Right the First Time
Avoid Common Mistakes in Incentive Program Planning
The best strategy for dealing with mistakes when implementing a rewards and incentive program is to avoid making them in the first place.
So, what are the most common mistakes people make with their incentive programs? "That depends on which area of an incentive or recognition program you are focusing on," said Mike Donnelly, CEO of Hinda Incentives in Chicago.
Common mistakes are different depending on whether you're talking planning, program design, the award selection or communication, he said, "but there are three that always stand out to me: too little focus on initial engagement, enrollment and commitment; too few ongoing communications; and finally, what I call 'Launch and Leave.' What I mean by that is no ongoing plan to monitor program performance. The client launches the program and leaves it to its own devices. Then, they are surprised when it doesn't work as well as they would like."
When someone works hard to get a program launched without an ongoing way to track and monitor how the program is doing, that can be a problem. Just about every program needs some adjustments at some point, Donnelly said. "Unexpected things occur and you have to deal with them. Creating a way to monitor how a program is performing and then monitoring it regularly alerts you of problems and helps make adjustments to maximize your program results."
Most programs spend lots of time in design or looking to select the right awards to engage their participants or estimating budgets based on potential results scenarios, Donnelly explained. "There can be months of intense planning to launch an all-employee engagement program. Now, they're all set to go and there is no focus on how to get people engaged in the program. The assumption is, 'If we build it, they will come.'"
Organizations need to step back and look at the behaviors that they want to influence and incorporate that into the design of the program, versus focusing solely on the end result that they want to gain, said Theresa Thomas, vice president, strategic solutions, Hinda Incentives. "Because if people don't know what activities and behaviors they need to do on a day-to-day basis in order to get that end result, your program is not going to drive whatever it is you are trying to drive."
"The worst response an audience can have to a rewards program is indifference," said Dana LaSalvia, vice president of corporate communications and business development. Rymax Marketing Services, of Pine Brook, N.J. "Incentive, rewards and recognition programs are intended to engage and motivate audiences. If audiences are apathetic to them, that means you've missed the mark. Their indifference is a sign that the rewards offered neither interest nor inspire them."
Programs that don't take the time to think about how they will initially engage participants and gain their commitment early on will have trouble reaching their goals, Donnelly said. "It's worth looking at what activities and behaviors need to be reinforced in order to get to that organizational goal," he added. "Oftentimes, programmers don't want to take the time to do that. Finance managers, for example, might only care about that end metric and so don't incorporate those activities into the program design."
Communications is the lifeblood of any program, Donnelly continued. "You have to plan a communications campaign to regularly remind people about your program and the importance of their role in succeeding," he said. "Sometimes programs will leave it up to the managers to communicate the program to their people. That's especially true of employee engagement and recognition programs."
But think about the numerous roles managers must fill in today's organizations, which are always trying to increase efficiency and do more with less. "There's nothing wrong with engaging managers in the communications," Donnelly said, "but you need to give them tools to communicate your program and make sure they understand why it's important to support the program, too."
The best strategy for dealing with mistakes when implementing a rewards and incentive program is to avoid making them in the first place.
A well-executed communications plan should encompass all organizational influencers, the people who are running the program or influencing success in the program. That could be managers or field staff, added Thomas. "But also be aware that a communications plan could be poorly executed at the participant level as well. Poorly executed means communications that are not clear and don't drive a direct call to action, meaning the participant knows clearly what they are supposed to do to be successful in the program and when they are supposed to do it."
Ira Ozer, president and CEO, Engagement Partners, of Chappaqua, N.Y., said that two common mistakes he runs into concern business objectives and ROI. "Participants in a program earn and spend a lot of award points," he noted, "but it's a problem when there is not a connection to the objectives achieving measureable business results and a return on investment, as they are not well defined. This is especially common in recognition programs, because managers, and in some cases employees, are given budgets to issue recognition certificates with award points, but there is no way to prove that these recognition awards are achieving business objectives or measuring value that can help calculate an ROI."
Many companies spend far too much time thinking about the rewards they want to use and the costs, without determining the return they will receive from the program, Ozer said. "While it is important to manage costs and pay a fair price for goods, there are many factors that incentive companies typically include in their award prices that retailers do not, such as program design consultation, inventorying of the goods, a liberal returns policy, VIP customer service and more," he said.
Understand Your Audience
Anything that will make the end recipient of the incentive, rewards or recognition program unhappy is a mistake, said Eric Thiegs, president, National Gift Card, Crystal Lake, Ill. "That's easy to say, but what does it mean? How do the end program users get unhappy?" The answer is simple, he said. "There are four things that make recipients unhappy: They didn't get the correct reward that they ordered; the award didn't arrive fast enough; the reward was not securely delivered; or the reward carried a perceived value less than the currency used to secure the award, whether that be points, miles, cash-back, tenure or action-based behavior."
This is why incentive houses must ensure processes are in place to send the right product in the right affinity packaging to right person as quickly and securely as possible, Thiegs said. "If you keep the end users happy with speed, quality and security, you've tackled the biggest pain points of our industry."
Fraud is also something to watch for, said Paul Hubert, vice president of IT and operations at GC Incentives, Omaha, Neb. "From our position in the market, fraud is a big concern of customers in programs, and that's because you still have people buying gift cards or prepaid cards and putting them in a drawer to hand out for all types of program rewards. In those situations, there is lack of accountability, and procurement desires to solve for the lack of centralized control that exists."
Anything that will make the end recipient of the incentive, rewards or recognition program unhappy is a mistake.
Other things that can go wrong include not considering your audience when choosing awards. In other words, making sure there is choice that is robust and of high value to appeal to all demographics and award amounts, and thinking through reward delivery logistics of rewards tied to events.
"There can be too much time and money focused on 'the system,' and this takes the focus off people and behaviors," Hubert said. "They identify with the system and not the program itself. We often see RFPs for a scoped solution that is way beyond what some companies need. And we've seen clients that have a robust platform when all they needed was a simple solution that would integrate with a system they already have. After implementing a new platform, they realize down the road it is too complicated and not used to the level of investment."
"Our SuperCertificate and GiftPass solution helps curtail fraud," Hubert said. "We have a system that allows creation of multi-member accounts that enables authorized individuals at companies to purchase using a purchasing card and gives reporting around the purchases as a record of what was purchased, who it was given to and who it was given from. Our certificates can be cancelled and reissued if lost or stolen, and if it is fraudulently used, we can often stop the redemption of the certificate before a gift card is sent out."
You don't have to have gift cards in a drawer, he said. You can order certificates and they are sent within minutes. And the recipient can get what they want from a selection of hundreds of gift card brands, which solves the challenge of providing enough choice.
Suggested Solutions & Best Practices
The simple answer to avoiding mistakes is planning, Donnelly said. "Spend time thinking about your participants. Ask yourself these questions: What can I do to make sure that my people learn about the program, and what can they do early on to show they are engaged? How can I keep the program top-of-mind with my people? How can I use the program to create heroes in my company and promote those heroes to others? And what metrics can I use to see if the program is working as we need it to? Are there leading indicators I can be tracking to help me see if the program is on track? If you can't answer these questions, there are probably some adjustments you need to make to your program."
Define your objectives, strategy and ROI, Ozer said. "Make sure the first thing you do when planning a program is to define the business objectives, make sure the strategy aligns with those objectives, and project ROI scenarios based on different levels of engagement," he explained.
Sometimes companies run various types of incentive or recognition programs because they want to do something, versus thoroughly assessing the objectives, best strategy and planning for the return, Ozer said. "Focus on the program results," he said. "When planning the program, the primary focus should be on the results and all of the services necessary to achieve them, including program communications, technology to track and report performance, training, and ROI assessment and analysis. The awards selection and cost are just one component and usually not the most important one."
"Develop a communications plan for your program to include goals, a theme and a variety of media using a consistent theme to keep things fresh and top of mind," Hubert said. "If possible, send awards with a communication that includes the theme and reinforces reasons for the reward. With today's innovations, you can create or add a game with complexity. At GC, we have fun games and even the ability to add video to reward communication at a low cost and fast turnaround."
Understand your participants, said LaSalvia. "The first key in offering rewards that appeal to your audience is understanding what's popular," LaSalvia said. "Redemption trends tend to mirror retail trends, so it's important to offer program participants the items that are top of mind for today's consumer."
After that, organizations should align themselves with a partner who has the technology to produce a competitive recognition and rewards platform. It should deliver participants a seamless and immersive rewards experience, while offering a wide variety of today's most in-demand merchandise from the most popular brands. Understand what's important to your audience, give them access to an easy-to-use rewards platform and select rewards that meet their specific wants and needs. Only then will your program be successful.
Consider ways to leverage systems and technology you are already using to reward and recognize, Hubert added. "It's now easier than ever to capture data and send out orders for rewards with files and API connections," he said. "We have enhancements like a digital wallet that allows for points accrual without an expensive platform build. Really go out and explore unique solutions and share what you have to work with the vendors you are considering."
Thiegs added, "In our experience, proper automation is critically important. That's why we have gone to great lengths to automate as much of the reward experience as possible to ensure the right reward reaches the right person in the right amount of time. If you can take manual, error-prone work out of the redemption and reward process, the end users receive the highest quality experience in the fastest amount of time."
"Conversely, while this is what's important on the fulfillment side, you need to remember that from a customer service perspective, giving your clients access to live customer service support is critical when an end user is upset," Thiegs added.
"A live customer service team can make a huge difference," he said. "If customers can call a system and speak to a live person without ever having to push '1' for this or '2' for that, then their level of frustration is reduced from the get-go. They can immediately talk to a live person who can help with an update on a reward or incentive order. In this way, you have combined automation with 'humanation' in order to avoid the mistake of having an upset end recipient for any length of time."
The Importance of Buy-In
For any program to succeed, experts say, you need buy-in from all players, from top to bottom—from the C-suite to managers to the employees and participants.
Thomas offered one example of a "program fix": A client relaunched a program, she said. "The reason they cited for their prior program not being successful was lack of manager engagement. They felt the managers hadn't been properly trained on proper techniques for rewards and recognition, such as what words to use to be effective, and what frequency do employees expect for feedback—all the common things that managers need to understand in order for a rewards and recognition program to be successful."
As part of the relaunch, time was spent learning what the managers understood from a recognition perspective and then training them to be better recognizers. The other emphasis was on how to reinforce this on an ongoing basis so that the program did not become stale over time.
"That goes back to your communications and training plan and making sure you have one that is properly executed," Thomas said. "Managers need to be monitored to ensure that they are doing all this in a timely and very clear fashion."