Build a Better Reward Program
All effective incentive programs begin with a good design, notes John Farrell, regional sales director for Carlson Marketing Group. First comes defining the program’s goals and objectives. Second is setting the rules, so they tie participant’s activities into these goals. For example, you can reward for total sales, for sales over quota or for sales-enhancing activities. These rules may include all products or just priority items.
Now, you have the basis for calculating your return if you make these goals. This process gives you the incremental value of the program and helps define the budget for noncash incentives. Farrell offers two good rules of thumb: spend one-half to 3 percent of "eligible sales" on noncash incentives, or spend 3 percent to 7 percent of the incremental value you are seeking.
With a budget, you can begin to think of prizes. You should look for individual motivation plus involvement of each participant’s family, since families motivate 24/7. Then seek trophy value, to remind winners of the efforts that earned them the prize. If you are motivating employees of an outside sales channel, a distributor for instance, you also want to provide a competitive difference that will distinguish your program from other manufacturers’.
Next comes the selection of the rewards or, as Farrell puts it, "the reward mix." Merchandise and gift cards and certificates are most suitable for frequent rewards, for example monthly or quarterly. They may be used in an open-ended incentive program that will reward any number of winners.
Specific merchandise is a tangible award but limits choices and comes with shipping and handling costs, notes Bruce Holding, senior solutions consultant at Marketing Innovators International. Gift cards offer convenience, portability and flexibility, but less trophy value.
Travel, partly because it costs more, is best for longer-term programs that stretch over a half or full year. Travel rewards are usually restricted to a specified number of top performers, so they are closed rewards, with costs you will know in advance. "Travel usually goes to the sales elite, the top 50 in the company or top 10 in each region," Farrell says. Holding adds that travel often comes with significant administrative and coordination costs.
The most successful incentive programs mix merchandise, gift cards and travel in a strategic blend, with travel for top performers and other rewards for the larger groups of reps and support staff who help push you toward the overall objective. Holding says, "The broader the award offering, the stronger the participation levels and greater the program results."
The general rule for selecting merchandise and gift-card incentives is "the more choice the better." Farrell argues that one size does not fit all winners, especially in a large and diverse sales force. "Managers should never assume that one award will appeal to everyone or that what appeals to managers will appeal to participants," Holding says.
It never hurts to ask reps what they would like in an incentive program. Travel winners are frequently surveyed after their trips, so companies can use their preferences for next year’s destination. Postvacation surveys are especially useful for getting responses from winners’ spouses, a critical factor in picking the best prizes. Most important, if you do ask, don’t ignore the results.
Expensive travel rewards have a few rules of their own. There are economies of scale in purchasing airfares and hotel stays, so having only a few winners means you can usually get a much better deal on a single destination. If your firm is large enough to have more than 200 travel winners, you can offer choice more affordably.
Always remember company culture, demographics and the family when looking at travel options. "Family awards are huge today, with getaways to Orlando and Hawaii and cruises," Farrell says. "If your sales force is thirtyish, they may want such activity-rich travel as sports or the rain forests of Costa Rica. If they are in their fifties, on the other hand, sightseeing in Nassau could work better."
The choice between foreign and domestic travel is made on budget grounds, with a careful eye on safety. Shifting exchange rates also influences the choice of resorts outside the United States. If you have a five-star company and sales force, they will expect five-star resorts and amenities. Better to give the best to the few best, rather than spread disappointing vacations more broadly.
Combining meetings with vacations continues to be popular in recognizing inside sales reps. A company’s history of annual meetings can help set future choices. You want to equal or surpass last year’s trip, so you continue to motivate your repeat winners.
The same principles apply to picking merchandise and gift cards. Young males often look for camping and sports equipment. Twenty- to thirty-somethings work hard for entertainment and electronics. Families often prefer restaurant gift cards and weekend travel opportunities.
A good long-term incentive program is continually reviewed for effectiveness. Carlson surveys program participants for its clients, and then crunches the numbers on program success and costs. Even for successful programs, Farrell says it’s a good idea to change the prizes about once every three years, to keep excitement levels high.
There are three common reasons for failure of incentive programs. First and worst is the setting of unrealistic or unattainable goals. Second is not communicating and promoting the program constantly. Third is picking the wrong mix of prizes. "Usually, it is trying the one-size fits-all approach," Farrell observes.
Holding warns not to offer gift cards that are not redeemable in your area. Make sure your supplier can fulfill awards in a timely manner and handle customer service issues, such as returns and lost items.
Close-to-Home Vacation Rewards
Managers looking to reward salespeople with a travel prize might consider offering some fun and relaxation nearby, right here in the good ole USA. Great spots to play, meet, relax, shop and eat are often just down the interstate or a short plane hop away.
A Chateau for You (www.chateauonthelakebranson.com)
For example, Chateau on the Lake, outside of Branson, MO, welcomes many groups for incentive rewards and recognition of salespeople, according to Chateau’s Vice President and General Manager Stephen Marshall. "About 65 percent of our business is group related," Marshall notes. "There are many attractions in the area that are tailor-made for group activities."
The Chateau has become a mid-continent mecca for tourists, travelers and companies seeking a rewarding spot for both energetic activities and simple relaxation. The Chateau has 300 upscale rooms, plus ample room for meetings. There are other fine places to stay in Branson, but the Chateau is the only four-diamond resort in the area. The eight-year-old hotel looks like a chateau in the Canadian Rockies – with steeples and a stone turret greeting guests – but inside it is thoroughly modern.
Branson itself offers professional live entertainment on its main strip – a little like Broadway in the country. "Branson’s theaters offer more seats than Broadway," Marshall emphasizes. "Some of the acts are famous, and some not so famous, but they are all suitable for the entire family." For example, singer Bobby Vinton and the band Three Dog Night appear regularly. There is a Japanese show for the adventurous and the Lawrence Welk Theater for more traditional tastes.
Why limit yourself? With frequent schedules, you can take in two shows a day in Branson and see them all.
Check out www.explorebranson.com to see the coming shows and attractions.
The Chateau sits on a hill and offers pleasant lodging overlooking Table Rock Lake. A full-service marina connects the Chateau with the lake, which offers fishing tournaments and recreational boating. "We are very close to world-class fly-fishing for trout," Marshall says. "It is just five minutes away." Also nearby, there are campfire lunches and dinners at Dogwood Canyon, and an old-fashioned roundup at a miniature dude ranch. There are also world-class theme parks in Silver Dollar City and Celebration City, in the neighboring countryside.
Just 10 minutes from the Chateau, Branson’s main boulevard offers fine shopping at a series of well-stocked and reasonably priced factory-outlet malls.
These attractions explain why seven million visitors pass through Branson each year. "Our group and incentive guests come for a variety of stays, some for just three or four days, some for longer," Marshall says. "Next week, we are having a group down from Land O’Lakes Inc., in Minnesota. It is a reward program. And we have done the same for car companies and financial institutions."
The hotel caters meetings and other events for groups, many of which are themed events customized for the individual company.
"We can tailor our services to whatever their hearts desire."
Branson and the Chateau are located in the Missouri area of the Ozark Mountains, which are more a series of rolling hills that peak at a couple thousand feet rather than tall mountains. "It is especially beautiful in the fall, from October to November when the leaves are changing," Marshall says. "And we are very popular around Christmas for all the shows downtown."
A Taste of Old Virginia (www.thehomestead.com)
Branson is not alone. Since before the American Revolution, The Homestead in Virginia’s Allegheny Mountains has offered travelers, vacationers and anyone in need of fine relaxation a unique resort. The world-famous Homestead combines luxurious accommodations with plenty of sports, outdoor activities and congenial facilities for getting any necessary work done.
The Homestead’s guest rooms come with minibars, daily maid service and in-room safes, while special suites have sun porches and working fireplaces. Most have a direct view of the stunning mountains that surround the resort.
There are three fine golf courses nearby, ranges for sports shooting, six tennis courts, eight bowling lanes, swimming pools and miles and miles of hiking and carriage trails. Fly-fishers can have a fine time at The Homestead, and you can even practice that most aristocratic of sports – falconry. During winter months, the mountain location affords 10 of the best ski runs in the mid-Atlantic region, and there is an Olympic-size ice-skating rink, as well.
After all the hard work, your winners and their families can sample a complete line of massage and sauna services or take in a movie in a regular theater built into the Homestead. Dining options are varied and splendid, including a formal dining and dance room, a tavern for golfers, a casino bar and a lodge restaurant right on the ski slopes.
For meetings that accompany recognition trips, The Homestead has 28 meeting rooms that can handle anywhere from an intimate team of 20 all the way up to 1,000 top salespeople.
The Homestead is conveniently located southwest of the Richmond, VA, to Boston, MA, business corridor. The drive south can be a delight in itself, especially in autumn, when the Shenandoah Valley shows its most glorious colors. If you are driving to The Homestead, you may want to check out the homes of Thomas Jefferson, James Madison and Woodrow Wilson, all within an hour or two driving time. More distant visitors can fly major airlines into Roanoke Airport, and then take a 75-minute shuttle trip to the resort.
Golf, Golf and More (www.greenbrier.com)
Then there’s The Greenbrier in West Virginia. Ranked number one in Andrew Harper’s Hideaway Report, The Greenbrier offers everything from fine guest rooms to individual estate houses that have just about every modern convenience, including high-speed access to the wireless Internet.
Greenbrier’s sporting options are full featured, with excellent tennis, golf and swimming facilities. In addition, 6,500 acres of West Virginia mountain country offer plentiful biking, fishing, rafting and horseback riding. There are mountain-biking trails for the adventurous, as well as carriage rides for more sedate visitors.
Like The Homestead, The Greenbrier can also accommodate meetings, with 85,000 square feet of space allocated to small and large groups. Both US Airways and Delta Airlines fly into the Greenbrier Valley Airport, 15 minutes from the resort.
The House the Mouse Built (www.disney.com)
Walt Disney theme parks do not have quite as much history as The Greenbrier or The Homestead, but half a century is a pretty long history for a house built by a mouse. Walt Disney World Resort in Florida is celebrating 50 years of leisure fun with some extraordinary events that are aimed at both pleasure and business excitement. The special attractions offer "exciting new networking opportunities for business groups and powerful incentive rewards for top performers," promises Disney Senior VP George Aguel.
Direct from Disney’s Paris park comes a show called Lights, Motors, Action, a display of the most exciting movie stunts performed by Hollywood masters. Cars, motorcycles and Jet Skis careen across the lot, showing visitors just how the top stunts are done. Up to 5,000 people can see it all in a brand-new amphitheater. Aguel thinks this stunt extravaganza could be perfect to accent a new-product launch or just rev up a sales force for next year’s challenges.
Disney’s Future World section will host one of the most popular attractions from Disney’s California park. Soarin’ is a new free-flying adventure ride across the Golden State and simulates hang-gliding, allowing sales winners to enjoy the sensation of a free-flight tour over California. Disney will make Soarin’ available specifically to business and incentive groups.
Some gentler fun will be offered in the park’s Magic Kingdom, where "Cinderellabration," a musical direct from Disney in Tokyo, will be performed on the Cinderella Castle stage. It is basically the happily-ever-after sequel to the classic Cinderella story, and private performances will be available for larger groups.
Animal Kingdom joins in the fun with a high-speed train ride through a miniature version of the Himalayas, complete with abominable snowmen and roller-coaster thrills.
The fiftieth-anniversary celebrations add to the magic of Disney’s Florida parks, but the resort firm is building on a solid base of exceptional facilities for almost any kind of reward or business gathering. More than 600,000 square feet of function space, comprehensive convention services, five championship golf courses and superb dining are always on the menu. "The key benefit is that it’s all here," says Aguel. "Renowned meeting capabilities and the allure of the world’s most popular resort destination ensure a consistent winner for groups."
One of Disney’s largest convention resorts, the Contemporary Resort, offers 1,008 luxury guest rooms and 90,000 square feet of meeting space, all connected by monorail to the rest of Disney World. Just across the Lagoon is the Grand Floridian Resort and Spa, a Victorian gem with 867 rooms, elegant amenities and a 40,000-square-foot convention center. The largest meeting resort, Disney’s Coronado Springs Resort, has a Southwestern look and nearly 2,000 guest rooms. The Coronado has recently added an 86,000-square-foot exhibit hall to its convention center and continues to offer the largest hotel ballroom in the southeastern United States.
If you are looking for a more seaside atmosphere, there is Disney’s BoardWalk Resort, which is intimately sized with 372 guest rooms and 20,000 square feet of meeting space. Other watery havens are the two Yacht and Beach Club Resorts, with a total of almost 1,200 rooms.
Within easy reach are almost too many options from which to choose in one trip. There are 99 holes on five championship golf courses, water sports, fishing, riding and tennis, plus continuing performances by the world-famous Cirque du Soleil troupe.
The Disney folk provide thorough planning and assistance for group visits for a variety of reward purposes – but there is another way to give your top salespeople these unique experiences. Let them choose their own resort and vacation time with Disney’s new Individual Incentive program.
Special travel certificates let winners experience vacations that are unavailable to the general public. Award winners receive a complete vacation, including accommodations, theme park tickets, selected meals and special premiums. Either winners or their company can add upgrades for additional benefits. Winners may book their own programs at their own convenience, and program administrators can relax.
Options for Your Strategic Blend of Prizes
Vacation rewards
– Marriott Hotels and Resorts offers Stay Awards good for one night, Weekend Awards, flexible Anytime Awards, European Awards and even Worldwide Awards. Visit http://marriott.com/incentives.
– Universal Studios lets winners enjoy four nights at a AAA-rated 4-diamond hotel, plus four of Orlando’s best theme parks, for as little as $444 per person. You can customize meetings and events at Universal Studios Florida and Islands of Adventure. Call 1-888-266-2121 or email meetingsandevents@universalorlando.com.
– Aladdin Resort & Casino is at the heart of Las Vegas, offering dining, shopping, entertainment and gaming. There are spacious convention and meeting rooms, a business center, a golf concierge and two outdoor pools. Call 702/785-5555.
– The Borgata is a hotel, casino and spa, with plenty of gaming, shopping, entertainment and restaurants in Atlantic City. Call 609/317-1000 or contact customercare@theborgata.com.
Merchandise incentives
– Sears has a wide selection of home appliances, automotive gear, clothing, computers and electronic items, jewelry and watches, plus sporting goods, tools and toys. Call 1-800-549-8151.
– Circuit City offers a wide variety of consumer electronics online or at its 600 stores. Gift cards never expire and come in amounts from $5 to $500. Order a bulk quantity by calling 1-800-747-1805.
– Radio Shack has digital cameras, computers, games…indeed pretty much everything electronic for home, school, office, work and fun. Call 817/415-4950 to get the best deals on incentives.
– Crutchfield specializes in high-end electronic systems for your home and car. Plus, you get fine support in making the latest gadgets work perfectly. Call 1-888-809-5145 or email corpsales@crutchfield.com.
– Darden Restaurants has more than 1,300 Red Lobster, Olive Garden, Bahama Breeze, Smokey Bones Barbeque and Grill and Seasons 52 restaurants in North America. Gift cards are available from $5 to $250. Call 1-800-642-7336.
– Panera Bread offers artisan breads in a variety of flavors, such as cheese, olive or herb. Solid salespeople can choose their favorite breads by going to www.panerabread.com. Call 314/256-5403 for reward program information.
– Pier 1 Imports has handcrafted cabinets and plenty of other unique furnishings at more than 1,100 stores. Gift cards come in any denomination. Go to www.pier1.com and click on Gift Card.
– Crate and Barrel offers the finest furnishings and fixtures for your home. Gift cards are tailored for business incentive programs and can be purchased by calling 1-800-717-1112.
– Famous pharmacy Walgreens has baby accessories, home and medical supplies, beauty and spa products, electronic supplies and a fine fitness and diet line. Visit www.walgreens.com.
– Lowe’s Home Improvement offers appliances, patioware, fencing, lumber and power tools. Gift cards are available from $5 to $5,000, and bulk orders earn discounts. Call 1-877-66LOWES.
– CompUSA has all kinds of PCs and accessories. If you are unsure of what to get, you can buy CompGift cards in almost any denomination at your local CompUSA outlet or by visiting www.compusa.com.
– TJX sells apparel and home fashions at TJMaxx, Marshalls, Winners, HomeGoods, TKMaxx, AJWright and HomeSense stores. Learn about incentive options by going to www.tjx.com, and then link to the individual brand Websites.
– Canon USA has cameras, camcorders and other cool stuff for the young, old and in-between. You get Canon’s famous quality and cutting-edge technology. Visit www.usa.canon.com.
– L.L. Bean has rugged wear for men, women and kids, as well as luggage and gear for travel and outdoor living. You can get gift certificates sent in the mail or online for redemption over the Web by calling 1-800-441-5713.
– Swiss Army products are innovative, precise and versatile, having equipped adventurers and explorers all over the world. Learn more about Swiss by calling 1-800-243-4032, extension 2346, or emailing corporatepremiums@swissarmy.com.
– Hickory Farms’ hefty gift basket has beef stick summer sausage, garlic beef, crackers, cheeses, mustards and more for under $40. Select from their most popular corporate gifts by calling 1-800-345-9290.
– Antwerp Diamond House offers rings, necklaces or anything else that sparkles, glitters and gladdens. Talk to Rob van Beurden in Belgium at 32-3-226-9393, or email diamondhouse@pandora.be.
– Planet Hollywood has stylish restaurants around the world and stylish gear for the young and restless. Learn more by calling 407/903-5500 or emailing group-events@planethollywood.com.
– Ruth’s Chris Steak House promises "the greatest steak you’ve ever had" for top salespeople on birthdays, father’s day, Christmas or anytime you want at more than 80 restaurants. Gift cards are available from $25 to $500 by calling 1-800-544-0808.
– Safeway offers delicatessen sandwiches, catering services, free food delivery, flowers and recipes. For Safeway gift cards, call 1-866-568-2747, or email gift.card@safeway.com.
– Nordstrom has 400 brands of beautiful clothes for men, women and children. Nordstrom gift cards do not expire and ship within seven days or can be emailed in four hours from credit approval. Find out more by calling 1-877-283-4045.
– Harry and David have gourmet gift baskets and holiday gift baskets that could be a treat for winners and their families. Find out about all the fruits, chocolates, health foods and flowers by calling 1-800-248-5567 or emailing bizgifts@harryanddavid.com.
– Target Corporation has home furnishings and apparel for men, women and kids, plus sports gear, toys and electronics. Gift cards are available up to $1,000. Call 1-800-5GIFTS5, or visit target.com/corporategiftcards.
– The Gap clothes men, women and pretty much everyone else with its GapBody, GapMaternity, GapKids and babyGap lines. Gap cards go for $10 to $200 and can be obtained by calling 1-888-427-1111 or emailing businessdirect@gapinc.com.
– Regis gift cards are good for salon services and hair care at 4,700 salons, offering 22 brands. The cards are valued at $1 to $999, and you can add a personal message. Call 952/947-7495, or visit www.regiscorpgiftcards.com.
Flexible incentives
– American Express provides Gift Cheques that can be spent virtually everywhere on anything. American Express Incentive Services offers expert consulting on reward programs. Call 1-877-353-4438 or visit http://aeis.com.
– Centive provides online tools for managing any incentive you choose, whether cash or noncash. Get away from those clumsy spreadsheets. Centive lets your winners know their goals and helps managers know what they are spending. Call 1-877-CENTIVE.
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