Inspired Incentives

The Impact of Incentives on Multiple Customer Behaviors

Posted by Ben Griffith

Thu, May 24, 2012 @ 11:29 AM

One of my clients is a leading manufacturer of hearth products, and we’re running group travel and points-based strategies for them targeting principals and sales reps across their distributor and dealer channels.  Increased sales and mindshare are important lagging indicators with any program, and we’re seeing good traction in these areas as the programs mature, but it’s also interesting to observe how a well-structured incentive program can drive secondary and tertiary behaviors. In the construction of ROI analysis, these leading indicators are often ignored or downplayed, yet they can and do lead to stronger channel partnerships, a more educated indirect sales force, and other positive business generating behaviors. 

To use one example, this particular client had invested in excess of $1M on a customized training program that was seriously underutilized.  While the intentions were great, adoption after the first year was painfully slow.  Within the next year, though, our group travel strategy motivated most of these reps to enroll and complete the required courses, thus enabling the client to have a more educated sales force who can sell more profitable products with fewer fireplace incidences. Prior to the program, fewer than 30% of their distributor sales reps were even enrolled in the training program much less current on its modules.  By comparison, 88% of these reps are now current on 100% of their assigned modules, and this number continues to go up.  The points-based strategy, targeting “mid-level” sales reps, has seen similar results. 

After the first 4 months, enrollments are up 44% higher than the client’s expectations and more than 10,000 warranties have been registered which is significantly higher than anyone on the client’s executive team had expected.  Registered warranties are a very important sign of success for this client because of the legal liabilities surrounding their fireplace products. Not only is the client happy because training and registration behaviors are improving, but the channel sales force is happy as well because they are being rewarded for their efforts to learn more about the products they are selling.

Topics: Performance Improvement, Performance Incentives, Incentive Marketing Strategies, Channel Incentives, Group Incentive Travel, Points Based Incentive Programs