Why provide incentives in the first place?

Any of those sound familiar at your company? If so, you could be in for a rude awakening as competition tightens, employees look for better opportunities now that the economy is gaining momentum, and customers search for the most value-added experience. The truth is that incentives are a necessary part of existence for any type of company – retail, industrial, medical – you name it.  Because no matter how incredible your company or product or service may be, someone is always out to beat you at your own game.  Stealing your employees, customers, distributors and, ultimately, your ability to stay relevant in your industry.

First, let’s attack the belief that employees should be happy to have a job at all.  True, in a tough economy companies can maintain the upper hand and keep employees who would otherwise go elsewhere.  But guess what?  Once the economy improves, they will do exactly that.  If you want your top performing employees to stay with you during the flush times, you must take care of them during the down times as well.  Sure you pay employees to do a job – but if you don’t incent them to go above and beyond, that’s all you’ll ever get them to do – a job.  But when you provide a carrot, the top and mid-range performers are going to bite.  I say “top and mid-range performers” because, let’s face it, not everyone is going to do more than the basics to keep their job.That’s fine – you will always have people who are willing to work in the trenches, but not die in the trenches for you.  But for the people who always go above and beyond – and for that middle tier that will go above and beyond if motivated properly – a carrot is the best way.  Ultimately everyone wants to feel necessary and appreciated; they want to know that you recognize when they are going beyond the call of duty.

Next, let’s talk about that fickle group of people called “customers.”  Not only do you have customers, but guess what – you are one as well.  Every day you – the person who is trying to cater to and create more customers – are being courted by every company trying to sell you everything from sneakers to cars to toilet paper.  And what motivates you to keep going back?  More importantly, what motivates you to leave one particular company or product in favor of another?

There are several things that determine customer loyalty – the top two being the most obvious: product quality and customer service.  How many companies claim to have the best of both?  Everyone, right?  So in a world of “supposed” parity – the element that will set you apart is the above and beyond.  Collecting airline points, grocery store points, loyalty cards at your local pizza or sub shop – they all have one common goal: to keep you coming back.  Does it work?  Take a look in your wallet or your key ring for that answer.

Your customers, whether you want to admit it or not, are being assaulted every day with messaging designed to undermine what you do for a living.  And while you must never sacrifice product quality or customer service, you also should never leave out the one variable that may give you that final leg up over the competition: an incentive to keep coming back.

Finally let’s look at the last group of individuals critical to your success: the sales force.  Whether you have an internal team or you use third party sales or channel sales partners through a distributor network, the goal remains the same – get them to sell more.

Now you might think that with your internal team this should be obvious, right?  You’re paid to sell our products – if you do, you have a job and commissions.  If you don’t, you have neither.  But, again, getting sales people to reach beyond their comfort zone – make that extra call, push for cross-sell opportunities, seek out customer pain points – requires more than just a commission.  It’s always been said that 80% of sales come from just 20% of your people.  But have you ever asked yourself why that is?  Perhaps it’s because that 20% of the population is naturally motivated – they love what they do, they love the thrill of the hunt and, as a result, they get compensated accordingly.What about the remaining 80% of your population?  If they were given additional incentives to go further, you will no doubt see both your sales increase as well as your percentage of people contributing to that success.

With distributors and third party sales it’s a similar story – with the added pressure of having your product go up against whatever other products they have in their arsenal.

Those products, by the way, are your competitors.  Even if the products are not direct competition to what you offer, anything that takes your distributors’ mind off selling your product is a direct competitor.  All things being equal, sales people will always gravitate toward the low-hanging fruit.  If they can sell another product easier and make more profit than yours they will.  But if you tip the odds in your favor by offering them an added incentive to sell your product – guess what?  They will sell it.  Again and again.

So take a look around your company and, more importantly, listen to how employees, customers and sales people are treated.  If you’re not motivating them, you’re de-motivating them.  And that leaves them susceptible to theft from your competitors.