Or why NOW is precisely the right time to launch an inaugural incentive program
A few months ago, our team was in a discovery meeting with a manufacturing client. We discussed the usual benefits of an incentive program strategy – solving a business problem such as increasing revenue, recognizing and rewarding your top sellers, keeping up with competition in your market, etc. Our client was polite and responded favorably, but he said one thing that was very surprising, “I’m not sure right now is the time for this approach. You’re assuming that we want to grow our business, and frankly, that’s not our objective this year. We just want to hang on to our existing customers. Heck, getting workers to show up is probably our top priority. We get the benefits of incentive programs, but they won’t work for us right now if we’re solely focused on sales behaviors.”
Instinctively, our team knew that behavior-based incentives could help this client, but we’d initially missed the mark on discussing what behaviors should be addressed. That right-turn in the conversation shifted our thinking and guided us toward finding the new behaviors that would help them forge ahead in today’s rapidly changing economic environment. It’s impossible to miss hearing something about our new-world’s business challenges every day.
Top 6 business struggles in 2022:
- For many companies, labor is their top problem right now. The workers aren’t there and there’s a real struggle to keep those that remain.
- Supply chain issues continue to put pressure on many industries. (Taking circular supply chain to the next level, some companies have been forced to disassemble manufactured goods to reuse parts to create more urgently needed products.)
- Costs are on the rise with no end in sight, especially in employee wages and in logistics.
- High demand in areas such as food and home improvement supplies.
- Low demand in areas such as office equipment and supplies.
- Overall discontent in the channel.
We’re here to tell you DOING NOTHING IS NOT AN OPTION. There is a September 2021 article from McKinsey that states, “If the past 18 months have taught us anything, it’s that employees crave investment in the human aspects of work. Employees are tired, and many are grieving. They want a renewed and revised sense of purpose in their work. They want social and interpersonal connections with their colleagues and managers. They want to feel a sense of shared identity. Yes, they want pay, benefits, and perks, but more than that they want to feel valued by their organizations and managers.”
This mirrors some of the basics of motivation we’ve known from the early 2000’s, when Paul Lawrence and Nitin Nohria of Harvard University introduced The Four Drive Model. The Transformational Drives to bond and to create are equally as important as the Transactional Drives to acquire and to defend. Now more than ever, the way we discuss and design incentive programs must reflect this reality.
Creative Group recommends a 3-layered, pyramid approach.
- Build a foundation of understanding – Get back to the basics of employee retention by understanding what motivates your employees, especially as it may have changed post-pandemic.
- Stay balanced – You may not be able to reward sales they way you always have. You CAN start to look more holistically at what it takes to build loyalty and focus on long-term success. Balance is the key to stabilization.
- Keep your best performers engaged – You’ve been kicking your incentive trip down the road, losing the connection between the desired behavior and the reward. But your top performers need to be motivated and connected to purpose. At a minimum, use individual rewards until your group trip can be actualized.
Start at the bottom by laying a foundation of understanding. Take the time to invest in a little bit of research to truly understand what is motivating your employees and sales teams in 2022. Layer on top of that, a more balanced incentive structure that not only considers sales activity, but also covers critical behaviors such as training completion, steps to the sale, or maybe even presenteeism – just showing up to work. And finally, don’t fall behind in recognizing those top performers. You may have temporarily stalled merit increases or even postponed your typical incentive rewards. Now is the time to recognize those people that have stood strong. Reward them with individual travel, curated lifestyle merchandise bundles, or FOMO-inducing sports and entertainment experiences. Or use a points-based program that delivers customization of rewards and can adapt and grow over time.
Your incentive program was put in place years ago to solve the critical business problems of the day. Make sure it’s still working to solve today’s business challenges. Collaborate with your incentive partner to modernize and refresh your program, ensuring that you’re incenting the right behaviors and using the most impactful rewards. The pandemic has changed people’s priorities and research shows that rewards with a give-back component are in vogue. Introduce do-good brands and charitable donations as part of your reward offering. Incorporate the wellness category to include not just spa amenities and treatments, but emerging mental-health focused options like Master Classes, meditation packages, and life coaches. Helping people thrive is the path of the future. It’s time to dust off your mission and values statements and make sure you’re living them.