In an increasingly competitive market, retaining your business’s key members of staff and promoting higher levels of performance are business imperatives that drive your sales. Research suggests that it costs 13 times more to recruit new staff than retain existing employees. Also, competitive salaries are now not enough on their own to promote company loyalty. The incentive schemes that have developed over recent years offer you a powerful tool to motivate your staff and also key partners in your sector, which in turn can improve sales over the long term.
Dan Kelly, business development manager at Corporate Rewards, says, Incentives and motivation have been around in one format or another since people started to do business together. All business relationships are formed out of the need for a mutual reward and therefore there has always been an ‘incentive’ to work together. The main difference today is that the incentive and motivation process has become more professional and targeted in its approach and thus its value has become recognised from the boardroom down as an integral part of any businesses strategy.
Research into motivation has provided insight into how this process operates. Employees and business partners consistently cite a need to feel valued by their employers or business partners. In many cases, employees place the acknowledgment of their value before their pay or job security. Incentive and motivation schemes therefore have a clear position within an organisation.
From a marketing perspective, closer relationships with your key strategic partners is important to secure sales, but also to put your business on a sustainable footing. Adam Sidbury, board director of International Rewards at Grass Roots, comments, There is no doubt that channel partner incentive programmes are continuing to develop both in terms of their strategic importance to businesses and in terms of sophistication. Related to the first point we are seeing increasing evidence of global players wanting to implement their channel incentive programme across international boundaries. They typically do a test in a particular region and then once the programme is working effectively they look to replicate it in other markets. The IT and telecom sectors are very much leading the way.
Incentive schemes are moving away from simple voucher systems 30 per cent of which are never redeemed to lifestyle rewards such as experience days or luxury hotel breaks, reflecting how staff and sector partners want to spend the incentives they have won. It is important that you design and operate your incentive scheme professionally as it is very easy for a system to become complex and lose sight of its ROI. Never forget that incentive schemes are part of your business’s operational costs. They are there to perform a task, which you should be able to measure.
The format that your incentives take are increasingly moving into the electronic realm, as costs can be much lower than operating a system that requires physical collateral to be produced and distributed. There is a belief that web-based communication makes it simple, and less costly to create lasting relationships with management and staff within B2B partners, says Ellen Perton, creative development director at specialist agency Archer Young. The reality is that B2B partners are bombarded with e-shots and marketing collateral designed to drive them to web pages. An effective incentive strategy will ensure that your communication stands out. Your activity should initiate engagement, influence behaviour and encourage established long-term relationships.
The first step is to choose the type of rewards you will give. This decision should be based on sound research. It is pointless and costly to develop a reward scheme that no-one within your organisation or in your strategic partner network is motivated to use. Your incentive scheme should be aspirational and not simply a way of increasing monthly salaries, for instance. You can of course develop your own in-house system, but it’s more efficient to outsource your incentive scheme to the many professional organisations that now offer these services.
How will the incentive and motivational industry evolve? Venessa Wilson, business development director at Planet, says, Currently, systems are a mixture there are some that are fully online, but there still remain many that offer a hybrid of offline validation and online redemption. We believe that all these solutions (from a user interface and back-end administration perspective) will move to complete web-based systems over the next few years. However, offline marketing will remain a critical factor in the success of a program’s overall communications strategy.
In terms of the future, the way forward can be seen from how the most advanced vendors are already looking to ensure that their incentive and loyalty program platforms address a number of objectives under one common infrastructure. This sort of flexibility allows them for instance, to use incentives as a positive way to effectively address other less traditionally fun areas of the business, such as training and certification attendance and completion.
Finally, the next stage will see the barriers pushed even further with B2B marketers looking to cherry-pick the best of B2C schemes where alliance and associate partners can be offered through the same scheme to achieve rewards for the bundling of combined solutions to the end-users.
Whatever reward scheme you choose for your business should be designed and implemented carefully. Employee reward schemes can offer a boost to productivity, but you must maintain and monitor these systems constantly. Are they still giving a good return on their investment? Strategic partner schemes can also give your business a closer working relationship with partners, but again, analyse carefully how your scheme develops. Incentive schemes can place your business in the spotlight. You must ensure that your scheme operates at maximum efficiency at all times. If not, this will reflect badly on your businesses’ organisational skills, which could have a knock-on effect on marketing return levels.
John Sylvester, executive director at P&MM (Motivation) concludes by saying, The future looks bright. We will continue to adopt appropriate technology to maximise the delivery of this discipline. The major change will be the increasing awareness of how important this people-related marketing discipline is in achieving the bottom line goals in business.
Ultimately, when chosen carefully, incentive schemes can be a great marketing asset as they empower employees and sector partners alike to drive sales forward as well as improving your business’s bottom line.
This results in maximum efficiency, which benefits your business by not only increasing sales levels, but also enabling a closer relationship with partners. This leads to long-term sustainable sales the fundamental goal of all businesses in the B2B sector.
