Incentive - April 2008 - (Page 46) THE INCENTIVE MERCHANDISE BUYER’S HANDBOOK CHAPTER 1 PLANNING Short term vs. Long term emember, incentive programs are a means to achieve business goals. It doesn’t matter what shiny, cool gadget you plan to offer as the motivational carrot, you must determine, first and foremost, what you want to accomplish. Don’t go it alone. Brainstorm with others in your department and complementary departments. Get different perspectives on your target market and audience. Keep in mind the big picture, too. Objectives may be affected by the current economic climate; world events; the state of your WISE particular industry; your company’s standing, products, and services (strengths and weaknesses); and that of your competitors’. identifying your objectives R KEEP IT REAL THINK ATTAINABLE WHAT NEEDS IMPROVEMENT? Carefully consider your department’s or company’s overall needs and goals. You can’t do everything, so focus on one or two of the most pressing needs. Ask yourselves, do you want to: •Increase sales •Win new customers •Increase market share •Promote a specific product •Pump up productivity •Improve safety or quality •Maintain sales during a down period •Build dealer traffic •Boost morale •Smooth out factory operations •Build customer loyalty •Maintain B-to-B relationships Incentive programs are not a cure-all for fundamentally poor management. An organization must provide fair compensation on par with the industry average; proper resources, training, and support; open managerial communication, among other basics. Your brainstorming sessions should include discussion of any internal problems. A new software suite’s lackluster sales may be disappointing, but examine all the reasons behind it. Perhaps customers find the software buggy, unwieldy, and hard to use, spreading the word about its shortcomings on the Internet. How long should an incentive program last? That depends on what your goal is, the audience, and market conditions. Consumer promotions, for example, tend to be more short-term in their duration and seasonally structured. If you want to kick start sluggish sales, a quick, quarterly program aimed at your in-house sales team might do the trick. But if you are introducing a new product and want your dealers or distributors to get up to speed with it, a year-long program that includes education/training and product promotion as well as a sales contest might be in order. If this is your company’s or department’s first time launching an incentive program and there’s some trepidation involved, start off short-term. You can always reassess and restructure after the period is over if it didn’t work out as planned. On the other hand, you may want to continue or expand upon the program if it’s showing results. Your discussions should take into consideration those who will be participating in the merchandise incentive program. Any objectives should be attainable for them, and the awards should justify their efforts. If not, you will only succeed in frustrating and even angering the very audience you are trying to motivate. Workable goals in any area—sales, safety, customer loyalty, market share—are marked by the following five characteristics. 1. Simple and Specific. Keep objectives as simple and specific as possible, and communicate them clearly. Stay away from broad-based goals like “increase sales.” Narrow things down. For instance, decide on increasing sales of your company’s line of frozen pizza in the Midwest by 10 percent over last year’s sales during the third quarter of 2008. Beyond the overarching objective of increasing sales, the goal includes a specific product, geographic area, desired percentage increase, and the time frame. 2. Achievable. It’s admirable to be a little ambitious with the objectives, but not so when you are overreaching. Unrealistic goals are likely to lead to disappointment. With current market conditions in mind and/or company culture, ask yourselves these questions to strike a balance between doable and wishful thinking: • Can the goals be met? By whom? • How hard will participants have to work to attain the goals? SPECIAL SECTION 46 | April 2008
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