Incentive programs are flexible business tools that can be used to accomplish a variety of goals. Incentives can help you motivate sales teams, engage employees, build customer loyalty, and/or develop better channel partner relationships. One of the biggest benefits of incentive programs is their flexibility. By getting creative and utilizing incentive software, you can create a unique program that gives you an advantage your competition can’t imitate. Follow these 10 steps to learn how to create an effective incentive program:
Step 1. Determine your program goal.
Select a goal for your incentive program that is specific, measurable, achievable, results-driven, and timely. Doing the following things can help you determine what your incentive program goals should be:
- Find priorities shared by multiple departments.
- Assess whether you should aim for a long term vs short term incentive plan.
- Work with a data scientist who can identify sales and marketing issues you might have overlooked.
Step 2. Establish program budget.
Structure a budget for your incentive program. Most organizations face some sort of budget-limitations for their program, so be sure to allocate your budget where it will make the biggest impact. Some incentive program budgeting tips to keep in mind:
- You could share the incentive program budget between multiple departments.
- A co-op of non-competing companies can share incentive program costs and benefits.
- Using marketing development funds (MDFs) is another example of a collaborative budgeting structure.
- Consider the different levels of investment between different reward types.
Step 3. Analyze your audience.
Take a look at the demographics of your target audience. Segment your audience and identify which members have the most influence over helping you achieve your program goals. A few things that can help you pick the optimal incentive program audience:
- Determine who will get the most value and meaning from your incentive program.
- Don’t target high-performers only. Your majority middle performers can have the biggest impact on your growth.
- Keep the average age of your audience in mind. Different generations are motivated in different ways.
4. Select the right rewards.
Based on your goal, budget, and the interests of your audience, choose the incentive reward that makes the most sense. Reward options include debit cards, gift cards, merchandise rewards, and travel incentives. Consider the pros and cons of each reward type:
- The ROI of incentive travel can be up to $2.90 for every $1.00 invested.
- Online reward points programs are very suitable to large audiences since they provide rewards with a wide range of value.
- Debit and gift cards are perfect rewards for short-term sales initiatives, such as SPIFFs.
5. Identify key performance indicators (KPIs).
Which metrics can you track, before, during, and after your incentive promotion, to make sure you are on track to achieving your goals? Some examples include:
- Email open, click, click-through, and unsubscribe rates.
- Percentage of audience enrolled and average time to enrollment.
- Amount of rewards earned and amount of rewards redeemed.
- Participant retention and satisfaction rate.
6. Choose an incentive program provider.
Pick an incentive platform and provider that will engage your participants, streamline program administration, and enable you to achieve your goals. Some features your incentive provider should include:
- Incentive services such as participant support and reward fulfillment.
- A flexible solution that can change and scale with your objectives and needs.
- Access to analytics and reports to assess program performance.
- A variety of reward options.
7. Market your program.
Spread the word! Make sure your participants are aware, informed, and on board. Some best practices for program communication:
- Make sure your participant audience data is accurate and up-to-date.
- Get feedback from participants on their program experience.
- Analyze demographic data of your audience.
- Provide a mobile app option.
- Utilize direct mail marketing, which has a 4.4% response rate vs. email’s 0.12% response rate.
8. Train and engage participants.
Incentive programs drive behavioral change, but behavioral change takes time. Make sure you are engaging your participants and training them to be successful in your program. Some methods of increasing program participation and awareness include:
- Get executive buy-in. Top-down endorsement creates interest and validation.
- Throw a notable kick-off celebration to launch the program. This could include a raffle, contest, or launch party.
- Offer periodic opportunities to earn 2X and 3X reward points to boost engagement.
- Reward participants for program knowledge with training incentives.
9. Put incentive program management and monitoring practices in place.
As convenient as it would be, incentive programs don’t run themselves. You should treat them as living, breathing tools, monitoring and managing their performance accordingly. A few things will make this easier for you:
- Clean up participant data. Make sure you’re connecting to your audience according to updated contact info and preferences.
- Consult real-time analytics and reports.
- Assemble a team to assess and take accountability for the program’s performance.
10. Analyze and improve incentive performance.
Take the time to review your results. Establish what worked and what didn’t and what can be improved to generate an even bigger ROI for your next promotion. To get increasingly better results from your incentive program, consider the following practices:
- Run highly targeted promotions to focus on specific groups that have high revenue or growth opportunity.
- Restructure your reward payout rules to reward different behaviors proportionately.
- Consult with incentive program experts to develop new tactics based on program reports and data.
Want to learn more about setting up an incentive program?
Now that you know all the steps to create incentive programs, are you ready to start planning your own? Our free eBook, The BthruB Incentive Program Playbook, contains in-depth details and insights for each step of creating your incentive program.