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Recognition Redux |
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New technologies and motivational theories make today's programs very different from those run in the past. Here's the lowdown on the latest incentive trends.
Let's set the scene: We're at a Best Buy, or a Circuit City, or a local supermarket in a city that could be Bangor, Maine; San Diego, or anywhere in between. The time is a half an hour before opening, or perhaps it's just after the store has closed. Just beyond the cash registers, lined up like race horses, one in front of each aisle, are men and women wearing running shoes, poised to begin pushing their shopping carts down the aisles for a dash through the store in which they'll get to keep all the merchandise they load into their carts within a given timeframe.
This isn't a game show (though there are probably cameras and reporters from the local media to record the event). It's the award delivery of an incentive program. And it's a program that Cassandra Hayes, a promotional consultant based in Philadelphia, is getting requests for with increased frequency these days. "It's a really creative way to deliver an award to a recipient," she says. "It creates the excitement and exclusivity that's part of every successful incentive award."
Dramatic award deliveries such as the store run-throughs being organized by Hayes are not the only new trend of which executives tasked with motivating an audience (be it internal or external) should be aware. There are a number of other developments to keep your eye on, from the rise in demand for gift cards and luxury items to the way programs are being tracked and administered. Read on for some significant trends.
Getting on the Same Page
In the old days, oh, say, about 10 years ago, the very idea that someday non-sales incentives would almost be on par with sales incentives would have been like saying, in medieval times, that the world was round (minus the being burned at the stake for suggesting it part). But that day of parity is almost upon us. According to the "2005 Incentive Federation Survey of Motivation and Incentive Applications," 72% of the respondents use incentive and recognition programs to motivate non-sales employees. That's second only to sales programs, which came in at 83% and surpasses consumer incentives (68%) and dealer incentives (a distant 49%).
The "2001 Incentive Federation Study of the Incentive Merchandise and Travel Marketplace" and the "2003 Incentive Federation Survey of Motivation and Incentive Applications" do show that the use of non-sales incentives has been rising steadily, from 62% in 2001 to 67% in 2003 to the 72% level reflected in the 2005 report. And the increases are coming at the expense of consumer and dealer applications, which dropped by 9% and 8% respectively while sales usage remained constant at about 80%.
This isn't surprising to Fern Silver, president of the Chicago-based Fern Silver & Associates and a self-proclaimed anthropomaximologist (people motivation specialist). "So much research has been done to show evidence of the importance of employee motivation and recognition and how it affects the bottom line," she says. "It's been well documented that companies that perennially make the Fortune 100 "Best Companies to Work For," list and other lists of that nature are more likely to have made a commitment to employee recognition than companies that don't make such lists."
And some experts believe that the decrease in the number of consumer and dealer programs may be explained as an attempt to more closely integrate the motivational and marketing efforts in organizations. Speaking at a recent trade show, Frank Mulhern, associate dean of Integrated Marketing Communications at Northwestern University, in Evanston, IL, noted that the research that Northwestern has done in this area strongly emphasized the need for companies to better coordinate branding with internal communications and motivational practices. "Right now we have a huge disconnect between the promise-makers [advertising] and the promise-keepers [employees]," Mulhern told to the 110 attendees. He added that marketers are ahead of managers in their ability to influence people, and that human resources departments will play an increasingly strategic corporate role. Incentive programs, he explained, can help companies gather dispersed data. "What marketers can do with consumer metrics, HR will soon be able to do with employees."
A big part of that equation is the integration of the message being delivered to both sales and non-sales employees in their motivation programs. "All of the research that's been done at Northwestern University connecting performance with marketing and sales suggests that it's highly critical that the program goals and the communication of those goals become part of an integrated process, so that everyone in the company becomes a part of the success with relationship to the customer," says Silver. "The important thing is to get everyone to realize how important they all are to the process, from manufacturing to marketing to sales - even management. Everyone has to be on the same page as far as what the goals are and what behavior needs to be incentivized to achieve those goals."
And the arrival of the Internet as a viable tool suddenly makes it possible to do that in ways that have never been possible before. The online environment enables organizations to integrate their sales, non-sales and consumer incentive programs into one unified message. By giving every program participant a login identity you can have them log in to the same site and get a tailored communication highlighting the part of the company message or strategy that's specific to them. They can be given different goals that relate to the achievement of the overall goals of the company, see different point structures for awards or even a different award catalog entirely.
"It's a great way to get sales and non-sales, two types of programs that have traditionally been very far apart in terms of the award budgets, participating in the same program and being motivated to move toward the same goals," says Bruce Hollander, executive vice president of Don Jagoda Associates Inc., a Melville, NY, incentive company. "All companies, both large and small, are looking to integrate programs."
Online Options
The Internet has emerged as a business tool that's quickly becoming as indispensable and ubiquitous as the telephone. And the incentive industry is finding ways to take advantage of this valuable tool. According to the "2005 Incentive Federation Survey of Motivation and Incentive Applications," one in four respondents has run online incentive programs (up from 19% in 2003).
The tremendous advantage of an online incentive program is that it offers both program managers and participants opportunities to be more efficient and to get the maximum benefit out of a program. Incentive managers can turn on a dime in ways they wouldn't have dreamed possible just a few years ago.
Has a program hit a dry spot? It's a simple matter to go online and create a splash page offering participants a sprint program for a few days to boost sales a little. It costs next to nothing, because incentive managers don't have to print any additional promotional material or pay for an expensive mailing, as they did in the pre-online days. "The ability to change and add to a program on the run is a big development," says Hollander. "It used to be you printed the catalog and that was it. Now you can very easily alter the program to include sprint options."
It also makes it possible to extend the reach of the communication the organization has with the program participants, and offers very easy ways to multiply the opportunities to motivate them. Hollander's company has run incentive programs for clients where their employees earn points for sales and then go online to play a scratch-off game for additional points and prizes. "So in addition to earning their points and seeing what they have earned, they can also play online games, which is a good time to reinforce whatever message the host organization is trying to deliver," he says.
It also gives the host organization the chance to gather information about its employees or customers, right down to tracking what awards are being redeemed and which are not motivating the audience quite as well. "This enables program managers to adjust the offerings according to what people are most motivated by," says Hollander. "You can literally change things daily."
That speed is also a factor in getting the award to the participant quickly. Another program Hollander created for a financial institution involved employees earning points for moving specific services, such as opening an account or processing a loan. The employees tracked the program themselves. They went online after servicing a customer and input what they had done. Another tool that was a part of the site allowed managers to monitor the activities of the participants. If the services fell within the rules structure of the program, the managers would authorize a deposit of the appropriate number of points into the employees' incentive accounts and the database would be updated immediately.
It's not like it used to be when program participants had to submit a report, then wait a week for it to be processed and then get notification of the points. Then they would submit an award order and have to wait even longer for that to be processed and shipped. It would routinely take weeks for an award to arrive, and by that time, the reinforcement value for the behavior had pretty much dissipated. And reinforcement is the whole point of running an incentive program. "Speed of turnaround is crucial to the success of an incentive," says Hayes. "No one wants to wait for an award anymore."
With online reward and recognition systems, it's possible for a program participant to submit a points request, have a manager authorize it, redeem the points and get the award mailed on the same day the employee engaged in the behavior that earned them the award.
The Age of Choice
In the old days, choice meant achieving as even a mix as possible of jewelry, leather goods, sporting equipment, electronics and other merchandise categories in the pages of a catalog that was mailed to the program's target audience. The concept of choice has changed tremendously over the years, with gift cards, debit cards, gift certificates and the online options. Today, choice means catering to the individual desires of every employee.
Most companies have taken the printed award catalog and put it online so program participants can click on a category and see how much things cost, then go back to their account and see how many points they've accrued and how many they need in order to redeem the award they desire. "It really gives the participant an opportunity to play an active role in the motivation process, rather than passively waiting for the company to send them a communication about the program, as they did in the past," says Hollander.
Tracking award redemptions enables companies to develop a history of what motivates and what doesn't. This helps to target incentive offerings much more accurately. "Some companies even have theme programs so the items relate specifically to a ‘Summer Fun' or ‘Backyard Bonanza' theme. They'll go through the catalog and see which items tie into that, and create a separate Web page," says Hollander.
America's Most Wanted
But apart from using the technology to theme awards, have the items that motivate really changed all that much? According to the experts, the product categories that were hot 25 years ago are still in demand today, with the addition of gift certificates and gift cards, which have really come into their own in the past 10 years. According to the "2005 Incentive Federation Survey," they, along with electronics, rule the roost at the top of the most-coveted list.
"Universally, people pretty much want the same thing," says Hayes. "Something like fine wines or gourmet foods is so individual that it can be a risky award to rest a program on. On the other hand, a $35,000-a-year factory worker and pharmaceutical sales rep that makes a six-figure income are both going to be motivated by a high-definition television. It's a much less risky proposition."
As far as the award categories go, the trend is toward luxury items that recipients would not purchase on their own. The use of luxury items is on the rise and has raised the bar when it comes to motivating employees. It resonates with an employee by hitting a number of avarice-type buttons in the employee's mind. You are really competing with the desire to have the latest and greatest. It can't just be a TV; it's got to be a flat-screen TV with high-definition. It can't just be a cell phone; it's got to be a Razr. "The luxury brands appeal to the desire to possess status symbols and increase the status of the individual," says Hayes. "But it's got to be more than just keeping up with the Joneses; the items have to be useful too. If that utilitarian quality isn't there, it's not going to be an effective reward. But helping someone to live the good life is the key."
Reprinted with permission of Successful Promotions, copyright 2006
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