DO YOUR CLIENTS REALLY UNDERSTAND?
AS a designer of incentive programs, one of the most difficult conversations I have is with clients who really do not understand what incentives are all about.
This doesn’t only apply to new incentive users but sometimes to seasoned users who really should know better, if only because of the results they are achieving. A lot of clients still make the mistake of regarding incentives as an expense and many find it difficult to believe that a well-designed incentive program will be cost-negative. Here the words ‘a well designed incentive program’ are important. It’s relatively easy to design a simple achieve-this-get-that type of program, or is it? Choose the wrong reward or perhaps forget to include all the elements of your distribution channel and even the simplest program can run into difficulties. But still people totally unqualified to design such programs feel they can do it and then I get called in to sort out the mess.
Red Adair, the American oil-well firefighter is credited with saying “If you think hiring a professional is expensive, try hiring an amateur” and how true that is.
A well designed incentive program with realistic and flexible targets for the participants will cover the costs of its design, launch, promotion, administration, communication, analysis and rewards as well as contributing additional profits to the sponsor’s bottom line.
The incentive industry isn’t one that normally worships buzzwords but ‘gamification’ is one that several of my clients ask about. The buzzword may be new but the principles are not. I’ve been designing incentive programs using gamification techniques for many years.
There are a number of situations where a reseller will sell products from a variety of different manufacturers and often the reseller’s prime consideration (the manufacturers too) is who is offering the best rewards, because that’s the one they will support. This could mean that even if one brand is requested by a customer the reseller will try to swing the sale over to the competitor’s brand simply because they could be in line for a better reward. But that’s how incentives work. They’re about changing attitudes and if that means purchasing habits all well and good.
In such circumstances incentives don’t always work in the best interests of the customer: the enduser. The manufacturer offering the dealer the chance to win the best reward may actually produce an inferior product and so the end-user may not be well-served. Some industries have now effectively banned the use of incentives; one of these is the financial services industry in Australia particularly for sales of investment and insurance products where a high degree of professional advice is often asked of the seller.
To some degree the fact that incentives have been banned in certain situations where they may affect the judgement of the seller is proof that they work.