reflection of what you think of those outcomes.
Sure there are plenty more do’s and don’ts of being successful. And you will no doubt bump up against many of them in your quest to create a solid, fully functional program. But if you can avoid these six great big don’ts you will be well on your way to altering behaviors for the better – and delivering results that will truly improve your bottom line.
