Feature Article - January/February 2018

Small Wonders

Adapting Motivation & Incentive Planning & Programs for Small & Medium-Sized Businesses

By Rick Dandes

What to Know About Providers

Incentive providers vary from large incentive houses and promotional product distributors to manufacturers representatives, Martocci explained.

The larger incentive houses are great for formal programs, and are able to provide a wide array of gifting options, distribution of the goods and measurement of the success of the program (ROI). Some promotional product distributors may already be in contact with the small businesses and have developed a relationship through some of the other items they may sell them like logo'd apparel.

"And then there are the manufacturers reps, who have direct relationships with the brands these companies are seeking," Martocci said. "There are many misconceptions small businesses hold about working with a rep. They think working through a rep is more expensive when reps typically offer below retail pricing."

Reps can help with larger quantities, securing the stock that small businesses would need to source from multiple retail locations on their own, Martocci said. "Reps, while often being less about measurement and more about price and delivery, can provide options that could be more suitable for the right fit for that small business. Reps bring with them the experience of having successfully arranged, organized and implemented other incentive opportunities, and that experience can help take the burden away from the small business of having to do it all."

Keys to Success at Any Size

When putting together a program, Adams suggested, "make it consistent across the organization. One of the biggest mistakes we see is when programs become too decentralized, with managers running ad hoc programs independently or within branches. In addition to the company messaging becoming too watered down, this creates inequity. It also creates a situation with too little control over the expense and any related tax issues."

When the recognition program is a stack of gift cards in a drawer, they often end up on the expense report and not in the HR budget with appropriate reporting, Adams said.

"The other problem we come across is a lack of communication," she added. "To really thrive, a program has to be top of mind. This means communicating to the entire audience frequently and with engaging materials. But this also means communicating to managers. If they don't know about the program, or don't fully understand that their active participation is fundamental to success, it will lose momentum and authenticity. Without communication and senior leader adoption, it can be really difficult to gain traction and build motivation."

For a company of any size, it's important to define the organization's values and goals and to create a framework and communications that bring people back to those concepts with regularity.

"Teammates thrive when they know what to do, feel appreciated for their efforts, and know that they are part of the social group of the workplace," Adams explained. "Rewards—from elaborate incentive travel programs to points to be used toward gift cards or merchandise—connect effort with personal attainment. This approach allows employees to take up the greater purpose of the organization and increases the chances of success."

Adams suggested that recognition programs be rooted in such values as collaboration, accountability, respect, ethical behavior and service.

"Our formal recognition program, for example, ties awards and public recognition events to our values, and encourages teammates to live the brand," she said.

Day-to-day recognition allows teammates to shine a light on the great work of their colleagues, as well as find information on recognition and reward programs, company events and other news. Achievements are rewarded with points that can be used for a wide array of options, connecting individual wishes and needs with the goals of the organization.

Knowledge Is Power

Melissa Van Dyke, president of the Incentive Research Foundation, is out to change the perception that small businesses are less adept at the use of non-cash awards.

"That is absolutely contrary to what we found in our research," she said. (See http://theirf.org/research/imra-small-business-merchandise-market-study/1874/), citing a 2016 IRF report.

"Even though they are small businesses, we found that three quarters of them are using merchandise rewards across the spectrum, with employees being at the top of the list," Van Dyke said. After employees, come salespeople, distributors and customers.

The merchandise budgets of small businesses vary considerably, according to the IRF report. Nearly half (47 percent) of businesses that offer qualifying merchandise have budgets of $10,000 or more. The vast majority of these businesses report their budgets have grown or stayed steady in the past year. Nearly half (47 percent) of the SMBs surveyed reported that their merchandise budgets have increased.

Overall, the IRF study found small businesses used merchandise rewards for a variety of objectives, whether that is morale, rewarding top performers, or even meeting sales quotas. "That was our biggest finding," Van Dyke said. "And the businesses that we talked to were growing as well. I don't think it is coincidental that three-quarters of the organizations we spoke to were growing, and nearly three-quarters were using non-cash rewards with employees, salespeople and distributors."

Even though small businesses are using non-cash awards and merchandise specifically to reward and recognize their key populations, Van Dyke said, "a majority of them are still purchasing rewards online, and many of them have not yet seen the advantages of working with a brand, or recognize the services and advantages that a merchandise rep can provide, which is even better for a small business: such as doing the pricing. That is one area where we can really help small businesses understand—that there is a better way to source their merchandise item than they might currently be using."

Other takeaways from the report, Van Dyke said, include that "decision-makers are generally unfamiliar with all the services and advantages a representative can provide. However, they indicate value for services a rep can provide that they don't currently have. For example, below-MSRP pricing is something they do not currently get and they are keenly interested."

Merchandise-purchasing small businesses source items online or from retailers more often than they do via sales representatives, the report noted. Results show they use multiple channels to source their merchandise. Among those who purchase merchandise from manufacturers representative(s), it is equally from those selling promotional products and those focused on brand-name merchandise. Many firms use both types of representatives.

The solution for many smaller companies begins with more knowledge. While it might be more difficult for some smaller organizations to keep up with the new technologies and programs, SMB executives should know that there is a plethora of excellent research, training programs and best practices available from industry associations including the Incentive Marketing Association (IMA) at www.incentivemarketing.org; the Incentive Research Foundation (IRF) at www.theirf.org; Recognition Professionals International (RPI) at www.recognition.org; and the Enterprise Engagement Alliance (EEA) at www.enterpriseengagement.org.

Educate yourself, Dalton said. "Join these organizations because they produce a lot of information that can be valuable to your business and more specifically, your recognition and reward programs. Join IMA, and read Premium Incentive Products magazine."

In addition, Ozer, of Engagement Partners, said, there are some incentive agencies, technology companies and award suppliers that have excellent solutions for SMBs, such as Hinda with its Engagement Express and Universal Rewards Exchange, Paramax with its Pepper Social Recognition Platform connected to RepLink with various distributors, Certif-A-Gift with its packaged plateau programs, GiftCertificates.com with its SuperCertificicate and many brands with simple ways to provide choice for incentive winners at various price points. And don't forget to look for a manufacturer's representative to help out. You can connect with these savvy professionals by visiting www.imraonline.org and using the "Find an IMRA Pro" tool.