Adapting Motivation & Incentive Planning & Programs for Small & Medium-Sized Businesses
By Rick Dandes
Small and medium-size businesses (SMBs) have the same need to motivate and engage employees, channel partners and customers as large companies. "But there are some unique challenges faced by SMBs that have to be overcome to be effective, such as access to expert advice about how to structure incentive, recognition and loyalty programs, the technology platform needed to power them, award selection and fulfillment and more" explained Ira Ozer, an incentive and engagement consultant, adviser to the C-Suite Network, and president of Engagement Partners, of Chappaqua, N.Y.
Most incentive companies and award suppliers tend to focus on working with large companies, Ozer said, because the budgets they have are much larger than SMBs. It usually takes as much time to design and manage small programs as large ones, and often small companies are privately owned with a "do it ourselves" mentality and are much more sensitive to the prices they pay for goods and services.
The good news, Ozer added, is that some companies do work with SMBs and offer excellent solutions. The reason for that is simple: The SMB market represents approximately 80 percent of businesses in the United States, which is a significant opportunity for the incentive industry.
Susan Adams, senior director of engagement, Next Level Performance, New Brunswick, N.J., explained that it can be difficult for a small business to commit the resources to manage a reward and recognition program. "It is important for SMBs to consider, though, that these programs—among many other benefits—can have a profound impact on retention. The cost of turnover, when rolled together across all employees and departments, takes a real toll. By reallocating some of this expense to offset the cost of establishing and operating a meaningful engagement program, an organization can also reap the other benefits of engagement: profitability, customer satisfaction and reduced absenteeism, among many other metrics."
In other words, Adams contends, reward and recognition programs are an investment, and a worthwhile one.
When spread across an organization with tens or hundreds of thousands of participants, the programs' operational costs are reduced on a per-person basis. "Smaller organizations," she said, "must make tougher decisions on what kind or program and what level of support from a third-party provider they really need. They might choose an online platform that includes robust automated communications, or seek out a provider specialized in small to mid-sized firms. It is still entirely possible to run an effective program, with manageable entry and administrative costs."
Overcoming Differences in Scale
In working with a small business versus a larger corporation, said Bill Martocci, president, Carlisle Sales and Marketing, Belmar, N.J., differences can range from the overall formal culture, to the compensation structure, to the amount of red tape and decision-makers you need to engage to get things done.
"Small companies are generally more nimble and able to change and turn on a dime," he said, "while a larger corporation has obstacles, various levels of approval, and hurdles to navigate in order to implement what may be considered a simple plan."
Retention of employees and customers is just as troubling for small business as for the larger. However, that small business tries to formulate a plan, create the concept, organize and implement, all within their more limited resources of employees, money and time, Martocci said. "This leads to last-minute planning, securing of product, and often a tire-screeching execution of what they intended."
Small and medium-size businesses have the same need to motivate and engage employees, channel partners and customers as large companies.
Organization of the employee recognition, customer gift or sales incentive is often a problem, Martocci said. "Small companies often do not have the man hours to assign these tasks within a company and may feel that implementing a program through a traditional incentive house is cost-prohibitive. Small businesses need to know this channel exists and how to utilize all the tools within it."
That's true, said Jeff Dalton, president, Paramax, of Red Bank, N.J., who added that one of the biggest challenges small companies have is keeping up with the changes and advances in program technologies. Because of limited funds, Web technology providers tend to concentrate on bigger companies with larger budgets.
Meanwhile there are several advantages that small businesses have over their larger counterparts, when it comes to reward and recognition programs, Martocci said. "Small businesses," he believes, see more benefit to outward displays of recognition and gifting with "in person" presentation.
"On the employee side," he said, "the message resonates across departments and the company, while on the customer side, it is not so much an enticement for their client to utilize their business, but really another touch point to bring that customer in closer as a valued partner. Recognition of top performers, achievers of sales goals, company milestones, and years of service, as well as customer gifting, are the most common applications for small business."
If you are going to use gift cards as a reward, "There are several businesses who offer a gift card of choice product, which allows your recipient to redeem for a favorite brand," said Anne Jetter, vice president, new business development, Marketing Innovators, Rosemont, Ill.
"Giving a gift of choice from a provider such as Marketing Innovators, or National Gift Card lets the entire office choose where they'd like to enjoy breakfast or lunch from, turning a gift card into an 'office social' so everyone can share the excitement," Jetter said. "If sending a digital product, many sites allow you to drop a logo onto the template along with your customized message. This sends a clear message who it's from by highlighting your brand. If sending a physical card, create a branded holiday greeting card with your company logo, or a picture of your team, and affix the card inside with your signatures and customized message: 'Thanks—From the team.'"