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This is the kind of article that is written by those who think they understand incentive programs, but is what he says correct?  Unfortunately much of it is correct all too often, but it is not the norm, nor is it what happens when the incentive program is designed and implemented by professionals in the industry.  While the author offers a list of disadvantages of sales incentives, they are not disadvantages of using sales incentives them; they are disadvantages of how they are used.  Let us review the points mentioned in the post and how they differ from ours.

Rewards for Top Performers

“Most sales incentives tend to reward only the top performers …some of these representatives may already be selling at a high level. They do just enough to collect their bonuses or trips”

Most top salespeople will be the top salespeople regardless and will always work to be the top.  For them it is intrinsic.  If historically only the top salespeople earn, the objectives and rules structures were not set properly to include 80% of the universe, not just the top 20%.  A properly designed system will motivate the majority to better their own performance.  In essence, they should compete with themselves.

Narrowly Focused

“Many sales incentives are also narrowly focused on just sales. This causes sales representatives to focus only on revenue-generating activities.”

Absolutely!  That is as it should be.  If you want them to focus on something else then incent that objective as well, but good salespeople are success driven. And that’s where you want them to be.  The best programs will be those that are narrowly focused with qualifications to avoid other issues.

Costly

“Sales incentives also have high associated costs. Small companies which fail to tie incentives to the right performance variables may needlessly be paying tens of thousands of extra dollars per year for bonuses, trips and impromptu rewards.”

This should never really happen.  Before you implement any sales program, enough time and due diligence should be spent so your measurements and objectives are tested against historical averages, taking all current marketing conditions into consideration.  Any client who spent tens of thousands of dollars needlessly did a poor job of planning.

The best sales incentives should be equally tied to increases in new business and sales of specific products and services. Some products or services may be ignored for higher-priced products or higher volume sales. “

Not necessarily.  You can’t solve all problems with one program, but there are ways to tie them all together with one program using combinations of these other objectives as qualifiers or bonus earning opportunities when the main goal is achieved.

A professional incentive salesperson has the experience to turn these perceived disadvantages into advantages that will make your program the best it can be.   One of the best incentive consultants in the business is Paul Hebert of I2I Incentive Intelligence.  Drop him a line if you want that well developed and successful sales incentive program.



07 5th, 2011

Award giving can be a difficult business. Tastes change, trends fade and what someone may have wanted a couple of weeks ago isn’t what they want today. We all face the same situation when it comes to selecting awards for incentive programs, and for many of  us  the best conclusion in these fast moving times – let them get what they want! 

The gift card has been a godsend for anyone who can’t pick out the perfect thing that someone wants. And they’ve grown in popularity faster than anything else in the retail world. In 2004 we spent $20 billion in gift cards. Last year we spent over 4 times that. Gift cards have gone from being considered impersonal gifts to being the most thoughtful gift of all. The gift card is a sign of the times – tastes change quickly, options should remain open, and you never know what you’ll spot something you just can’t live without! 

Why the huge increase in demand for gift cards? Simple. Not only does it let someone buy what they really wanted (but were maybe too polite to say), it also lets them get it at the best price possible. They can wait until the sales, they can take advantage of special offers and maximize that gift. But there’s still a problem – what gift card to give?

 You can try and pick the specific store they want to go to, but more often than not they might want to go somewhere else or they don’t get the chance to visit for some time. And those gift cards sit on dressers, or in the back of wallets until they’re forgotten. There is the universal Visa or American Express card, but with those you have hidden fees, fine print and expiration dates. Not the mention the many problems some purchasers have had with these types of cards. 

That’s where we come in. The Award of Choice is the ultimate in flexibility when it comes to award programs. It can be redeemed when the time is right, for cards from hundreds of your favorite retailers, hotels, theatres and restaurants. And best of all the certificate will never, ever, expire, so they can take as long as they like to choose where to spend their gift. All this choice, and you can create it right from your computer, customized for your special someone. 

We think this is the ultimate award, we know it’s something we’d like to get for every occasion and we hope you feel the same way.



06 28th, 2011

Now here’s a question that the incentive industry has bounced around since the beginning and client after client has weighed with on their opinion.  It is still the most volatile question you can ask in the incentive world, or for that matter the entire compensation and benefit industry.  I’v heard just about every answer for it, some less original than others, some with a great deal of research and thought behind it, but most with the same approach.

In short, the incentive industry will tell you that cash does not make a good incentive award, period!  They will go on and on about the reasons why, but only supply some philosophical or psysological evidence for their stance, never any empirical data to support the conculsion.   Yet, cash incentives as understood by sales and marketing professionals can be very effective, all proper design issues taken into consideration.  Cash bonuses and profit sharing for all employees to be rewarded for their part in the profitiability of a company are certainly appropriate, especially in times of recessions. 

So in many ways cash can be a very effective incentive.

On the other hand, non cash forms of awards such as gift cards or travel definitely have their place in the Incentive award mix and they too can be very effective.  Hate to cop a plea, but the answer is ….it depends.  Depends on what, well initially what you are trying to accomplish which is the first step you’ll have to take to get to the answer of whether cash is the award that you need to use.

We have put together a long list of  things that you should consider and some arguments on both sides of the issue and will be happy to send it to you.  If you think that this would be helpful, just click here.



For a client to know what kind of system is best suited to their needs, they must spend some time prior to investigating potential suppliers, and attempt to understand the fundamental types of systems that exist, and some of the basic features.  Web-based incentive and reward systems range from simple online “redemption engines” used mainly to showcase and distribute awards to winning participants, to complete turnkey enterprise solutions that will manage workplace performance throughout the organization.  At first glance, and depending on the proficiency of the salesperson you’re asking, most systems will appear very similar.  But looks in this arena are very deceiving.  While similarities exist between all systems, there can also be vast differences.  Choosing which one is best suited to your needs will depend on several factors.  In the beginning of your search, ask yourself these questions about the system you think you need.  The answers to these alone could immediately eliminate several potential suppliers:

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Today it seems that it’s almost de rigueur for us “experienced” incentive sales types to say to a client that we are completely “Award Neutral” when it comes to recommending the right award solution for their incentive program.  But what does that really mean?  And are we being totally honest with the client?  

In the “old days” 

Back in the early 1970’s I was pounding the pavement of the San Francisco bay area looking for unsuspecting prospects to listen to my well rehearsed presentation on the merits of sales incentives.  When the motto of the company back then was “Motivating Men to Sell Your Product,” do you think it was a different time?  How do you think that motto would fit into our world today?? 

At that early time in my career, I was taught never to approach a client initially about awards.  It was drilled into me never to take our beautiful hard bound deluxe book of merchandise awards to the first meeting, and often not the second or even the third.  My job was to learn as much about the client as I could.  The theory was that if I learned about their company, organization, products, distribution, pricing etc. I would be in the best position to recommend a program that would produce results.  And, my teachers were right.  Approaching the business from this perspective allowed me to concentrate our resources on building the best solution for the client before we discussed what they should use to award the participants for results.  We didn’t have to worry about being “award neutral” because in fact we were.  Of course it helped that at that time all the industry had to sell were two rewards, merchandise, and group travel.  Read the rest of this entry »