BEST PRACTICES - MOTIVATIONAL PROGRAMMES, LOYALTY PROGRAMMES, AND INCENTIVE SCHEMES
Take full advantage of the relations with your partners
If your business largely depends on distributors, salespeople and agents who distribute your products on the market, you should consider the introduction of loyalty or motivational programs, tools that allow for the simultaneous involvement of many sales channels. Edenred’s extensive of experience and research have allowed for the identification of several key factors thanks to which the introduced programs are successful.
1. Top management
In order to be successful, a motivational program needs a decisive leader that knows how to assign tasks and modify the program in the event of unforeseen circumstances. Without the support of an experienced sales manager, the program may be unsuccessful.
2. The strategy and the definition of business goals comes first
First, one must define the program’s strategies, goals and plans, and then communicate them clearly. Every party that is interested in the program (the organiser, partners, and clients) must understand what we intend to accomplish through the program and what their role is in this processes. The program’s goals should be based on hard data, be measurable and be possible to achieve.
3. Select the program’s recipients
As is the case with all marketing activities, motivational programs are also most effective when they are directed at appropriate groups. Don’t invite all partners, instead, focus on those that are the most valuable to you organisation and have the greatest potential for growth. By knowing who you want to influence, you will be able to build the program’s structure in such a way as to be able to full respond to the needs of the participants and to generate the best possible results.
4. Understanding needs based on data
Your business partners include several potential groups of participants such as dealers, sales representatives, the clients of dealers, etc. Once you decide which of them is most important to you and most worthy of an investment, determine the data related to their activities and how you plan to obtain this data. Understanding this step is key in order to develop the terms and conditions for providing rewards and for making assessments.
The more data you gather during the sales process, the better you will be able to evaluate the value of the motivational program. Collect data from various sources, both data related to orders from within the company as well as from business partners. If possible, plan the program for it to allow for data on the purchases made by the end users be collected.
5. Create a valuable program that will win the recognition of your Partners
In order to attract the attention of the participants, the program must be valuable and cost effective. If you decide to implement a solution based on collecting points, the mechanism for calculating the points should be developed in a way that would make obtaining a reward both possible and realistic. Collecting points should make the program’s participants feel more and more excited rather than bored. They must know that their efforts will be rewarded. The program cannot be allowed to take on the form of an unending collection of points without clearly defined reward values (for more information in this regard see item 8). Remember that in the most effective programs, the rewards have a specific value and are possible to obtain.
6. Clearly define all of the program’s terms and conditions
Make sure that everyone the program’s participants knows the terms and conditions. Inform them what activities you will reward and how, what rewards can be obtained, and what one must to in order to obtain them.
7. Don’t overcomplicate the program’s terms and conditions
Try to keep the program’s terms and conditions as simple as possible. Excessively complicated rules will dishearten the participants or completely discourage them from participating. One of the ways to ensure that the program will be attractive and worth the effort is to promote only a few key products (or product lines) in a strictly specified period of time. You can promote other products, but at a later time.
8. Assign a realistic budget for rewards
As a rule, B2B motivational program channels generate significant participant involvement and activity (driving significant sales). Remember to assign sufficient funding for the program’s rewards.
9. Reward often
In programs based on collecting points, we observed that a regular announcement of rewards that were won increases involvement and the desire to collect points. Often, program participants obtain additional points and pay attention to what was collected so far. Therefore, it is justified to introduce another incentive, i.e. new rewards, which will increase the desire to collect more points, but also to buy the rewards. Based on our experience it appears that mainly for purely operational reasons it is more practical to introduce monthly rewards, to keep people from collecting a huge amount of points.
10. Communication is the key
Effective communication is of key importance in regard to launching and conducting the program. As was mentioned above, the parties interested in the program must clearly understand such issues as the strategy, goals, and tasks while the program’s participants must understand the value of the program, the reward hierarchy, and the terms and conditions. Communication should be provided from the very beginning as they build the brand, drive the campaign, and increase interest and recruitment among participants. Regular communication supports product sales and makes the participant more involved which in turn translates into collecting a higher number of points and obtaining rewards. We also use communication when we want to modify the program and adapt it to changing business goals. Use each and every available means of communication for the purpose of increasing the awareness and visibility of the program among your business partners. Take advantage of their involvement in the program and encourage them to engage in marketing communication and the increase of brand and product awareness. Include the catchiest messages related to the program in monthly reports, on the program’s website, in e-mails, newsletters, blogs, and social media - and if you are especially ambitious, create your own application for the program. Remember to assign a sufficient budget for communication.
11. Get your own sales team involved in the program
If you want to be successful, include your own sales team in the program, literally. Let them also become participants in the program. Introduce separate terms and conditions for them that will clearly specify how many points they will receive for their efforts spent on promoting your program (e.g. through talks with clients, the recruitment of new participants, etc.) Provide them with advertising materials which will make it easier to explain the program’s terms and conditions as well as the benefits of participating. Have communication play the role of “good news” which constitutes yet another reason for representatives to reach their potential.
12. Monitor, analyse, and adapt
Observe and monitor the behaviours of business partners (and end users) as this can lead to the early detection of the competition’s activities.
13. Manage the life cycles of the program
All loyalty programs go through previously planned cycles. In order to maximise results, you must plan for the expected growth, stagnation, and decreases. Special offers, promotions, and additional campaigns are all tactical elements that will help revive the program. However, no motivational program will last forever, so your plans should also include the time when your program is retired…
14. Crawl, walk, and run
Don’t let your program be too sophisticated, at least at the start. Even if you have an exceptional vision, you should consider launching your program in a simpler version. When launching the program, inform the participants of the reward terms and conditions and values. Communicate effectively. Assess all elements of the program, plan 6 to 12 months in advance, and then make the necessary changes or additions. Test gradually, adding more and more complex elements to the program and check whether they bring actual results.