Incentive programs to drive business growth – even when you’re on a budget!

Incentive programs to drive business growth   even when youre on a budget!

Some companies deny their customers, channel partners and employees rewards programs because they need to 'cut down spending' on the company budget – but little do they know, the humble incentive program may actually be helping to push business growth!

A white paper produced by the Incentive Performance Center (IPC), Why Incentive Programs Endure Recessions, looked at why these programs tend to "thrive during times of economic stress".

It also explained how "savvy" companies employed incentive programs to help drive their business while still cutting budgets.

The white paper highlighted some fundamental reasons why incentive programs withstood economic downturns with the first being low fixed costs, variable costs driven by performance, and high potential return.

"Low fixed costs, variable costs driven by performance, high potential return"

The IPC noted in the report that setup and ongoing communication were the primary fixed costs of "any incentive program" regardless of whether it was an employee, consumer, channel partner or sales incentive program.

Creating a plan and budget for the campaign with consultation of key representatives of the audience may help the plan to "stand the test of reality".

Implementing a "tactical communications and engagement plan" and setting up a system to manage and measure the program and its results is included in the standard fixed costs – taking up approximately 20 to 30 per cent of the incentive program cost.

The other 70 to 80 per cent cost isn't incurred until a portion or all of the goals have been achieved and the rewards have been redeemed.

"Flexibility"

The IPC report noted that things often change, and though it's difficult to change a direct marketing program, advertising or a trade show, it's not a huge drama to adjust or adapt an incentive program.

If your company finds that a product hasn't been selling very well, the incentive program may be adjusted to apply bonus points to those who successfully make the sale.