When you think about what makes an incentive program “successful,” there’s probably one main metric you turn to: ROI. But what do you do if it’s not going well?
Let’s say you run a basic “frequent buyer” program for your channel partners that just isn’t getting your participants to spend more with you. These are about as basic as you can get with an incentive program, and they pretty common, especially in the B2C world. Think about airline rewards programs: for every x amount of money you spend with the airline you get y amount of points or miles back.
Are you getting your money’s worth out of the program? Has it succeeded in raising revenue for your business?
And if the answer to either of those is “no,” then what can you about it? Let’s consider a few options to increase your program’s ROI.
1. Targeted Growth-Based Goals
The thing is, while one-size-fits-all programs like this one might seem simple and convenient, sometimes they don’t always deliver the high results we want. This may be due to the fact that by definition there’s no personalization from user to user. If you give all your participants the same generic rules structure without accounting for individual behaviors like buying patterns, you might end up limiting your program’s chances for success.
Personalization is a more important component in incentive programs than ever before, according to the IRF’s 2022 incentive trends report. As consumers in the Internet age, we’ve gotten used to personalization in every digital storefront we engage with, so it’s not surprising that buyers are coming to expect this from their channel partners.
If you’re not getting the ROI you want from a one-size-fits-all type of program, consider working out some personalized, targeted growth-based goals that will vary for each participant based on their previous buying patterns with you.
Because these goals are personalized to fit each participant’s possibilities for growth, they’re more likely to achieve them. This strategy is related to the increasingly popular strategies of account-based marketing and account-based sales (ABM and ABS), which focuses on customers’ individual needs and goals, rather than assuming that one solution will work for everyone.
2. Focus on Engagement
“Engagement” can mean a lot of things, and that’s what’s great about it. Broadly speaking, engagement-based rewards target preferred customer behaviors that might not directly have to do with ROI, such as:
- Completing eLearning modules that help them understand your products better
- Making use of your eCommerce offerings
- Filling out surveys, answering polls, or other activities that help you collect data insights
- Attending live or virtual events and engaging with your company on LinkedIn or other social media
Make sure they know about the different services you offer, and particularly capabilities like eCommerce that have cost-cutting benefits on your end. The main goal here is to get your participants more involved with your business, not just as buyers of your products but as members of your business community.
And that’s a major of engagement-based rewards, which one-size-fits-all frequent buyer programs often lack: the sense of connection they can foster in participants. In highly competitive industry landscape, loyalty can be a key differentiator for contractors.
Even more importantly, they provide opportunities to gather valuable data insights about your participants. Like I said above, personalization is a highly important component of the modern incentive program—but your ability to personalize the program will be limited if you’re lacking information on your participants.
If your program is struggling to bring in ROI, consider what information would help you understand your participants better in order to encourage growth: what are their own business goals and priorities? What products or services would they benefit from, but don’t necessarily know to ask for?
3. Try Out Self-Selected Goals
Self-selected goals are a fantastic way to get participants set high growth goals for themselves. Research in psychology and behavioral economics has shown that giving your participants a sense of input on their own goals can be a powerful motivator, since that initial choice automatically gives them a sense of buy-in. According to Selling Power magazine, self-selected incentive goals can outperform assigned incentive goals by up to 25%.
We’ve talked on this blog before about the power of choice architecture, which has to do with how a customer’s choices are designed and displayed. In self-selected incentives, choice architecture strategically offers “low” “middle,” and “high” goals for participants that allows even those who shoot for the middle category to feel like they’re achieving something.
At HMI, we’ve certainly found success with the self-selected goal approach. Recently, we helped a client implement our self-selected goal initiative, GoalChoice, in their program. The success of the approach was undeniable: the client saw $26 million of incremental growth, with a projected 132% increase in total sales over the previous year. On average, participant spending increased 24%.
Sometimes, a basic, impersonal one-size-fits-all program is all you need to get the ROI you’re looking for. But if it’s just not working out, or if you want to shoot for a higher degree of growth, it might be time to change things up.
Strategies like the ones we mentioned here – assigning personalized, targeted goals, rewarding engagement and other preferred behaviors, and let participants set their own growth goals – are just some of the directions that you can take incentives beyond the basic “buy this, get that” strategy that the industry started off with a century ago.