1. Setting Vague Goals
Increase sales. Move more products. Reach more distributors. These are goals every supply chain based organization strives for. They’re vague and universal. If these are your incentive program goals, your program is bound to fail. You must kick off your program with a set of distinct, understandable goals, or else you’re just lumbering blindly in the dark. If you want to increase sales, decide exactly how much you want to increase sales. How much do you want to increase market share and how soon? In one year; in one quarter? Interrogate your goals until you have a clear and specific idea of what you want. Then you’ll have a solid set of objectives to build your incentive program around.
2. Failing to Set Clear Rules
Set up clear codes of conduct for your incentive program and enforce them. Don’t leave open opportunities for people to cheat or manipulate the system. Make sure everyone is held to the same standard. For those who play fair, the incentives game is no fun with cheaters in their midst.
3. Not Soliciting Input from Your Participants
If your program participants feel that incentive objectives come from “on high,” they will be less inclined to achieve your goals. Asking for their input and feedback creates emotional “buy in” for the program. Participants will be more invested in the program because they contributed. When your goals begin to have a positive effect on your organization, participants will feel like an intrinsic part of that success, which will increase their motivation and sense of company loyalty.
4. Only Rewarding Big Accomplishments
When targets feel too far away or program participants feel like they continuously rank lower than their peers in meeting goals, incentive programs can be discouraging. Make sure you’re offering your participants the chance to celebrate small accomplishments as well as landmark ones. This will keep participants engaged and interested in the program. Don’t limit goals to big quarterly or annual objectives. Offer chances to earn rewards for short promotions or for random, noteworthy behaviors.
5. Not Promoting the Incentive Program Enough
Not promoting your incentive program or effectively communicating its benefits can be detrimental to your program’s success. Visibility is crucial. How will your program participants become excited and engaged if they don’t know what the parameters of your program are, what kind of rewards they can earn or how to register? Take advantage of communication plans, such as those offered by Loyaltyworks, to reach program participants across multiple communication channels. Draw attention to participants who achieve significant goals so that earning rewards is public and a source of pride. When you communicate effectively, you can ramp up excitement about your program and ensure that participant engagement levels are high.
6. Not Taking Risk Aversion into Consideration
Your state of risk aversion should dictate the number of reward recipients and the amount of money you spend on each promotion. When salespeople or departments are more risk averse, increase the number of promotion winners and spread the incentive budget a little thinner. When risk tolerance is average, consider a winner-takes-all approach. When risk tolerance is high, reward fewer winners but increase the value of incentives given out. This ensures that you make the most out of your incentive program during financially secure times, but still maintain participation during low risk tolerance periods.
7. Leaving Out the Competitive Edge
Peer pressure and competitiveness are very powerful motivators, especially in sales environments. Make sure you use them to your advantage. If your company is part of a supply chain, run promotions that pit distributors or regions against each other. Use a Leaderboard to increase excitement and activate your participants’ desire to be the best of the best!
8. Offering All-or-Nothing Rewards
With a points-based reward program, it‘s easy to give people a reward proportionate to the amount of effort they’ve put forth, so do just that! Let’s say one of your employees or supply chain partners works very hard on a potential sale for weeks, carefully figuring out the right angle to approach the buyer with, only to receive the same reward as an employee who sold a few extra products by chance. That first participant will most assuredly feel that all their hard work was devalued. Avoid this by giving rewards that are equal to the time and effort put into above-and-beyond behaviors.
9. Leaving the Program Unmonitored
In order to be as effective as possible, incentive programs must be monitored and updated regularly. Tools like Loyaltyworks’ free reports will keep you apprised of your program’s engagement and activity levels. You may find that some promotions are much more lucrative than others, or that some communications are far more effective than others. As time goes by, monitoring and changing your program will be your way of “teaching” the program how to meet your particular goals.
10. Using Only Financial Measures
It’s very important to measure your incentive program’s financial success, but financial success is far from the only kind! Incorporate consumer satisfaction, reviews, supply chain partner feedback and product education measurements to get a well-rounded view of your incentive program’s impact. This way, your incentive program is sure to work the way you intend it to.
Being cautious of these mistakes will help you avoid some of the most common incentive program blunders. The cause of improperly implemented programs is usually impatience, a simplistic approach and misunderstanding how reward and recognition programs actually work. Although it will require hours of attention and strategizing, your program will only get better and more refined if you put into it the necessary time and focus.
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