Motivation within Sales Incentive Programs
A sales incentive program isn’t just a platform and a rewards catalogue that allows you to expect behavioural change from your customers. It requires demographic analysis and a clear understanding of your target audience, as the program needs to be an exchange of value between your brand and your customers, while motivating them to prioritise your brand over others.
The Incentive Marketing Association recently released a white paper collating the findings from a comprehensive survey to uncover the industry’s latest trends, preferences, and strategies. In this blog, we will break down our design strategy for motivating customers within sales incentive marketing programs and support it with the outcomes of the IMA’s recent study.
Why Do Sales Incentive Programs Work?
Sales incentive programs are a targeted and bespoke way to achieve a desired outcome for your business. Whatever pain point your business faces (price or margin protection, share of wallet, customer retention, sales growth), a sales incentive program can work alongside your brand and existing customer relationships, motivating a selected change within your target audience.
The incentives within the program can vary – some programs choose between physical rewards, exclusive travel incentive packages, or cash/gift card rebates. Each of these has individual strengths depending on which pain point you want to manage.
Specifically, sales incentive programs are focused on encouraging salespeople to sell more, driving business growth. Your focus will generally lean towards a share of wallet or sales growth pain points, but you can effectively manage each. It needs to prioritise your brand and give customers a reason to stock and move your product, requiring specific incentivisation.
At Incremental, we believe in a self-funded model, meaning that your incentive program can be exclusively funded from the sales it generates. This allows your brand to engage customers and provide additional value to their transactions without paying anything. So, the question becomes—if your brand isn’t already providing a sales incentive program, why not?
Rewards vs. Cash vs. Experiences
There is debate about which of the three types of reward options is the most effective. However, we firmly believe each has its place, and the selection in your reward mix comes down to what your program hopes to achieve.
Rewards excel at providing trophy value, which means that every time the recipient looks at the item, they will be reminded of their achievement in redeeming the item, and this creates a positive emotional connection between themselves and the brand.
Similarly, travel incentives provide a positive sentimental reaction, tracing the memories of the holiday they earned back to the brand that provided the opportunity to them. However, they also offer relationship building between your brand representatives (sales teams and BDMs), which is an integral factor to continued success within B2B sales.
Rebates and gift cards are somewhat less effective – studies have shown that cash refunds are often treated as part of the transaction after being normalised and have a lesser benefit in connecting the value with the brand. However, providing an option for redeeming a branded prepaid gift card can allow them to refer to your brand while using the funds on the card for a transaction.
The three options are often best when used in conjunction, providing a vast reward catalogue. These can also be used in a tiered sales incentive, which can drive a sense of competitive spirit within the program, driving further changes in behaviour while allowing each individual to achieve and receive something, prompting positive brand sentiment, regardless of the level achieved.
Demographic Factors Affecting Reward Mix
Another vital consideration when selecting the reward mix within your sales incentive program is the demographic that your program is targeting. We’re entering a period of the most diverse workforce in human history, with baby boomer decision-makers sharing a marketplace with Generation X, millennials and, very shortly, Gen Z.
Each generation has differing opinions on what rewards motivate change best. While the information below is somewhat general and shouldn’t be assumed to apply 100%, studies have found that it must be considered when planning the program’s reward catalogue.
Decision makers within the Baby Boomer generation are motivated mainly by traditional rewards, as they often have the life experience of having been to incentive travel destinations or have preconceived notions about the locations. High-end home appliances or luxury goods are likely to achieve the desired change in behaviour within this demographic.
Generation X, seeking to balance career and family, seeks more practical rewards, such as smart home devices and fitness equipment or travel incentives that allow family participation. This mentality must be reflected in any destination and itinerary selected.
Millennials and Gen Z are more likely to be motivated by experiences over physical items, such as events, dining experiences or specific tech gadgets to allow their life to be improved. It’s also important to consider the need for sustainability within these demographics – these are the age brackets most concerned with climate change as it is most likely to impact them directly, so offering sustainable travel incentives will likely be a powerful motivator.
Maximum Impact Factors
Respondents to the IMA’s recent study found these five factors to be the most impactful program-design-related elements when choosing a reward within a sales incentive program:
- Program enrolees will choose whether to engage deeply in a program based on the rewards offered.
- Employees and customers look at their opportunities to earn and determine quickly if the extra effort required is worth the potential reward.
- Programs featuring new and fresh reward options or seasonal promotions do better than those without merchandising.
- If the program is not mandatory, people will choose whether to join the program based primarily on the rewards offered.
- Offering reward options that are too easy to attain will prevent people from striving for the more complex selections.
The takeaways from this shouldn’t be a big surprise – the rewards impact the outcome; they must drive a sense of accomplishment, and regular, thoughtful refreshes of the reward yield engagement. By demonstrating consistent updates of the reward catalogue, your customers will recognise that you’re interested in providing the best experience within your program and ensure continued engagement. This can be ensured through regular, relevant communications within the program to inform of any updates while keeping the outcome front-of-mind for future sales.
At first glance, your participants will recognise whether they will input maximum effort. Your brand must present a carefully considered program that recognises and understands the demographic you’re speaking to and can communicate with your customers that you’re invested in providing them with the best experience.
