Inspiring Sales with the Perfect Incentive Program
Seven years ago, I received a Citibank Skywards credit card, which offered 1 Emirates Skywards miles point for every dollar spent. It was my dream to accumulate these miles in return for “free” flights and upgrades. Recently realization dawned upon me that I was chasing a futile dream because Emirates revamped its Skywards program to my disadvantage.
Cash is King
Spending 1 USD on the Citibank Skywards card accrues 1 Emirates Skywards mile but not too long ago, Emirates reduced the redemption value of 1 Skywards mile to 0.05 AED or 0.013 USD. This consequently increased the number of miles needed to fly the same distance today versus a few years ago. In simple terms, my Skywards miles are reeling from inflationary side effects and my Silver status with Emirates is no greater than the lowest rung, Blue. It is no surprise that other frequent flyers echo a similar feeling of disillusionment.
I decided to drop the Skywards miles card in lieu of a Mashreq SmartSaver cashback card because the old adage “Cash is king” sounds better than any Emirates’ line of “Hello tomorrow with Skywards”. However it is not fair to single out Emirates as other airline carriers are introducing similar inflationary measures into their miles program considering the increasing costs of fuel and security.
Any loyalty program is quite hard to plan, develop and execute because it will simply never please everyone. Incentives follow a similar thread - especially the ones that vendors like us run for their channel partners. We, as our competitors, run several programs, on a global and local level, to reward the channel partners and their sales people for their numbers. In other words, capture the mindshare of the feet on the street. But each approach, with its merits and demerits, is not perfect and I am always looking for the perfect formula.
VitalizeR – The Alcatel-Lucent Enterprise rewards program
Our global program, VitalizeR, the most recent version has been running for several years under different guises. Vitalizer seeks to reward the best partners with certain monies (through a pre-loaded credit card) at the end of the quarter determined sales revenues. However, this global program struggles to please everyone and is often engulfed with administration, customs and delivery issues. Furthermore, the modalities of Middle East and Africa such as a 9-month postal strike in South Africa, strict credit card regulation in Algeria and PO Box deliveries in the GCC have further impeded Vitalizer’s success.
Previous versions of VitalizeR rewarded partners with points that were redeemed for gifts from a catalogue. However, I witnessed first-hand how these gifts were often distributed to recognize non-Alcatel-Lucent Enterprise sales and revenues.
VitalizeR localized for MEA
We implemented a local program that mimicked the VitalizeR approach of a competition open to numerous partners. Partners received a 1% incentive at the end of the quarter of their target if they reached the value. However, despite regular follow up and push, only 23% of our resellers achieved their target.
The failure of a singular over-arching program that rewards sales people at the end of quarter had me looking high and low for an alternate solution. In yet another trial, we customized our incentive approach for seven sales people of our top small and medium business (SMB) reseller. In this program, aptly titled “Every Deal Counts”, that ran from Jan to Mar 2015, we rewarded every deal almost instantaneously with amounts representing between 1.89% and 2.89% of the deal value using Yougotagift.com. The portal made rewarding easy and the variety of rewards made them easily accessible for the recipients. Right off the bat, the program offered encouraging results because we saw sales in segments until now untouched by the reseller, distracted the sales people from our competition and motivated the field sales as they experienced rapid recognition. However, a bespoke program mandates an inordinate amount of attention that I don’t think vendors can afford. While an agency can typically help but agency fees detract from my personal mission to deliver maximum money to the hard working channel sales people.
Is there a Solution?
Incentive programs and short-term enticements suffer from numerous conflicts such as ethical, legal, reporting accuracies etc and are but a valuable motivation tool for the quarterly number. Our sales people love them as it helps achieve the quarterly quota but incentives are not necessarily “true” marketing actions. Although, the topic of collaboration between Sales and Marketing risks opening a Pandora’s Box that I will leave for a different post. There is no definitive answer or solution here. What we can do is to continue to kaizen and inspire channel sales people to sell more of our product.
The original article appeared in the Dec 2015 print edition of Reseller ME and is available here