Are you looking to implement a new channel incentive program, or revamp your current program? If you’re in the early stages of program planning, you might be wondering where to begin with incentive strategy research. Look no further! Based on years of experience helping companies plan, execute, and manage incentive strategies that grow their companies, I’ve found this research to be most useful:
Determine your incentive program audience.
Your audience is crucial to incentives strategies. Your program, even if it’s the most motivating phenomenon on the planet, is useless if it doesn’t motivate the right audience. The audience should consist of people who have the biggest impact on your bottom line, or the most influence over your immediate sales and marketing goals. Figure out who your incentive program audience should be by answering questions like this:
- Should you increase order quantity with existing clients?
- Do you need to expand the product mix customers are purchasing?
- Which of your channel partners are in need of greater mindshare or product education?
- Are you missing important data about your end-user customers?
Answering these questions will help you determine where your biggest opportunities for growth are, and which of your channel partners have the most direct influence over these areas of opportunity. There you have your incentive program audience.
Understand your audience’s preferences.
Once you’ve identified your incentive program audience, you need to build your incentive strategies specifically around them. As with any good marketing plan, you should avoid creating something that’s interesting or convenient for you, but is of value to your audience. Age, gender, marital status, and salary are all things that could influence what kind of rewards motivate your audience.
Directly asking our audience what kind of rewards they’d like to earn is certainly a good way to gain insight. If you go this route, keep in mind that audience often respond to this question with “cash.” There are some complications with cash rewards, however. The first is that people often say they want cash but are actually more motivated by non-cash rewards, according to some behavioral economics studies. The other problem is that cash rewards become more costly and less effective over time, since audiences associate it with commission or salary and use it on bills, car payments, and other expenses that don’t typically generate memorable, emotional associations.
Find incentive program examples and case studies.
The best sources of research are examples of successful incentive programs in industries and companies similar to yours. While every company is different, even within the same industry, incentive program case studies can provide important data on effective incentive strategies and the kind of results you can expect. Case study data will provide useful incentive strategy research you can show in presentations to get buy-in from decision-makers.
Define your incentive program goals.
Once you’ve conducted research on areas of channel friction and opportunity, along with gathering audience and case study insights, you should have the data you need to develop incentive program goals.
Use the ‘SMART’ acronym to guide your goal-setting: specific, measurable, achievable, realistic, and timely. This will likely require a bit more digging into you’re the state of your sales and marketing. You might even consider working with a data scientist to identify phenomena you might not have noticed on your own. I once worked with a data scientist who noticed something troubling about a client’s distribution channel. He saw that, within a segment of their dealers, their sales promotions or incentives had no impact. He narrowed in more closely on this dealer group and was able to accurately predict dealer attrition due to a competitor’s incentive program. The lesson here: don’t discount the ability of a trained outsider to notice patterns in your channel that you’re overlooking. It could be the most valuable incentive strategy research you collect.
Find out how you can measure and prove ROI.
Last but definitely not least in importance: research your method of measuring your incentive program’s success and proving its ROI. You should identify key performance indicators (KPIs), which will depend partially on your exact goals, but there are also standard KPIs that predict the success of most incentive programs. Here are a few:
- Open, click, and bounce rates of email communicates related to the program.
- Percentage of your target audience enrolled in the program.
- Average time it takes a participant to enroll in the program.
- Number of logins to the program.
- Amount of rewards distributed and redeemed.
Tools like Incentive Solutions’ incentive program ROI calculator allow you to easily tinker with different scenarios. This way, you can present some of the most profitable program structures, as well as demonstrate the program’s ability to adapt to varying objectives over time.
The quality of your incentive strategy research can make or break your program. Keep in mind that no two companies face the exact same challenges or objectives, but therein lies the strength of incentive programs. You can use them to achieve unique goals with specific strategies—strategies your competition can’t replicate. Working closely with channel data and incentive experts, you can share insights about your unique position in your market and distribution channel. With experience and expertise in your corner, you can create and launch incentive programs that facilitate measurable channel sales growth.