Feature Article - May/June 2019

Be Proactive to Avoid Program Pitfalls

How to Recognize & Avoid Problems in Incentives & Rewards

By Rick Dandes

Audience Targeting & Other Issues

You can also proactively avoid problems through careful audience targeting, said Ric Neely, director of marketing, Hinda Incentives, Chicago.

"The goal of any program is to encourage people to change behaviors. But that means finding the right people who can reasonably affect the outcomes in the shortest time possible. Let's say your goal is to increase monthly revenue by increasing the number of services you provide customers. You may automatically think that would be a program targeting your outside sales personnel. But if you're outside sales team is strictly an acquisition team and solely focused on closing new customers identified through your lead generation system, using them as your only way to increase services may not work as well as you hope. It could even negatively impact prospects who feel they are looking for one service while your sales rep is pushing five services."

Maybe your product requires a service person to come out and install it and trainers to teach a customer's staff how to use it, after the initial sale. In this case, Neely said, you might be better off having these people concentrating on identifying more opportunities while they're onsite to expand your services with the customer. "A referral program for your installers and trainers could help identify opportunities targeted to the individual customer, so they're more likely to close when they go back to the sales team."

One of the big debates in building any program, Neely said, often comes down to the rewards. Some people feel that "cash is king" and that should always be the reward. But studies show it can cost three to five times more than non-cash awards.

"Some people only want to reward the top people and use travel," Neely said, "but is that going to engage enough to get the results you need? Others want to choose only one award while others want to make sure people can redeem for millions of millions of awards."

Common Mistakes

A perspective from a supplier also needs to be mentioned, said Scott Kooken, president, Links Unlimited, Cincinnati, Ohio. "We are a master supplier for incentive and loyalty programs," he said, "and from our perspective, we also see customers not look at the big picture in planning and implementing and managing programs."

One common mistake is order processes that are too difficult, so look for ease of engagement in the ordering process. Mismanagement of customer service and poor fulfillment are other common problems.

Meanwhile, setting unrealistic program goals is another common mistake, said Neely. If you set a goal that people automatically feel they can't achieve, they simply disengage from the program. Take the time to set goals that encourage people to stretch out of their ordinary comfort zones, but still seem attainable. That may mean looking at your past history and structuring goals based on what they have done in the past.

"One of the most common mistakes I have seen on the rewards side is managers selecting the awards they want," Neely said. "This is often when they make the mistake of choosing only one or two items as an award. But I can assure you, all of your people are different and each will be influenced by different rewards. Providing them a rewards portfolio with enough diversity to allow them to choose something that is meaningful and important to them personally can help them engage early and stay engaged throughout your program. But the trick is to make sure it isn't so broad as to be overwhelming."

LaSalvia believes that not having a clear understanding of your audience is one of the biggest mistakes that you can make with your program. Knowing your audience and their lifestyles and offering them a selection of rewards that meet their wants and needs is vital to the success of a program.

Another mistake is rewarding program participants only once a year. It is important to have frequent touchpoints throughout the year, so participants stay engaged and motivated with new goals and new opportunities to earn rewards.

Lastly, ignoring peer-to-peer recognition, especially in employee engagement programs, is a common mistake that negatively affects a program.

"Keep in mind," LaSalvia said, "that recognition doesn't have to be limited to a manager recognizing team members, and peer-to-peer recognition is an effective avenue to showcase appreciation and motivate employees."

Ira Ozer, president, Innovation Meetings and Engagement Partners, Chappaqua, N.Y., neatly summarized some other critical mistakes made by planners: If there is no plan or method to project and measure return on investment (ROI) for the program, that's a mistake, he said. Given such an oversight, no proven business case can be developed. Instead of being considered critical initiatives that must be done, incentive programs are often considered contests that are nice to do.

Sponsoring companies (buyers) are sometimes confused about different vendors' solutions and compare apples to oranges, Ozer observed. "This leads to many problems in actual pricing, inventory management, fulfillment, quality and customer satisfaction."

Ozer said a problem occurs when incentives are chosen because of the interests of the CEO or other leader, not the participants, so they are not appealing and therefore not engaging or motivational. And finally, he said, there can be an issue when buyers make assumptions about incentive technology platform capabilities, such as assuming that specific reports will be available, and then find out that their needs are not included and must be programmed at extra expense and time.