Cashing In with Noncash Rewards
If your company is like most businesses, there's an odd man out in your incentive compensation lineup: noncash rewards. That's unfortunate, as noncash rewards have superb motivating potential. I'm not referring to the one-off, end-of-quarter contests or occasional campaign kickers and special performance incentive funds (SPIFs), where sales reps and other staff are offered gift cards, movie tickets, dinners out, and other one-size-fits-all prizes. I'm talking about leveraging the motivating power of noncash incentive programs in a highly personalized and programmatic fashion, integrated with a company's overall strategic compensation plan, to drive and sustain desired behaviors.
When it comes to incenting behaviors, noncash rewards are typically underutilized, yet they can be extremely effective in driving behavior in ways that cash compensation can't. Cash is king, but cash is impersonal and predictable. Noncash rewards, on the other hand, are extremely engaging when the prize is something that the targeted recipient truly wants and considers worth striving for. A vacation at the beach. An adventure package. A big-screen television. A day at the spa. That new set of golf clubs. The key is to let each individual decide what rewards motivate them the most -- call it self-personalization -- and then show them a way to attain those rewards through their go-the-extra-mile actions. All-too-predictable fixed-prize contests don't come close in their ability to engage desire and motivation. And those gift cards? Twenty-seven percent of them are tossed away, estimates Consumer Reports.
So how do you leverage noncash rewards effectively in your organization? There are several steps. The first is to automate their management. One reason today's noncash incentives are treated as one-offs and limited to fixed-prize giveaways is because they are tracked manually, typically in spreadsheets. Hence, they have to be simplified. When you apply the same type of automation to tracking these contests as you do with tracking your sales leads and progress in your CRM application, you can start developing sophisticated, yet easily manageable, noncash incentive programs precisely tailored for each specific audience or individual within the sales organization or across the entire company.
The next step is drive performance by delivering the widest possible selection of tangible, value-oriented rewards. Give each person something personally meaningful to shoot for. Give people the ability to rack up points that are immediately redeemable for the prizes of their choice. This means leveraging the Internet for prize selection and immediate redemption of rewards points, as well as for the power of instant gratification.
The final step is integrating your noncash rewards program management with your CRM application. From a process standpoint, this provides the ability to tie actions to points automatically -- for example, when a lead becomes qualified, points are automatically assigned and immediately viewable within the CRM application. From a visibility and instant-gratification standpoint, recipients and management gain the ability to check earned and redeemed point balances at any time while logged into the CRM application, and points can be instantly redeemed online. And for ongoing motivation, people can see how they earned their points, and how they can earn more.
Automating your noncash incentive program, offering a highly individualized selection of prizes, enabling instant Web-based redemption, and integrating your CRM application are all pivotal to realizing the vast potential of noncash rewards and making them an extension of your CRM processes and variable cash-compensation programs. Implementation may seem difficult and even out of reach, but it is not.
Technology has advanced to make it all a reality. Enterprise mashups, Web 2.0, Web services, on-demand software functionality -- they all can be brought into play to enable noncash reward incentive programs to take their rightful place in your motivational mix, giving you maximum flexibility in choosing the right incentives to drive the right behaviors and enhance overall business performance.
About the author
Christopher W. Cabrera, founder, president, and CEO of Xactly, has over two decades of successful senior management experience. A noted industry expert in issues relating to sales performance management, sales compensation, enterprise, and on-demand delivery models, he is co-author of Xactly Sales Compensation for Dummies (Wiley).
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