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Performance: It's in the Cards
March 28, 2008
Tips that keep your team focused in any kind of economy
By Mike McCue
Legendary speaker Zig Ziglar once quipped, "People say that motivation doesn't last. Well, neither does bathing. That's why we recommend doing it daily." After a lifetime spent giving motivational speeches and sales presentations around the globe, it's clear he hit the bullseye with that quote. In fact, it's the biggest reason why incentive plans exist: They're a tool that's strategic as well as tactical. Employees get paid salaries and commissions to do their jobs, but in many circumstances, that's not enough to encourage specific behaviors today.
As the leader of a top-notch sales team, you might not hear this question asked out loud, but you can bet your team is asking it in their heads: "What have you done for me lately?" If you're hitting your numbers but don't have an answer to that unasked question, you'd better get one fast.
Rain or shine, good economy or bad, top-notch salespeople are always in demand. If you're not motivating and rewarding them, the simple fact of the matter is, someone else will.
By the same token, if the team you're leading is underperforming in certain areas, it's even more critical that you develop a high-impact incentive plan. If you don't, the person looking for a new job might very well be you.
Fortunately, there are a number of companies with the size and experience to help here, including American Express Incentive Services (AEIS), a joint venture between American Express Travel Related Services Company and Maritz, Inc. AEIS provides business-to-business reward solutions including prepaid cards, American Express Gift Cheques and online reward management.
AEIS has a number of things going for it, not the least of which is the brand itself. According to a recent poll from InterBrand and BusinessWeek, it's the 15th most valuable brand in the world—that puts it in good company, with Hewlett-Packard above and BMW below. Another major advantage involves the company's DirectSpend product, a patented prepaid card acceptance process that allows clients to strategically direct cardholder spend to a specific merchant or group of merchants.
"AEIS offers a unique advantage in that we can use DirectSpend to tailor the reward to whatever specific merchant or type of product that the client wants," says James Menadier, general manager of the Strategic Partnerships Group. "That capability allows us to work with our customers to draw a direct line between the specific behavior they're trying to reinforce and the incentive they're providing to reach it."
Other insights Menadier shared with S&MM:
S&MM: What can you do to an already-established incentive plan if it isn't driving the behaviors you want to reinforce? Do you just tear the whole thing up and start over
JM: Most of the time, the plan simply needs to be more targeted and focused. Sometimes these things take on a life of their own, and even if they're still active several years later, the market has changed but no one has revisited their original purpose. Incentive plans are strategic in nature, but they're tactical when it comes to design and implementation. That means they need to be tweaked every so often. As far as analyzing results, companies usually know how much they're spending on their incentive programs, but often they aren't really sure what they're getting in return. To find out, they can go to an outside company to get help directly in a traditional consulting format, or they can use software to manage the program themselves. AEIS and other companies offer both options; our software allows users to set up a plan, establish budgets for individuals, teams and geographic units, and generate a variety of reports on the results. It's not enough to know how the plan works as a whole; sales leaders need to know how every individual is responding for it to be truly effective.
S&MM: What other advantages does a company get if it opts to manage its incentive plan via the Web?
JM: One of the great things about a properly designed incentive plan is that it can reward anyone, at any time. When it comes to longer-range goals such as annual rewards, certain people fall out of the running long before it's over. Once it's clear that they can't win that all-expenses-paid trip to the beach, what keeps them going? With a Web-based plan, not only can sales leaders see how each individual person is performing, the people can check their own accounts. Perhaps a junior salesperson can't generate enough revenue to win the annual trip, but if he just sells X more units, he can reach the next level and win a reward for that achievement. That keeps everyone's head in the game, because in a well-designed plan, some kind of reward is almost always within reach if the people produce just a little bit more.
S&MM: What are the most common issues that companies ask you to help them with?
JM: Salespeople today are busier than they've ever been before. Executives often say, 'I need my team to hone in on a particular product, at a certain market rate, for a specific period of time. How do I do that?' That's the most common question, but another big market change is that companies increasingly want to extend their incentive plans beyond the sales teams. We are now spending a lot of time working with companies on their wellness programs to help workers stay healthy. The same concepts apply: You want to promote a certain type of behavior and are willing to reward the employees to adopt it. Health and wellness are a big future growth area for companies like AEIS, and we're often coordinating incentive plans across entire companies, not just in the sales department.
S&MM: How does the economy affect the use of incentive plans? We appear to be headed for a bit of a recession; does that impact the way they are utilized?
JM: When you're on the border of a recessionary economy, that's when incentives are their most powerful. Many companies have to go through corporate downsizing during difficult times, and that has a terrible effect on employee morale and motivation. When significant downsizing occurs, these employees are probably not focused on specific initiatives; they're probably wondering if they're next to go. Using a targeted incentive plan gets everyone's mind off of those distractions and proves to them that if they continue to perform well, they'll be rewarded.
S&MM: What happens if the economy is good? Are incentive plans less effective?
JM: They aren't less effective in a growing market … it's just that they should be developed to do different things. When business is good and sales are pouring in, that's when you really want your teams to stretch for more. If they can hit their quotas without much difficulty, you need to find something else that will push them to the next level. So in that sense, the overall economy definitely affects the way incentive plans are utilized. But regardless of whether you want your team to reach for the stars or just hold their ground until the tough times are over, well-structured incentive plans are always going to be a valuable tool for today's sales manager.
Sales & Marketing Management Magazine
This article is brought to you by Sales & Marketing Management, the leading authority for executives in the sales and marketing field.
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