Return to Spender

By Malcolm Fleschner

Remember the good old days of the late ’90s, back when coffers were flush and sales managers could run incentive programs without meticulously recording what kind of returns the programs produced? Hey, when the business is just rolling in, any incentive’s going to do the trick, right? Well, it’s time to wake up and smell the economic downturn. Today’s budgets are tightening faster than a hungry boa constrictor on a rat, and sales managers have to prove they’re getting sufficient bang for the incentive buck.

So, how do you compile hard data on the notoriously difficult-to-document sales-incentive effort? John Farrell, senior director of client strategy for Carlson Marketing suggests three measurable areas of return: operational performance, promotional effectiveness and financial success.

1. Though it’s only a rough estimate, operational performance gives you a sense of how the program is going. Review your communication delivery, frequency of award fulfillment and the volume and nature of participant feedback. With communication, look for direct mail response rates or, if you’re running a web-based program, the number of hits the incentive page generates. In the fulfillment department, to gauge interest in the awards look to see which prizes are being chosen and which are not. Also, solicit participant feedback with surveys that ask for specific suggestions for improvement.

2. Promotional effectiveness can be established by looking at all of a program’s key stimulators. What is the percentage of enrollment? Which participants are enrolling and are most active on the program Website? Compare the performance levels of active and inactive participants.

3. Financial success is clearly the most important evaluation you can make for an incentive program. Look for specifically quantitative data such as sales growth, sales and revenue mix, customer retention rates, new customer acquisitions and gross profits.