Why Do Online Incentives Work?

By Malcolm Fleschner

As the technology improves, the kinks are worked out and adoption levels increase, every year it becomes increasingly difficult for even traditional-minded sales organizations to ignore the benefits online incentives solutions offer over old, paper-based methods. According to a recent study by the Incentive Marketing Association, only 43% of survey respondents had ever run Web-based programs.

In an effort to crystallize just how much can be gained by taking programs online, Incentive Magazine recently interviewed a number of experts in the field. The following is a list of the key benefits they identified.

1. Efficiency. Paper-based programs are simply more inefficient than online versions. With no warehousing products, fulfillment is a comparative breeze. For companies with multiple programs running simultaneously, a Web-based solution provides centralized oversight with improved measuring and monitoring.

2. Cost savings. A common belief is that new technological solutions entail excessive upfront costs. But companies making the switch to online incentives find the opposite – Web-based programs drive substantial cost savings. You don’t need to produce expensive four-color awards brochures, pay postage for catalog mailings and statements and can eliminate extra printing costs when you increase the number of items in a rewards catalog. Plus, with the flexibility and ease of email, communications costs drop from 15% to 20% of a program’s budget to closer to 5%.

3. Enhanced shopping experience. Redeeming incentives used to be a simple, dry business, but following the lead of online retailers such as Amazon and eBay, Web-based incentive solutions providers are turning incentive redemption into a fun shopping experience. Some offer a list of sought-after items or seasonal merchandise while most are constantly updating their catalogs. That’s something that simply can’t be done with a paper catalog that comes out once a year.

4. Greater empowerment. Many users argue that motivation is easier and more effective with an online incentive. One way is to offer greater empowerment to downstream managers to dole out reward points as they see fit. Because different regions or offices often have different needs, this kind of flexibility makes the whole organization more dynamic and responsive to local market conditions.

5. Improved communications. The Web is a communication tool at its core. Incentive information can be distributed along with training materials, motivational messages and product updates. Participants can even be rewarded with program points for passing training quizzes. In fact, with a well-run incentive, the program Website often becomes the central headquarters for the critical information participants need to perform their jobs.

6. Flexibility. Traditional programs, once launched, do not allow for much maneuverability. But with online programs managers can monitor developments by the hour if they so desire, making appropriate adjustments to suit rapidly changing needs.

7. Competition. Online programs typically post updated daily rankings for salespeople to peruse. This ability to monitor one’s own progress – along with other reps’ rankings – feeds into most sales professionals’ innate competitive spirit, encouraging everyone to work harder to keep up with or surpass their colleagues’ performances.