Home Page Employee Reward Catalogs, Incentive Program Catalogs, Travel Awards Incentive Programs Services: Fulfillment, tracking, reporting Employee Incentive - Recognition - Rewards Programs PFI News AwardLink On-line Catalog Contact Us Rock'n Run the Warehouse PFI, incentive rewards fulfillment, employee recognition
     NEWSLETTERS

 

     Archives: 2003  |  2002  |  2001  |  2000    |   Download PDF File of Current Newsletter


Issue: July 2003

Are Incentive Programs Effective? ... YES!

PROVING TO YOUR CLIENTS THAT INCENTIVES REALLY DO WORK HAS NEVER BEEN EASY. However, recent industry studies have yielded results that should make the job easier. Researchers for the International Society of Performance Improvement funded with a grant by the SITE Foundation completed an extensive study on the use and effectiveness of incentives. Their research was designed to analyze the complete body of scientific research on incentive programs; determine what, if any, research-supported conclusions exist regarding effectiveness and the circumstances under which they can succeed; benchmark these findings with actual business conditions through surveys and interviews with business executives whose organizations use incentives.

Here are some of the most relevant facts that emerged as a result of the study:

Incentive programs can boost performance by anywhere from 25%-44%, but only if conducted in ways that address all issues related to performance and human motivation.

Most organizations lack the knowledge or will to create properly constructed programs that yield desired results.

If selected, implemented, and monitored correctly, incentive programs—with awards in the form of money or tangible awards—increase performance by an average of 22%.

Team incentives can increase performance by as much as 44%.

Research found that incentive programs can increase interest in work. When programs are first offered for completing a task, a 15% increase in performance occurs.

Asked to persist toward a goal, people increase their performance by 27% when motivated by incentive programs.

When incentive programs are used to encourage "thinking smarter," performance increases by 26%.

98% of survey participants complained about program implementation. A program’s success and return on investment, obviously, depends on how well it’s operated.

The study also concluded that quota based programs were the most effective and contests and sweepstakes alone the least effective.

Are You A Supplier or Solutions Provider?

Are you looking to increase your sales volume? Have you been wracking your brain for new ideas and new ways to grow the business? Nearly every sales professional would agree that it is easier to retain accounts and increase volume with existing clients than prospect for new business. However, getting more business from your current customers can be somewhat like getting the proverbial blood from a turnip.

One thing you may want to look at is your relationship with your customers. Ask yourself how they view you. Do they see you as a supplier or a solutions provider. A supplier is one who works all the sales angles to build a relationship and get the account by selling them on their resource and capabilities "as a supplier." At that point the hard selling ends and the "supplier" waits for the customer to need his/her services.

 A solutions provider works just as hard to build the relationship and sell the customer on all they can do. Except a solutions provider goes much deeper by getting to know their client’s business, the challenges they face, how their organization is structured, what their sales and marketing goals are, how they are perceived in the marketplace and who their competitors are. By gaining as much knowledge and information as possible about their client, they can accurately and effectively identify ways to match their resources and capabilities with the needs of their client. Knowing your client’s business also enables you to establish credibility and allows you to present your ideas with authority.

Here are a few successful recommendations for establishing yourself as a solutions provider in the mind of your customer.

  • Do Your Homework
    If your client is a public company, get a copy of their annual report. Learn as much as you can about every division, product line and distribution channel they utilize. Find out who their competitors are and how they stack up against them. If you can, try to learn what incentives and promotions their competitors are engaged in.
     

  • Know Their Website
    If they have a website, visit it and become familiar with its content. Company websites can have a wealth of information including:

• How the company and its products and services are presented to their consumers.

• Who the company senior management is (often biographies are included).

• Press releases—This is a good way to find out about new products or services

• Product descriptions and possibly pricing.

• Company history.

  • Ask Lots Of Questions
    In addition to offline and online research, ask lots of questions. When you have your client’s attention (either on the phone or in person), get him/her to tell you about their sales and marketing goals, the obstacles they face, the marketplace challenges, distribution channel problems. The more you can get them to talk about their business and the challenges they face, the greater your ability will be to identify solutions. Also, you should ask for recommendations for who else within the organization you should meet to learn about their role in the company and the problems and challenges they face.

Live A Day In Your Client’s Shoes

One of the best ways to get to know your client’s business and identify problems is by spending time with your client in the marketplace. If your client is a restaurant or fast food chain, ask for permission to work a shift. If they distribute their product using route drivers, spend a day in the truck with the driver. Spend a day making sales calls with one of the salespeople.

One great example is of a marketing executive who was preparing for an important presentation to a group of McDonald’s and Coke Cola executives about a crew incentive that the two companies were planning to co-fund. To effectively conceive and present incentive recommendations to motivate the mostly 16-20 year-old audience was no small task. What the marketing executive did was to arrange to work for a day at a local McDonald’s in order to experience life behind the counter in a fast food restaurant. As a result of his day "in the trenches" several important changes were made to the incentive proposal and when it was presented to the Coke and McDonald’s executives, he was able to reinforce his recommendations by recounting what he had learned "on the job" and in interviews with crew members and store managers. This served to establish a stronger level of credibility with the clients and gave greater weight to the overall recommendations being proposed.

Ask To Be At The Planning Table

The best and most successful solutions providers are those who are invited to be in on their clients’ sales and marketing planning meetings and sessions. At this point you have the ability to immediately seize opportunities to work your company’s resources into their marketing plans. The only way this becomes possible is when you have successfully established yourself as a reliable resource and most important, an authority on the clients’ business.

Ultimately if you are going to be a solutions provider, you need to know what problems there are to be solved. To identify the problems you need to have done your research, asked the questions, and have established a level of credibility with your client. You need to be aggressively looking for opportunities to get in front of your client with solutions. If you’ve done your homework, established a reputation and are perceived as a solutions resource, you are certain to expand the volume of business with your client. Much more so than if you just waited for them to come to you.

The Bottom Line On Safety

Alot has been written in this newsletter about safety incentive programs and their value. But enough can’t be written about the ROI potential they truly yield.

The financial benefits of implementing a solid safety program that focuses on safe working habits (vs. reducing workers compensation costs or avoiding OSHA penalties) are more than worth the time, money and effort. According to recent findings in a study conducted by Governance Metrics International, companies that ranked high in health and safety performance also outperformed their competitors in return on assets, return on investment and return on capital. Equally noteworthy is the fact that public companies with solid safety records also seem to experience superior stock price performance.

Next time you’re presenting safety program concepts to your clients, remind them that a good safety program starts with prevention of the accident or elimination of unsafe work habits. Also, remember that safety programs that present large value awards for accident-free quarters, or ones that reward everyone for an accident-free period can promote injury-hiding and raise red flags with OSHA.

THERE’S MORE TO AWARDING MERCHANDISE THAN PRESENTING CATALOGS

Merchandise awards continue to be one of the most popular reward options presented to incentive program participants. With our eight printed award catalogs and an impressive online award selection, PFI leads the industry in the packaging and presenting of merchandise award redemption vehicles. But there is more to merchandise incentives than catalogs. Here are some additional ideas for ways you can work merchandise into your next incentive program:

Custom Selections
Incentive catalogs by design present "general" award selections. But sometimes general is not enough. To really get a motivational bang, a custom selection may be your best option. This is particularly true when you have good demographic information about your participant audience and can confidently present a selection that will have a greater appeal than a general award selection. For example, if you know your audience is young adults (like in fast food crew incentives), you will get a greater motivational impact by presenting them with CD selections, stereos, MP3 players, computers, games and sports equipment than a general selection that includes house wares, jewelry, apparel and home and garden products. The same would be true if you know that the majority of your audience is into exercise and fitness.

Another reason to introduce a custom selection may be to accommodate a client’s concern about participants being presented the competitor’s products as an award.

Themed Merchandise Promotion
Get creative when presenting merchandise. Build a custom selection around a theme such as music, movies, or sports. Here are a few examples:

Theme: Rock, Roll and Ride To Rewards
Merchandise Selections:
CDs, personal stereos, speaker systems, personal CD players etc.

Theme: In The Zone
Merchandise Selections:
Baseballs/bats, basketballs, gym bags, weight training equipment, sports memorabilia

Theme: Swing Into Action:
Merchandise Selections:
Golf clubs/bags/carts, golf balls, putting machines, gloves, golf apparel

Bonus Promotions
Merchandise can be introduced into an incentive program in the form of a bonus award in addition to points redeemed for catalog award selections. For example, you could offer a flat screen TV for a "fast start" bonus to the first 10 participants to reach a given benchmark.

Quarterly bonuses for top achievers could be presented as a surround sound system or Weber grill instead of points.

Overall top performance could include special award packages like a home theater system including all audio and video components plus a selection of DVDs and CDs. You could also put together golf packages including clubs, bag, balls and a cart.

Merchandise and Communications
It is often said that communications is the "insurance card" that can secure success for an incentive program. Communication elements don’t need to be limited to printed or online information. Use merchandise products like golf balls sent to all participants with the message: "Drive For The Goal" or "Be On Par For Awards."

Another way to introduce merchandise into the program communications is by presenting participants with short quizzes on the rules of the program or the catalog of awards. You can then offer a sweepstakes prize to a select number of respondents or you can select a single item like a calculator to present to everyone who responds.

Rock ’n Run The Warehouse
PFI’s newest merchandise product, a "Rock ’n Run the Warehouse" is literally a merchandise award "grab fest" run in the PFI warehouse in Cleveland, Ohio. "Run-Throughs" were extremely popular in the 70s and 80s but have since faded from memory, until now. Partners For Incentives has raised the banners, set the shelves and is at the starting line ready to deliver one of the most exciting award events you can possibly offer incentive program participants. An extensively promoted, well operated "Rock ’n Run the Warehouse" never fails to deliver results and is a profitable incentive reward opportunity, truly a win-win for everybody. "Rock ’n Run the Warehouse" is a perfect top team or top achievers award.

Don’t Limit Yourself To A Single Award Vehicle
All the ideas presented above can be included in any combination IN ADDITION to a catalog. The point is, an award catalog by itself works great. However, you can dial up the program activity, enthusiasm and support by creatively introducing additional award opportunities. The end results will be more revenues for you and, most important, greater success for your clients.

PFI’s staff of experienced, professional merchandise buyers can help you source and fulfill any non-catalog merchandise offering. Take a moment to review your accounts and see if there is an opportunity to introduce additional merchandise incentives.

A word about "BREAKAGE"

Ok, so you say these are great ideas but there’s no budget. Through preplanning you can set aside program monies to fund some of the options listed above. Another creative way is to take advantage of "breakage." To clarify, by breakage I mean the value of the points issued to participants that are never redeemed. The industry average is somewhere between 15%-20%. Unless you have a redemption history based on previous experience it is better to take the more conservative 15%. So, for a program budgeted at $100,000 in points with a 15% breakage factor, you would lose $15,000 in revenue. If, however, you used the $15,000 to implement some of the merchandise promotional recommendations described above you would not only retain the revenue, but you will enhance the program and motivate participants to even greater levels of success.

 

Back to Top

 

 


 

 

 


 

HomeCatalogs  |  Services  |  Programs  |  PFI News  |  On-line Catalog  |  Rock'n Run the Warehouse  | Contact Us

Partners for Incentives  ~ 6545 Carnegie Avenue ~ Cleveland, OH 44103 ~    Phone: 1-800-292-7371   ©Copyrights 2000 -2004     Site Design: DRG


PFI your one-stop resource for Incentive merchandise rewards fulfillment, employee recognition programs and awards catalogs.