Step by Step: An Incentive Checklist

Partly because of corporate downsizing, incentive programs are increasing in popularity. Thanks to new techniques, they are also becoming more effective tools for marketing and employee motivation. This checklist will help you get a feel for the issues involved in program planning and implementation. It was prepared by Don Jagoda Associates Inc., a full-service promotion agency with offices in Melville, NY, West Palm Beach, FL, and Los Angeles.

DETERMINING OBJECTIVES

• Set specific, attainable, measurable, objectives that address marketing needs.
• Relate goals to specific performance.
• Clearly communicate the objectives and performance needs to the participants.
• Make expectations realistic.

BUDGET AND REWARD LEVELS

• Budget to include promotional costs beyond the cost of the awards.
  
  
• Set realistic quotas (or other method of scoring) as a basis for crediting participants vying for the awards.
  
  
• Avoid using incentive dollars to pay for sales or performance you would get anyway. Reward incremental performance.
  
  
• Determine the number of winners desired. A minimum of 50 percent of participants should qualify for awards. Too few winners will yield a poor result.
  
  
• Plan an average incentive award equal to a meaningful percentage of compensation (3-5 percent is a typical range).
  
  
• Make sure the awards are perceived as being worth the effort that you are requiring from the participants.

PLANNING AND MECHANICS

• Allow adequate planning time, and create a specific schedule.
  
  
• Assign responsibility for program administration to one person.
  
  
• Plan the program duration carefully to allow enough time to achieve objectives. However, remember that long promotions often fail to sustain interest and consistent performance. Long programs are more effective if segmented into short stints.
  
  
• Time the kickoff for greatest impact without encouraging salespeople to hold back orders from one period to the next.
  
  
• Find out what will make participants respond.
  
  
• Determine whether standard catalogues or plateau sheets are appropriate, or whether you need custom awards.
  
  
• Avoid running the same type of incentive program every year. Doing the same old thing generates diminishing returns.
  
  
• Write the rules carefully and clearly to avoid misunderstandings.
  
  
• If you have a small budget, consider putting increased emphasis on recognition programs rather than full-blown point-accumulation programs or sales contests.
  
  
• Make sure the program has senior management support, and communicate that when you announce the program and in support materials.
  
  
• Clearly state the tasks you and the participants must complete.
  
  
• If you run a contest, determine the type: (a) participant competes with him/herseself, (b) with others in a group, (c) against one other person, (d) one team competes against another.
  
  
• Consider sweepstakes or instant-winner games to provide periodic excitement and generate enthusiasm during slow periods.
  
  
• Evaluate the success of the program only against the original, stated objectives.
  
  
• Consult a professional incentive planning and implementation organization.

SETTING THE THEME

• Select a theme related to your goals.
• Choose an exciting theme that will appeal to and motivate your target group.
• Be sure that the theme conveys the idea of performance and reward.
• Develop a theme that can serve as a platform for information from the sponsor.
• Make the theme simple and consistent with the company's positioning and products.

SELECTING THE AWARDS

• From the outset, plan the prize selection to ensure maximum recognition value for winners and as much internal publicity as possible.
  
  
• Choose the type of award that will suit your program best, whether that be cash, merchandise, travel, or recognition.
  
  
• Small awards appear more impressive in merchandise form than cash, and, because the cost is relatively low, many more can be offered.
  
  
• Merchandise can be glamorized more readily than money to create greater interest and more active participation.
  
  
• Products for the family motivate the participant to work for spouse and children and thus become the household hero.
  
  
• If travel awards are included, be sure that all the details, including destination arrangements, are researched well in advance.

SUPPORTING THE PROGRAM

• Consider the training benefits of the campaign and take advantage of them.
• If appropriate, include spouses in promotional plans by using such tactics as mailings to the home.
• Create and sustain the excitement with award meetings or dinners, bulletins showing the standings, newsletters, publicity releases, and mailings of small, theme-related premiums.

TRACKING

• Set up record-keeping forms and procedures. In large programs with many participants, use a computer program.
  
  
• Check all legal and tax aspects.
  
  
• Make sure that data are available to evaluate the performance of each participant.
  
  
• Direct someone to prepare a written evaluation of the program immediately after it ends. That will ensure a smoother running, more effective promotion the next time!