What's In An Incentive Program (ITAGroup)

WHITE PAPER ITAGroup, Inc.

WHAT’S IN AN INCENTIVE PROGRAM? Ask good questions and communicate thoroughly to generate the best results.

A carefully planned and well-administered sales incentive program has the potential to revitalize your sales force, redefine how you motivate your sales representatives and reenergize the sales results you’re looking for—even in a still-struggling economy.

Before you can build a successful strategy that will be embraced by a busy workforce, you need to ask a few key questions. At ITAGroup, Inc., the experts in the Marketing Communications Group know which issues to address, what communication solutions work best and how you can maximize the impact of your company’s significant resources.

START WITH A SIMPLE QUESTION Let’s say your company is looking to increase market share by seven percent in two years. You’re tasked with communicating the sales incentive program that supports this challenging goal— which includes keeping your participants informed and motivated to hit their personal goals wrapped up in the overall program.

“...nearly 90 percent of the audience indicated the communication materials are the reason they participated in the incentive program.”

Before developing a communication plan and creative direction, sit back and ask yourself a simple question to help you get started: “Is this program intended for an internal employee-based audience, a distribution channel, or both?” The answer will point you in the right direction so you’ll know the best approach for each audience— and avoid headaches down the road. There’s a lot hinging on the reception— and the results— you receive: A survey of 810 participants in a 12-month sales incentive program for a Fortune 500 company shows that nearly 90 percent of the audience indicated the communication materials are the reason they participated in the incentive program.2

KEY STEPS TO IMPLEMENTING A SUCCESSFUL INCENTIVE PROGRAM3 1) Identify program objectives 2) Segment audience 3) Set goals 4) Complete front-end financial assessment 5) Design program

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The internal campaign: Build a personality from within When communicating a sales incentive program intended for your internal employee base, your objective should be to stand out from the day-to-day materials produced by the company. Employees are familiar with and understand your corporate look and style – seeing another piece of collateral that resembles “work” is not likely to grab their attention and build excitement.

So it’s important to build a unique brand, full of personality for your program, to add color and bring it to life. This includes setting an engaging tone with clever copy, creating attention-grabbing graphics and developing an overall campaign theme sure to be remembered throughout the life of the program.

An external campaign: Pitch loyalty to your partners Chances are your company either works with outside distribution channels or partners, or will at some point, and you’ll need to find ways to motivate that external audience. In fact, roughly 50 percent of all companies make use of dealer incentive programs.4 If your sales incentive program is being developed for certain channel partners or a distribution channel, the main objective will be to align your campaign and supporting materials with corporate branding. This type of program is commonly used as a loyalty program, so keeping the corporate logo, colors and current advertising styles will be critical to your success. The incentive communications will complement other materials in the market and continue to build brand awareness.

In the distribution channel setting, there are most likely competitor programs that will be competing for mind—and market—share. To help deliver desired results, keep the client brand front and center, partnered with a clear benefits statement for the program. Additionally, pick a program theme with a very clear message, such as “Partnership Pays” or “Your Choice Rewards” with the emphasis on loyalty.

Communicating to Channel Partners? Consider the Look and Feel » Keep client brand front and center » Provide clear benefit statements » Keep the program theme clear and simple Are You Willing to Wing it?

A 2008 WorldatWork Report shows that “52 percent of organizations operating recognition programs do not have a written strategy behind those programs.”5

MEASURE YOUR SALES PROGRESS To help you determine the type of sales activities to reward, consider the frequency of your communications. If the participant’s sales performance is measured monthly, then driving engagement and recognition weekly will be necessary. If the sales cycle is extended to quarterly, then a monthly touch point may be adequate. Frequent communications such as HTML emails, text messages and mailers ensure that the look and feel of the program, along with its key message, remain “top of mind” for participants on an ongoing basis.

Additionally, the frequency of communications for a program is critical to its success, as there is a direct correlation between awareness and participation. Studies have shown that if you receive a message three times, you “hear it,” five times, you “understand it” and 10 times, you “act on it.”

Considering that statistic—and the amount of messages the average person receives a day— your task of communicating effectively becomes that much more important.

REACHING PARTICIPANTS WHERE THEY WORK Research reveals that we all respond differently to different methods of communications. This is why the types of communications you recommend should be broad, covering the desired spectrum

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of various print, electronic and dimensional mediums to help resonate with different audiences.

What may appeal to a Baby Boomer—such as a newsletter—will differ from the HTML or social media that sparks the interest of a Gen-X or Y-er.

But that doesn’t mean you have to choose one method over the other—the key is finding the right mix of communication tactics, because integrating online and print, when used in a coordinated campaign, enhances the delivery of messages and improves marketing results.6 Additionally, 75 percent of organizations who use marketing strategies and tools to communicate reward policies and programs through segmented communications to specific employee groups indicated they were effective or very effective in their efforts.7 Speaking of different audiences, a “one-size-fits-all” approach is no longer an effective way to communicate to employees. The communication strategy behind a successful program should address the ability to send tailored messages to meet the needs of diverse audiences, whether it’s communicating to managers versus employees, or ambassadors versus channel partners.

To gain engagement with participants, meld your program’s branding into your corporate culture.

Make it a part of their everyday work lives. The effectiveness of your program can be increased by delivering your message so it appeals to their work style—and their senses. According to HOW Design, in addition to a strong visual presence, communications need a full sensory signature that transcends mere functional usage and becomes an immersive, memorable, compelling experience.8 What does it sound like? Look like? Talk like? Taste like? Your message will make an impression, set a tone and be memorable if you can align some, or all, of these factors. Innovative communication vehicles that go beyond a memo posted on the break room bulletin board include:

» a custom song or jingle that may be the trick to spreading the word; » multimedia flash movies that can deliver sounds and music with your imagery; » bold graphics on textured paper that can communicate a feeling; and » scented inks that can transport you to a tropic location faster than a photo alone;

TAKE YOUR MESSAGE ONLINE Logistics do play a key role in effectively reaching—and engaging—a workforce that’s always evolving. For example, if your participants spend a significant amount of time away from the office, sending print materials to work won’t solve your communication issues. Instead, providing a one-stop Web platform with social media, blogs, e-newsletters and reports may be your answer.

Providing access 24/7 will allow participants to gain everything from program knowledge, training, leader boards and rewards all in one easily accessible, updated and centralized location.

To help drive Web traffic, keep in mind that the initial awareness of the program’s website location will likely need a few other traditional drivers like direct mail, promotional items with the website address, announcements on the company intranet site and any other methods your company communicates with directly to employees. In fact, 67 percent of online action is driven by offline messages.9

WHEN TRADITIONAL COMMUNICATION WORKS How do you reach employees with different communication channels—and preferences for receiving information? While one individual may rely heavily on electronic communications, another may simply disregard emails due to the saturation levels. That’s not surprising when you consider that the average consumer is exposed to 3,000 marketing messages per day.10 If the work environment doesn’t allow for easy access to a computer, traditional print methods definitely apply, and shouldn’t be discounted in favor of electronic media. According to Yoram Wurmser, research manager at the Direct Marketing Association, “Even as marketers are bringing more digital media into their integrated campaigns, traditional media remains a core component of the marketing mix.” 11

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Supplying materials with your program logo to be displayed on a desk is very effective in keeping the program top of mind. You can take that approach one step further with items easily carried or worn such as wallet cards, key fobs and lanyards. In fact, people who receive promotional items and incentive products keep them for a long time—an average of seven months—providing repeat and consistent brand exposure for marketers.12 Assess communication needs by considering the environment where your employees work. Do they meet frequently in common areas where you’ll want to post reminders with posters, counter mats, floor graphics, wall murals, kiosks and flat screens? Or if you have a cafeteria for employees to mingle, table tents, program-branded napkins, balloons and tablecloths can help promote discussion about your program as well as remind employees of their potential.

Food For Thought: Nine seconds is the attention span of the average person— about the same as a goldfish.13 PREPARE FOR PROGRAM LAUNCH We’ve covered the importance of sales incentive programs aimed directly at employees versus distribution channels, how frequency is determined for a campaign and the purpose behind the mix of media in your solution. Below are some of the best practice recommendations to launch and operate a successful sales incentive program.

SALES INCENTIVE – SCENARIO 1 Length of Program: Six Months Audience: Management and Direct Employees Pre-Launch Phase The weeks leading up to a launch present an opportunity to build excitement for your program’s arrival. Not only can you use this time to build anticipation for the program, it also allows time to alert members of management so they’re knowledgeable about the program details. You can do this through:

» Webinars, » Web splash pages, » Teaser HTMLs, » Postcards/Mailers, and » Posters.

Launch Phase Start your program off right with a memorable event. Launch parties are a great way to get employees excited and provide support from management. If it’s not feasible to bring your entire audience together to one location, launch kits can be delivered with all the necessary materials.

We can provide the following materials to help you kick things off:

» Instructional letters for launching (Managers), » Announcement HTMLs, » Program website, » Brochures, » Flash movie, » Program-branded items (Can be used to decorate the room or be distributed to employees— balloons, candy, wearables, give-aways), and » Banners.

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“Launch parties are a great way to get employees excited and provide support from management.”

Operations Phase Keep the momentum going in your program with frequent reminders. The messages should always be timely, relevant and provide clear and concise information that not only informs employees of their progress, but keeps their engagement high in the program.

» HTMLs (monthly) » Web updates » Progress-to-goal emails (weekly or monthly) » Voice messages (monthly) » Text messages (performance-triggered) » Mid-program mailer (unique sizes and shapes) Awards Phase Recognizing employees for their success and providing a method for redeeming is the final stage of a program. Publicly announcing the top performers provides recognition and how-to success stories for future programs. These tools work very well to communicate achievements:

» Congratulations e-mails » Final program web postings

SALES INCENTIVE— SCENARIO 2 Length of Program: 12 Months Audience: Distribution Channel Pre-launch Phase The weeks leading up to a launch present an opportunity to build excitement for your program’s arrival. In the Distribution Channel model, it’s important that participants know that future purchases or sales will result in rewards.

Another critical factor in the success of your program will be your sales representatives' comprehension and the utilization of the program. Providing a sales incentive program to your sales force will give them a tool to promote your products and services and demonstrates customer appreciation.

This push/pull strategy is an effective method to establish a measurable ROI on an incentive program.

These communication tactics include: Audience Segmentation

Pre-launch Material Type

Your Sales Your Representative Distributor Audience Audience

Training Webinars X Web Splash Pages X Teaser HTMLs X Posters X Direct Mailer

X X X

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“Providing a sales incentive program to your sales force will give them a tool to promote your products and services and demonstrates customer appreciation.”

Launch Phase Start your program off right with a memorable event. Launch parties are a great way to get employees excited and provide support from management. If it’s not feasible to bring your entire audience together to one location, launch kits can be delivered with all the necessary materials.

Some examples of launch materials include: Audience Segmentation Pre-launch Material Type

Your Sales Your Representative Distributor Audience Audience

Announcement X X HTML Emails Flash Movie X X Program Website X X Posters X Program Guide X Announcement Kits X (welcome letters, program brochure, wallet card and key fobs.)

Environmental Graphics X Counter Mats X Program-branded X Promotional Products

“As your program reaches year end, it’s time to start planning the communication strategy and building excitement for the coming year’s program.”

Operations Phase Keep the momentum going in your program with frequent reminders. The messages should always be timely and relevant, and provide clear and concise information that not only informs employees of their progress, but keeps their engagement high in the program. Here are some effective communication tools to help you accomplish this:

» personalized HTMLs (monthly), » web updates, » progress-to-goal e-mails (monthly), » voice messages (monthly), » text messages (performance-triggered), » quarterly newsletters with personalized statements and testimonials, » best practices, » product launches, » online interactive training and games, and » online reports for sales representatives to track performance.

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Awards Phase Recognizing participants for their success, providing a method for award redemption and building excitement for the coming year is the final stage to a program. Announcing the program’s topredeeming awards demonstrates to participants how easy it is to earn and starts building excitement for the coming year. This can be done through:

» Congratulations email » Point balance mailers Realigning Rewards and Re-Engaging Employees Watson Wyatt 2009-10 US Strategic Rewards Report, “Landscape of Current Reward Programs” ITAGroup, Inc. “2008 Choice Rewards Communication Survey Results,” Aug. 4, 2008 3 Using Audience Segmentation and Targeted Strategies to Boost the ROI of Performance Management Programs, ITAGroup®, HRManagement, March 1, 2010 4 2005 Incentive Federation Survey of Buying Practices: www.incentivecentral.org/channel_partners/channel_partners_overview.1841.html#1 5 WorldatWork’s “Trends in Employee Recognition 2008” 6 “Print with Purpose.” http://www.appletoncoated.com/index.php?GroupID=124 7 2008 Hay Group Insight Employee Opinion Database 8 www.howdesign.com, “The Future of Design,” Jan. 24, 2008 9 “iProspect Offline Channel Influence on Search Behavior Study.” Print-in-the-Mix—A Clearinghouse of Research on Print Media Effectiveness. http://printinthemix.rit.edu., 2007 10 William C. Taylor, “Permission Marketing.” Fast Company, December 18, 2007. http://www.fastcompany.com/magazine/14/permission.html 11 DMA/Integrated Marketing Media Mix Study, July 2008 12 Survey conducted by the Advertising Specialty Institute, parent company of Successful Promotions 13 “Turning into Digital Goldfish” BBC News, February 22, 2002, http://news.bbc.co.uk2/hi/science/nature/1834682.stm 1 2

» Learn more at www.itagroup.com.

About ITAGroup Business is driven by loyalty. ITAGroup drives that loyalty with a comprehensive

range of loyalty solutions. We combine incentive programs, rewards and recognition, group travel and event management to engage employees, motivate channel partners and ignite customer devotion.

And we rely on traditional business values like hard work, integrity and great client service to make sure our clients are successful. Let ITAGroup drive the power of loyalty for your company.

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