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The Non-Cash Register: On-Demand Rewards and CRM
March 21, 2008
Breathe new life into tired sales incentives programs by integrating non-cash rewards applications with CRM
By Christopher Cabrera
As economic concerns continue to grow prevalent and cash compensation budgets are inexorably tightened, many sales reps are left wondering how well they're really appreciated, which is not a good thing when manager's need to spur their performance and lock in loyalty. It's time for sales management to start thinking outside the box in order to energize and incent their sales forces. And non-cash incentives can go a long way toward showing that value, provided you wield them intelligently and programmatically.
Savvy managers already augment normal cash commissions and bonuses with contests and Special Performance Incentive Funds (SPIFs)—rewarding activities such as up-selling and cross-selling, driving attendance to marketing events or making sales with little or no discounting. When this process is managed manually in error-prone spreadsheets, however, these typically non-cash rewards are not well integrated with a company's total incentive picture—with its primary emphasis on increasing sales performance over the long haul. They are rather treated as ad-hoc kickers and patches, making it difficult for individual reps to accurately visualize just where they stand.
Moreover, when limited to fixed-prize giveaways—such as gift cards or certificates—non-cash rewards programs are too often predictable and not all that motivating. In fact, earned "rewards" are often simply tossed away. According to Consumer Reports, a full 27% of gift card recipients leave their cards unredeemed or simply forget about them, to the detriment of your program and your budget. With so much potential to affect positive behaviors, there must be a better way for sales management to leverage non-cash incentives.
Avoid the CRM "Silo"
Here's the crux of the problem: If sorted from the CRM systems that you and the sales force use daily to manage sales activities, non-cash rewards programs are hard to creatively plan and design, hard for reps to visualize attainment as they go and hard for management to measure and improve. In order to get the full value out of non-cash rewards programs, organizations need to start automating the program lifecycle, end to end.
Seize the Automation Opportunity
Today the opportunity exists to finally automate non-cash rewards programs—from design to implementation to fulfillment to measurement. Further, the opportunity now exists to integrate automated non-cash rewards capabilities into your automated CRM and/or sales compensation management environment. In doing so, you gain the ability to deploy and manage truly effective and transparent non-cash rewards programs across all sales disciplines—including direct, inside, channel, call center and even non-sales disciplines such as tech support and marketing.
This opportunity is being made possible by a new generation of non-cash rewards applications that are on-demand, just like Salesforce CRM, and which deliver real-time Web-based visibility into goals and attainment. These solutions enable managers to leverage pre-built program scenarios proven to deliver results, or create their own scenarios. They enable instant redemption of rewards points via the Web, enabling individuals or teams to set their sights on attaining rewards that incent them the most, from literally millions of brand-name merchandise items to travel and leisure, event tickets and even adventure packages. And the programs you create can be used strategically as well as opportunistically, meaning you can tailor and track programs that drive long-term performance gains as well as those that shape short-term behaviors in support of various sales campaigns.
Non-Cash Rewards Meet CRM
Now here's the really interesting part for companies that want to make the most out of their CRM system investments. New Web 2.0 technologies enable easy linkages between these new on-demand applications and on-demand CRM solutions—such as Salesforce CRM. This means that from within your CRM solution, you can develop programs for specific audiences within the sales organization, or across the entire company if you'd like, and assign rewards points for these programs. Attainment is automatically and accurately calculated using business rules that you define, and reps can view their rewards statements anytime, anywhere and drill into details. And you and your management team are able to just as conveniently monitor pay-for-performance progress and trends and drill into the details.
The upshot is that you can leverage one unified solution covering CRM and non-cash awards. If you like, you can also integrate in all other aspects of sales compensation management as well. Sales teams are used to using CRM solutions and have become well versed in their ins and outs. Melding CRM and awards is a potent way to extend the value of your CRM investment, increasing sales motivation to increase sales performance.
Christopher Cabrera is president and CEO, Xactly Corporation
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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