Program Design may seem like an irrelevant or unnecessary concept when executing a trip of a lifetime for award winners. Isn’t that alone enough to power your program?
I, for one, can imagine taking a trip to Disney with my kids and know that the effort to win that trip will be well worth it in the end!
A program’s reward – its carrot –plays a powerful role, but it only represents one element of a full incentive program. In focusing on the execution of a great trip alone, many companies either take a pure DIY approach to building incentive programs or hire an outside company to fulfill the rewards, travel, and technology. There is value in applying design expertise prior to selecting a scintillating reward or travel experience for top performers.
So, what do we mean by design? A simple analogy would be to think like an architect of the next great cathedral, sports stadium, or whatever inspires you. Before people are motivated to visit your building, you must understand and define its function, structure, and form. Your program needs to have a well-defined function – a purpose that rises above simple transactions. It needs structure – rules, communications, etc. that engages and inspires action. And finally, it must take form – often determined by your available budget.
Too often, corporate program owners begin their design process with the reward (form) and don’t spend enough time considering function and structure. When the full process (end-to-end design) is considered, the power of design lies in its ability to turn a top performer recognition activity into a business strategy that generates incremental growth and pays for itself. End-to-end (E2E) design can also elevate incentive and reward programs from a tactical activity to a key part of a company’s broader engagement strategy.
Here are three primary reasons why it makes sense to proactively include E2E design as part of an incentive or performance improvement program:
1. Design applies thought leadership to enhance program fairness and outcomes.
Too often, incentive program structures focus only on rewarding the top 10%. Research has shown that a 5% increase from the middle 60% of performers yielded 80% more revenue than a 5% increase from just the top 10% alone. This is a breakthrough observation, yet it is still not widely applied today. Performance improvement programs that do not include a growth strategy for the middle of a company’s performance curve are missing an opportunity to engage more people and improve performance across a much broader spectrum of their sellers or buyers.
2. Design uncovers key insights to amplify performance.
Your incentive program should not just reward outcomes (i.e. sales results). The program should also identify, reward, and reinforce the right behaviors that lead to positive outcomes. Functional and structural design considers all precursors to performance to ensure that extrinsic motivation is being built on a solid foundation. It then determines the up-front structure of the program to ensure you are not just blindly focused on the outcomes. It identifies the exact behaviors that will help to generate your desired outcomes in a way that aligns with your brand and the audience’s values.
3. Design applies data and insights to measure and improve financial returns.
Properly designed incentive activities will have a focus on not only rewarding top performers, but also on creating sustainable, measurable growth from selling channels. Research from the Incentive Research Foundation indicates that 82% of the top-performing companies use both qualitative insights and analytics on program performance to determine the ROI of the program. Too often, program data only looks at enrollment and winner statistics. With this information alone, incentive buyers don’t know what kind of a performance lift or financial return they’ve generated for their investment. In the absence of this information, it’s only a matter of time before this year’s budget dollars become next year’s budget cuts. Up-front design can include ROI modeling that suggests the performance you should expect and ongoing ROI calculations so that you can make mid-course corrections.
Engaging an independent design firm is a best practice among companies with the most-effective performance improvement programs. The research referenced above from the IRF has found that top-performing companies spend up to 43% more than average companies on design.
By applying E2E design expertise prior to sourcing a reward or travel supplier, companies can ensure that performance improvement initiatives are aligned with strategic priorities. Design is a way to take incentives beyond a sole focus on outcomes and enhance the focus on the behaviors that build lasting brand relationships. Design helps ensure the program delivers incremental growth and performance lift. Finally, design opens the door to obtaining key audience insights that can amplify performance beyond just the sales data and the incentive program. Ultimately, design is a path to identify factors that build emotional connections to a brand or product. And that’s how growth and brand loyalty can be sustained long after the short-term incentive has ended.
If you are just getting started with incentive program design, or want to get more information to support your programs, check out PX Exchange – an online toolkit for incentive designers with a ton of free resources and content.
With 25+ years’ experience in incentives, Chris Galloway designs corporate strategies to engage their revenue generators and improve relationships with the people that matter most to their business. Within PX Exchange, Galloway helps incentive program owners make incremental improvements to their programs and connects members to experts from all over the industry. Galloway is certified in incentive program design by SITE and the IMA and is an involved committee member with the Incentive Research Foundation.