Promo - April 2008 - (Page S18) The Score on Setting and Reaching Goals According to the Incentive Federation’s 2005 marketplace survey, consumer promotions and employee and B-to-B incentive programs have much in common when it comes to setting and reaching goals: <The Bottom Line Incentives How to make sure your objectives and metrics are in sync HICH INCENTIVES DELIVER THE BEST FINANCIAL PERFORMANCE? Truth is, no one type is guaranteed to outperform another. Success depends on how well incentives fit with your specific goals and the audience (and how well the program is implemented). And that’s the only way it can be measured. “Incentive programs are much more scrutinized than marketing,” says Mike Ryan, vice president, marketing for MADISON Performance Group. And while they are more controllable in some ways, “companies are often more willing to invest in marketing first” because they tend to be more familiar or comfortable with metrics like improved brand awareness, he notes. “Questions like, ‘What makes you think we wouldn’t have seen a 5% sales lift without the program?’ or ‘How do we know that an X% lift is good? Why not a Y%?’ are common” when it comes to incentive programs, Ryan adds. But there’s good news: The nature of P&I programs gives them some bottom-line advantages right out of the gate. average sales volume increase goal set for consumer promotions was 18%, and 55% of these programs reached their goals. <The W average sales volume increase goals set for sales staff and dealer incentives were 18% and 16%, respectively, and goals were reached by 60% of sales staff and 59% of dealer programs. Recognize employees with your own custom online points program. Empower employees to choose the brand name rewards they want. “People sometimes forget that, unlike advertising or other marketing tactics, where there are fixed, upfront costs regardless of the results, with incentive programs, the majority of the costs are in the awards themselves, and in most cases, those aren’t paid out until—or unless—the desired results are achieved,” points out Michelle Smith, vice president, business development, O.C. Tanner and past president, IMA. Incentive promotions are highly measurable—given the right framework. And that doesn’t start with gift selection or program logistics. It starts with nailing down measurable goals and knowing where you stand. The Incentive Federation found in a survey that 74% of respondents (users of employee/B-to-B incentive programs and consumer promotions, spanning a wide variety of industries) use “total units or dollars sold” as the criterion for evaluating their programs. Share of market was cited by 41%, cost as a percentage of incremental sales by 32%, and percent reaching goal or quota by 7%. Just over half reported using classic ROI—profits on incremental sales—as the criterion. About two-thirds of executives responding to PROMO’s 2007 premiums and incentive survey reported using ROI as the metric for consumer promotions, and about a third said they use long-term or lifetime customer value. Turn up employee motivation with the ultimate rewards tool NO DEVELOPMENT COSTS NO MAINTENANCE FEES MAXIMIZE RESULTS PAY FOR PERFORMANCE 1.888.622.3343 www.iloverewards.com SPECIAL ADVERTISING SUPPLEMENT http://www.iloverewards.com http://www.iloverewards.com
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