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Recent figures show that companies spend
nearly $27 Billion a year on incentive programs to motivate employees,
channel partners and customers. And nearly two-thirds of all of
the purchases made are for Brand-name products. Whether it’s
a sales incentive plan, recognition of employee achievements, or
a program to reward loyal customers—-the right selection of
brand-name goods generates a special appeal. In other words, give
‘em what they want, and they’ll work harder for more.
Today’s marketplace and society is experiencing intense periods
of rapid change. Brands have assumed a new importance (apparently
in response to the events of 9/11) for people as a source of stability
in their lives.
“We’ve seen a sociologic shift,” states John Grace,
executive director of Interbrand (an NYC firm that consults with
corporations on branding issues). “As incentives, brands will
become more important in these times,” continued Grace, noting
that marketers must do their homework if they want to derive the
full value from offering branded merchandise. “If the program
isn’t based on true and meaningful corporate values, it won’t
resonate. Great brands have a level of trust, quality and consistency—-that’s
what made them great brands.”
A quick look at some recent figures about incentive programs reveals
that companies in increasing numbers are motivating their employees,
vendor partners and customers this way. A study by the Incentive
Federation showed the following:
- Spending on Premium Incentives in 2000
grew to $26.9 Billion
- This is a 2.3% INCREASE over 1999
- $8.7 Billion of that total was spent
on Sales Incentives
- $8.3 Billion of that total was spent on Dealer Incentives
- $6.3 Billion of that total was spent
on End Users (either Consumer or Business customers
- $3.6 Billion of that total was spent
on NonSales employee Incentives
Companies have also noted a continued push toward
premiums with high-perceived value as well as increased usage of
“lifestyle-type” premiums (like trips or sporting goods/equipment).
Watches, luggage, electronic devices and brand-name apparel rounded
out the popular premium choices. Spending small is sending the wrong
message.
High-end audio product producer Nakamichi America wanted to increase
retail sales of its new SoundSpace 3 stereo system during the Holiday
Season last year. They created an attractive incentive program for
salespeople at audio-video specialty outlets, department stores,
catalog operations and Internet sites. They assembled an eclectic
collection of products and ignored the traditional temptation of
rewarding with cash or their own products. They carefully looked
at their target market and selected such American stalwart products
as Meade Instruments binoculars and telescopes, Jeep bicycles, Movado
watches, Sentry sages, DSI remote-control cars, Konica cameras and
others things at various prize levels. The program was wildly successful
with sales easily exceeding program expectations. This shows that
the best way to have perceived value is to actually offer REAL value.
This sense is delivered by premier brand names that possess a distinct
value proposition in the marketplace.
Doing campaigns with tie-ins between brands (called: co-branding)
also plays an important part in the motivation equation. Here are
some premier examples: Starbucks is associated with Marriott, Nike
with Michael Jordan, McDonald’s with Disney and both Intel
and Rogers Communications use a distinctive audio note pattern/tune
to help consumers relate to their brands’ products and services.
But at the same time, marketers have to be very careful about who
they align themselves with. There are many potential choices and
options. What makes a better choice between various companies? Is
there a standard method of “measuring the fit?” One obvious
way is to seek out co-branding with corporate partners that possess
similar values to their own business beliefs/practices. This can
also quickly shake out the potential partners that are obviously
not appropriate. Blindly matching two corporate partners with dissimilar
core values (which are either real or publicly perceived) is bound
to reflect badly on one operation sooner or later. So, the path
is laced with pit-falls. Brander beware!
To help compensate—-most companies avoid both the excessive
costs of staffing a specialty markets department and the risk of
making costly/ill-advised errors by outsourcing these efforts to
service firms which can provide a wide assortment of services under
one roof—-including such key competencies as program design,
product selection, tracking, fulfillment operations and measurement
of results.
So—-what is a business to do? Like many things, take the time
to consider your actions and positions before steaming ahead into
uncharted waters. Here is a checklist of potential assessment points
to assist you in helping to make sure that a program using branded
merchandise will meet your business goals:
- Clarify Objectives
Objects must be specific (ie: do you want to increase sales revenue
or raise the number of new accounts?)
- Determine why you need to use branded products
Brands add value and power to recognition while distinguishing
it from simple cash incentives or compensation strategies/ packages.
The value of the chosen brand reflects the value of your own brand
and the services of the recipient.
- Assess your need for brand affiliation
If you want to strengthen your message of quality and integrity,
select products/brands that reinforce those messages. Or maybe
the message is still viable based on a lesser-recognized brand
with a high quality level to establish value and integrity.
- Create and implement a strategy
Work with an individual or team to develop and implement a means
of achieving and measuring goals. Set timelines for gauging and
assessment. Establish your benchmarks for qualifying people for
awards or recognition. Make them clear, concise and simple.
- Provide clear communications
Trumpet the program’s benefits. Reinforce the branding message
and constantly support participants with useful information and
feedback to help them actually achieve the desired goal(s).
- Have a Fulfillment Strategy
Great ideas can often be destroyed by shoddy implementation and
administration. Late deliveries, unavailable product selections,
archaic distribution systems and bad quality finished goods (in
either construction or decoration) sends a negative message that
alienates instead of invigorates. Don’t get caught without
skills/resources: seek an experienced provider.
- Measure Results
Remember why you did this in the first place. What was the goal?
Did you succeed in encouraging action? How hard was doing this
program compared to what your business derived from it? How satisfied
are the people participating and benefiting from it?
You are not always successful in the initial attempts. And tastes
change with the times. Each measured and assessed step assists
the success potential of the next instalment.
Your team is important. Your clients are invaluable.
And just like a skilled gardener you need to feed and nurture throughout
their life cycle.
We hope you have found this article thought provoking and informative.
Let us know any further thoughts
or ask questions.
*Sources: asicentral.com, Bob Woods, The Counselor
Magazine and Brymark Promotions Inc..
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