When looking at incentives as a whole, an incentive is anything that encourages a person to do something. But if you narrow the concept of incentives to the economic sense, an incentive is a financial (or in some cases, non-monetary) motivation for an employee, customer, client or prospect to take a particular action. For employees, an incentive is a motivation to do better, work harder and be loyal to the company. For customers, prospects or clients, an incentive is to gain or build new partnerships/ relationships, as well as retain existing ones.
A business that is increasing its earnings, and reducing its costs, is on the right track to improving its bottom line. And a great way to do that is with incentives.
What is The Role of an Incentive in a Business Strategy?
The most essential purpose of an incentive in a business strategy is to implement transposition and create behavioral change. In layman’s terms this is an indication that in order for someone to get more, they essentially have to do more or so something specific. Therefore, you are only liable to provide the exchange once a specific target / action has been reached or accomplished, which has a direct, positive effect on brand awareness, sales and ROI.
How Incentives Help in the Workplace
Recruiting a set of talented people, to do specific tasks, is the first step in creating a team to charge company growth. However, amid workplace tension, the challenge of employee engagement and economic stresses; keeping such a team is often the issue. An attractive salary may be useful to entice jobseekers, but it is not guaranteed for employee retention and engagement. But incentivizing your workforce may be the solution. While this business strategy may not be new in the corporate world, it is becoming more and more necessary to have such a competitive edge.
Employees who feel appreciated in the workplace are more likely to be satisfied in their jobs. Moreover, at least 80% of employees have stated they work harder when aware their efforts will be recognized by a superior. This is according to a 2023 Zippia research summary on employee recognition. Employee incentive programs are strategized to designate and offer rewards for predetermined benchmarks. The goal of these programs is to motivate the employees they are offered to, to increase moral, cohesiveness and performance.
How Incentives Help Improve Customer Retention
The attractiveness of incentives for customers lies in the fact that most people (if not everyone) love a good deal. By encouraging customers to put in something of little effort or lesser value, to gain something of greater value, you can easily convince your customers to become loyal and act as brand ambassadors on your behalf. But in addition to customer retention, the actions conducted by your loyal customers, will in turn, lead to more customers supporting your brand. Thus, ultimately expanding your existing customer base.
A survey conducted by Vibe showed that 61% of respondents enable push notifications for news and subscribe to loyalty programs only. With that much emphasis placed on incentives, it is evident that loyalty programs are an effective means of communication between customers and businesses.
A Look at Goal Setting in Your Incentive Program
For incentives to be effective, they have to first be attractive. When you are using an incentive program to motivate and engage people, it will be of no use if the rewards are unappealing. And the best way to construct an appealing recompense is to individualize it and structure the reward according to each customer, employee, team or project. For example, if you are offering a family-centered incentive (such as a reward focused on the kids of the recipient) but you have members of a team or customers that are childless, the outcome of the incentive program will not be optimal because only a certain percentage of your workforce or customer base will benefit. Your incentives therefore, will (and need to) widely vary according to individual perspectives.
To start your goal setting, you can set SMART objectives that are:
S: specific in the targets they wish to achieve
M: measurable or quantifiable (or at least be an indicator of progress)
T: time-related in that the goals need to be accomplished within a specific time frame for a planned payout
The goals you set have to be strategically established and communicated clearly to your targeted employees and clients. The intended targets ought to be realistic, but also adaptable to “having the bar raised”. Moreover, there should be a clearly defined link between the actions taken by an individual and the reward. In other words, the compensation ought to be large enough to justify the effort put in.
Exploring Some Types of Incentives
Deciphering what your employee, customer, client or prospect would want is not an easy task, especially when it is essential that the recompense be “wanted” or “needed”. And in a difficult economy, cash may not always be available to incentivize your workforce. Luckily there are various other ways you can reward an employee or customer for the extra effort put in and these include:
- Gift cards / eGifts
- Discounts / Vouchers / Coupons
While providing recipients with coupons and vouchers is pretty straightforward, as this can be done on a website, via email or other online channels, you may be wondering how to choose a gift for a recipient? Especially when you are not aware of what they may want or need. So, here are a few tips to help you make the decision:
Give your Employees, Clients, Customers or Prospects a Choice:
For an incentive to be as effective as intended, it is always a good idea to give your employees the freedom to choose. Open-minded rewards are more desirable and can include choosing between the type of incentive or the reward itself. Giving your recipients a choice removes the guesswork and hassle of gifting. You will also save yourself the criticism and waste investment, should the incentive be undesirable.
Ensure the Reward is Individualized:
If you are selecting a gift for your recipient, always ensure you have an idea (or complete knowledge of) their preferences and profile. Many people find that receiving a gift that is truly specific to them is more personal and impactful than any other type of incentive. To do this, research your recipients – by searching their social media accounts, through questionnaires or by simply asking them – to determine some of their likes and dislikes. Then customize your gift according to the information you gather.
Personalize the Reward:
Customizing a gift, by adding your recipient’s name, a specific date or occasion, is a great way to make your workforce feel recognized. To some, recognition and thoughtfulness are more important than physical recompense. And with that said, a personalized corporate gift may be the ideal way to do both. You can send a well-chosen corporate gift, branded with a special message, name or date, to incentivize your workforce in a way that makes them feel genuinely appreciated and seen.
How To Measure The Effectiveness of An Incentive
To ascertain whether your incentive program has been effective it is important to set out KPIs (key performance indicators) that you can track. Doing so at the beginning of your incentive program will help you collect data to ensure you don’t miss certain key performance metrics post-event that may be difficult to measure.
Some KPI / metrics you can track with an incentive include:
- Pre, during, post-event feedback
- Email open rate
- Email click-through rates
- Employee engagement (turnover, absenteeism, retention rate)
- Incentive activity feedback
- Brand sentiment improvement
- Event app interactions
Incentive communications sometimes require time. They ought to be a complete, campaign-long activity. In other words, communications should run from before the launch of the incentive program, throughout and after the program as well. The individual pieces of data will construct a continual picture of the success of the campaign.
How to Overcome The Challenges of Gift-Based Incentive Programs
You may have all the information you need but let’s say you have a remote workforce, on an international level, or you’re trying to reach customers globally. This can bring a new level of challenges to your incentive program if you don’t have the necessary means to deliver incentives to your recipients in different countries. Some considerations include port and customs clearance delays, incorrect delivery information of the recipient, human error and a host of other issues.
Here a corporate gifting platform, such as Giftsenda, can be the perfect way to achieve your goals, all while remaining within your budget. A gifting platform has essential benefits that will help you select, deliver and track your incentive gifting campaign. We also offer various gift types, including: eGifts, SWAG, tech gifts, gift baskets and more.
Using the platform tools, you are able to give your recipients the choice between gifts from a pre-curated selection, have the gift delivered to their preferred address (or let them provide the address) and remove the cost of international shipping while you are at it. You are also able to use real-time tracking to track the data of your campaign, which will allow you to make improvements in future campaigns by identifying areas that require such. To increase the incentivizing experience, you can also customize a beautifully designed email with your company branding, that delivers a meaningful message along with the gift link.
To never miss a beat with your corporate incentives, start by creating a Giftsenda gifting campaign today. There’s no subscription needed and you can check off every aspect of a successful incentive to boost your bottom line.