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| How to Design an Effective Incentive Program |
| Step 1 - Determine your goals Clearly identify what you are trying to accomplish with the program. Make sure that the objectives are clear, to the point and realistic for the targeted member base. Increasing sales activity, retaining members, reducing accident occurrences and improving performance are good examples. |
| Step 2 - Build on your goals Define your goals and objectives in more detail by clarifying any goals that must be met before points are awarded, point value of targeted objectives (award codes), point expirations, point caps and forfeitures. |
| Spend time selecting a reward portfolio
appropriate for membership. Using rewards program! Keep the rules concise and clear and the goals attainable. |
| Step 3 - Decide how you'll measure
membership performance A dealer program may involve setting team and individual sales goals based upon prior activity. Take a look at prior data to get a benchmark for goal-setting. Make sure any individual and team goals are reflective of potential sales opportunity (volume/market) and within reach of all the enrollees. Assign only goals that can be successfully measured, and make sure that the program point award formula is easy to understand. If you can't explain it on single piece of paper, it's probably too complex. |
| Step 4 - Calculate your budget, ROI and
funding How many members (including anticipated members) will be enrolled in the program? Reward costs should be projected based upon membership, the expected success of the program (point issuance), program duration and point-to-dollar conversions. Make sure funding is adequate to ensure that the program can continue for the duration and that sufficient capital has been allocated for anticipated reward redemption. Reward costs probably should not exceed 90% of your budget. The remaining 10% will be necessary for administration and promotion. However, outsourcing will usually reduce administrative costs by freeing up personnel not experienced in managing incentive programs. |
| When calculating ROI, you should use an
aggregate of prior historical performance as a starting point benchmark. What kind of measured increase in performance can be expected from this program addition? How has this type of program helped other, similar companies? Don't forget to include often-overlooked benefits such as reduced rollover, retained customers, and improved morale and satisfaction. The cost for an employee- based program will be easier to calculate, but the ROI may be more difficult to determine than for sales rep or consumer programs. |
| Step 5 - Monitor awareness and progress;
measure results How is the interest in the program? Are members aware of the promotion? Are they enrolling and participating? What is the feedback? Is the program making progress toward the goals? Remember, it takes time to effect behavior changes and measure results, so be patient and let the program run its course. |
| Please contact memberawards.com (RTS) at 877-994-0839 for more information |
