360's Sales Incentives Technology Blog

Rock The Sales Channel: High Touch & High Fives Rule The Retail Floor

Posted by Jason King on Jan 28, 2015 11:32:03 AM

Doing what it takes to become the go-to brand of all the top sales associates in your sales channel is simple, but as the saying goes, “simple ain’t always easy.”

SnowboardingAs the owner/operator of a small chain of retail locations for 13 years in the specialty sporting goods industry of board sports, I was able to observe successful and unsuccessful launches across many product categories and with wide-ranging MSRPs. 

To be sure, the array of brands launching the products was as varied as they come: from established companies betting the farm on proprietary new technologies to new, unheard of brands with enormously deep pockets working to penetrate established spaces. All of this was happening during a time where trade restrictions with China had recently been lifted, and many categories were opened up to Wild West-style land grabs as it became easier to compete on price.  Brands struggled to balance the practices upon which they had built themselves with new practices that could widen their margins considerably, but with the challenges of this new, unknown supply chain. 

Tony_Hawk_Hucks_Another_OneThe struggle to launch many of these new offerings was a common one – without radical product differentiation, how could a brand make a big enough dent in the marketplace to gain a foothold and start to grow?  Sponsoring high profile professionals (think Tony Hawk) was a common move, often offering the athletes equity in the companies and positioning it as the athlete’s own company.

One thing the most successful launches all had in common however, was the ability to successfully market in the sales channel and the main way they achieved this was superior field sales rep forces.

How important was this role to successful launches?   Consider this: what makes a retail sales associate (RSA) show and ultimately sell the products that they show and sell?   Each time the RSA encounters a customer, they are making a lightning-quick decision of what they believe to be best for the customer’s particular need. Ultimately, this decision is driven by six factors, several of which can be driven by the excellent work of a field sales rep (FSR).

How To Motivate Salespeople Brand Awareness

It’s much easier to sell products that customers have heard of.  In the industry I’m referring to, all of the best FSRs were working at the grassroots offering product demos out on ski hills and at skateboard parks, creating impactful launch events at retail locations and generally making the public aware of the products in a very real, high-touch way.  (Did you just groan out loud at the utter unscalability?) These tactics were highly effective and worked hand-in-hand with the next important factor:

Education

Education is key because RSAs tend to sell the things they know.  This has become an even greater challenge with the ubiquity of Internet usage – any retail associate in 2015 will tell you what it’s like to work a deal with a customer who knows a product better than the RSA herself does. Hands-on product knowledge sessions with the right FSR go a long way to educate the sales associates which makes them very comfortable selling the goods.  As we all know, the comfortable sale is a much easier sale.

Incentive

Snowboards, watches, shoes, clothes and outerwear - swag was powerful fuel for the sales engine and top-selling RSAs knew that if they hustled to sell a brand and stay connected with the rep, there was little chance that they’d be paying out of pocket for any of these goods.   Outside of that industry, in the world of tires for example, the sales SPIFF or dealer incentives such as sell-through allowance and MDF/Co-op would be the equivalent move. We all know that sales incentives are not meant to entice an RSA to sell someone the wrong product, but they work like a charm if the product is a good fit for the customer.

rsz_osiris_d3_-_huge_success_free_of_function_and_comfortRelationships

This was a key factor in the success of some otherwise inexplicable success stories (see photo). During the course of researching user needs for our software platform and writing our e-book The Six Reasons That Front Line Salespeople Sell, we captured this quote from an appliance RSA which sums this point up perfectly:

“I actually got into a bit of trouble from my supervisor a couple months ago because I was just selling so much of Product X’s line, but our rep is just so great!  He comes by all the time, makes sure we have all the info we need, chats us all up and seems really interested in our feedback. And wow, when we have any sort of warranty trouble the guy is just all over it; helping us process the claim as fast as possible so we’re keeping our customers happy.  So, I guess they kind of just became my go-to line when I’m selling.” ~ Trevor

Mobile_Sales_LeaderboardNaturally, there are many technologies available now to help a brand better scale this connectivity – training, sales leaderboards and other engagements can now be executed extremely well via Internet.  Think how many elements of your strategy can be deployed straight to the mobile phones of the RSAs - perhaps the most highly trafficked touchpoint in their lives.   As a trade or sales channel manager though, it is useful to look at whether or not your FSAs understand the power of these tactics and are willing to do the legwork to action them in a meaningful way.   

As I said at the beginning – the steps are simple enough but for the travelling rep, simple ain’t always easy.

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jk_snowboardJason is the Content and Community guy at 360Incentives.com Connect with Jason on Twitter @JayKing71LinkedIn or Google+  360 is changing the world of incentives.  To find out how, book a call with us now! 

Topics: Retail

8 Great Things To Do In Chicago

Posted by Jason King on Jan 25, 2015 2:03:00 PM

buildings_along_chicago_river_line_the_south_border_of_the_near_north_side_and_streeterville_and_the_north_border_of_chicago_loop_lakeshore_east_and_illinois_center

If you travel a lot for business, there’s a good chance that you’ve found yourself in a strange city looking for a great meal, a cool place to eat or just a great spot to go for a run or cycle.   You’re not alone – chances are that at any given moment, a member of the 360 team is on a plane in mid-flight.   Our CEO alone will rack up 232,164 miles of air travel for 2014!

There is also a good chance that somewhere along the way, you’ve learned that not all Internet review ratings are created equal and your experience in no way ends up resembling the experiences shared by reviewers of an establishment.

Fear not.   We’ve collected the tribal knowledge of our team, some locals we know and some out-and-out know-it-alls to bring you a collection of carefully curated experiences for next time your travels take you to The Windy City.

Things To Do In Chicago:

Eat

While a great deal of fuss is made about the dining scenes in San Francisco and New York City, Chicago has long been a go-to destination for foodies. The scene is thriving with restaurants created by some of America’s top chefs along with the many offshoots started by their various protégés.

alinea-restaurant-dinner1. Most Noteworthy -  If you don’t know, now you know.  Much has been written about Grant Achatz’s Alinea and it is unlikely that more need to be added here.  If you missed the recent wave of restaurants preparing magnificent works of art, experiments in molecular gastronomy and just flat-out mind blowing cuisine, this is ground zero for the USA.  

Go for the food, enjoy the creative inspiration.

2. ¡Fiesta Mexicana! – If you can relate to chef Rick Bayless’ fixation with authentic Mexican cuisine, be sure to make arrangements to dine at his award-winning, Frontera Grill. From a James Beard award to Zagat awards, the people have spoken: Viva Frontera!

3. Avec – Since it was named one of the most important restaurants in America in 2013, it has become even more difficult to get a table at Avec (they don’t take reservations!)  But, if you get your timing just right, you are in for a special experience.  As noted on the Avec website “ The dishes at avec are a lovely representation of the everyday foods of the Mediterranean. Their presentation recalls the communal, unhurried approach to dining enjoyed on those warm shores.”

4. Fat Rice – “Macanese food?  What even is that?” I had to confess I had no idea what my brother in law was talking about as he excitedly recounted his meal at Fat Rice during a recent trip to Chicago.  This description makes me think what it amounts to is an adventure in ingredients and flavours: Owners Abraham Conlon and Adrienne Lo describe it as “Euro-Asian comfort food.” On the plate, that translates to dishes like ginger-lime cauliflower pickles, fried smelts with tongue-searing Sichuan peppercorns, and rustic clay pots overflowing with everything from caramel catfish to piri piri chicken.

Cloudgate_ChicagoGet Out, Get Moving

5. Get A Selfie With "The Bean" – The Bean is not the actual name, but rather an affectionate nickname to describe the shape of the remarkable public art installation correctly named Cloudgate. Check it out at the AT&T plaza.

6. Grant Park – If you’re looking to combine a run or a walk with some efficient sightseeing, head to Grant Park.  Spanning 319 acres of lakefront property, Chicago's "front yard" is filled with notable landmarks like the Millennium Park, Buckingham Fountain, the Art Institute and Museum Campus. In the summer, Grant Park's sprawling terrain plays host to festivals like Lollapalooza, Blues Fest and the Taste of Chicago.”

7. Chicago Riverwalk – Likewise, if you have been hankering to just get outside and get some air while taking in more of The Windy City, check out the Chicago Riverwalk.  “…breathtaking views of some of Chicago's most gorgeous architecture, take a stroll along the Riverwalk. A series of public walkways and seating areas offers access to boat tours and water taxis as well as waterfront cafes and restaurants.” 

chicago-navy-pier8. Navy Pier – Still a work in progress, Navy Pier is a project for redevelopment of one of the most important civic landmarks in the United States and the top-visited leisure destination in the Midwest.  Built in 1909, the site has been functioning as a social hub for Chicagoans for nearly its entire existence, only falling out of use for a few years following a fire in 1967.

Today, the site includes a variety of art and culture attractions along with an IMAX Theatre, the Crystal Gardens botanical garden and, depending on the season, The Landshark Beer Garden.

Got a personal recommendation for visitors to Chicago?  Please make the world a better place by sharing in the comment section.  Happy travels!

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KingJasonJason is the Content and Community guy at 360Incentives.com Connect with Jason on Twitter @JayKing71LinkedIn or Google+  360 is changing the world of incentives.  To find out how, book a call with us now! 

If you found this handy, check out our travel guides to Las VegasSan Francisco and Detroit!

Topics: Travel Guides

A Sharper Sword for More Effective Sales Incentives

Posted by Jason King on Jan 23, 2015 1:00:48 PM

Change_is_not_a_priorityIt never fails.

Talk to a channel marketing manager who has been running spiffs, STAs or other incentives the same way for years on end and they will say that making changes is “not a priority.”   Almost as frequently, those same people are operating their programs in-house, using their own people.

It just seems kind of odd. 

If you are in the business of building and selling the world’s greatest widgets, how is your competency at operating the world’s greatest sales incentives?  After all, that’s not really what you do, is it?

New Call-to-action Many trade or channel marketing folks we speak to find themselves frustrated – in a crowded marketplace where all of the competitors offer sales incentives, how the heck does want make sure that their program is the incentive-iest?

Here’s a quick checklist to help you make sure that you are offering the best programs possible and moving the needle as far as you can each day.

are_you_burning_resourcesWho is managing our programs? Is that the highest and best use of their time?

When we waste time, we’re wasting money – tragically, we often don’t even realize how much we’re wasting of each! Engaging an expert third party to operating your incentive programs is a great way to make sure that you are keeping abreast of best practices and in touch with your channel. Specialists know what to watch for, more on this in the below points but ultimately your in-house people have better things to do to push your brand forward.

How To Motivate Salespeople Are we doing a good job of engaging our sales channel?

If you are disconnected from the people selling your products, you are leaving money on the table and, to be blunt – that money will be snatched up by competitors who are doing a better job of connecting with the front line sales people. 

How fast are we paying out on approved claims?

We are all humans, and the best way to make sure that our brain connects a reward with an action we’ve taken is to make sure that the shortest amount of time possible has elapsed between the action and the reward.   Check out this video for a quick, appropriate elaboration on this point.

E-Book Fraud Prevention and Reduction Who is managing the risk and compliance considerations?

“The world of incentive marketing is a world of fraud,” says our CEO, Jason Atkins.  Sounds harsh, but when you consider the volume of funds that changes hands during a typical incentive campaign and further consider the social-business implications of having to police your own channel for fraud infractions, it makes sense to ensure that compliance is baked right in to your campaign from the outset so that down the road you don’t have to deal with any uncomfortable situations that may result.

How good is my program performance data?

Heck_Yeah_Success_Kid“How’s the program performing?” If you dread answering this question at a board or leadership team meeting, you may need to look at improving your reporting.   Channel marketing is actually a super fun job – you are giving away vast amounts of the company’s cash to help build goodwill in the channels.  People love you for that.   Problem is, if you aren’t watching the data to know who is getting the money and whether it’s having the desired effect on your sales there are people who will not love you for that. They may even be the people who sign your paycheck. 

Sales incentives is a crowded, noisy space.   The best way for you to cut through that noise is to always be tinkering, testing and measuring how your brand’s incentive offerings can light up the channel. Make some noise, stand out and have fun. Be the best.

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kingjasonJason is the Content and Community guy at 360Incentives.com Connect with Jason on Twitter @JayKing71LinkedIn or Google+  360 is changing the world of incentives.  To find out how, book a call with us now! 

Topics: sales incentives

Top 9 Things To Do In San Francisco

Posted by Jason King on Jan 21, 2015 1:05:00 PM

business_travellerIf you travel a lot for business, there’s a good chance that you’ve found yourself in a strange city looking for a great meal, a cool place to eat or just a great spot to go for a run or cycle.   You’re not alone – chances are that at any given moment, a member of the 360 team is on a plane in mid-flight.   Our CEO alone will rack up 232,164 miles of air travel for 2014! 

There is also a good chance that somewhere along the way, you’ve learned that not all Internet review ratings are created equal and your experience in no way ends up resembling the experiences shared by reviewers of an establishment.

Fear not.   We’ve collected the tribal knowledge of our team, some locals we know and some out-and-out know-it-alls to bring you a collection of carefully curated experiences for next time your travels take you to the Bay Area.

Things To Do In San Francisco:

Zuni_Cafe_San_FranciscoEat

Zuni – Zuni’s website will tell you “Our daily changing menus are inspired by seasonal organic ingredients and incorporate traditional regional French and Italian cuisine. Nearly all of the produce, meat, and fish is farmed or harvested in a sustainable manner.” 

A more objective endorsement comes from Andrew Knowlton, aka The Foodist from Bon Appetit magazine and a professional eater (seriously!): I know it’s cliché but every single time I go to San Francisco, I don’t care if I am there for 12 hours or a week, I always go and eat lunch at Zuni. 

Swan Oyster Depot – Want to get a really good bellyful of incredibly fresh seafood?   Here’s a cozy spot with some of the best seafood in town including beautiful, simple sashimi as well as a solid drink menu.

Knowlton adds, “I don’t really wait in lines. But I will wait in line for that place. Hopefully it’s Dungeness crab season, so you can get Dungeness crab and then order the scallops that they just kind of slice sashimi style with a little bit of lemon, salt, and olive oil. And those guys are total pros, making you feel welcome and the next thing you know they are giving you shots of tequila from that little barrel that they have up there.

The Progress – Are you the type who is always hunting down the newest/hottest spot in town? Check out The Progress, the latest offering from the folks behind one of SF’s other most desirable tables, State Bird Provisions. 

At the time of this writing, The Progress is still only a couple of weeks old, but the word is good from our little network so far. Check out this Yelp review: High expectations walking in here last night, particularly given the success and quality of State Bird Provisions. Brioza and Krasinski do not disappoint! Beautiful ambiance and nice casual setting.

vantigo-toursMeet

Looking to have a meetup with a contact while you’re in town and want to get out of the usual spaces?  Think outside the convention centre! 

Take a tour, man… Pile your group in a vintage VW van and let Vantigo show you the sites and/or the city lights. Other tours include a selection of SF’s robust microbrewery scene or the “Oysters, mead & cheese expedition.”

Tailor Talk – Book an appointment with Trumaker, a mobile shirt tailoring service, and have your group get measured for some snappy new threads while you discuss the matters at hand.

Feel Like You’re Floating - Let’s pretend that Air B’N’B had a child who couldn’t get enough of the sea.   That would be Boatbound, a service that helps you connect with privately owned boats and yachts made available for rent by their owners.   SF Bay + Boatbound = meeting space to remember.

Get Moving 

Street Art Tour – Download the 1:AM app for iOS and take a curated tour of SF’s incredible street art.  From the 1:AM website:

1AM Mobile is a street art guide curated by a global community.   As a community driven photography app, 1AM Mobile celebrates art in the streets by letting members capture and share what they see in the streets and also view and share what others members have contributed.  In essence, 1AM Mobile aims to tell you what’s up in the streets and let you take part in documenting street art history.”

Hiking_Trail_at_Lands_End_CaliforniaThe Land’s End Trail – Hike up The Land’s End Trail for some marvelous, breathtaking views and to have a go at the labyrinth located at Eagle’s Point. 

Walk or Cycle the Oakland Bay Bridge - For the first time in history, pedestrians and cyclists have the chance to travel across the new East Span of the San Francisco - Oakland Bay Bridge.

Two-thirds of the Bay Bridge Trail opened to the public on September 3, 2013, allowing visitors to traverse just past the span's 525-foot signature tower. Before the pathway can be extended the 2.2 miles between Oakland and Yerba Buena Island, contractors must dismantle a portion of the original bridge that sits in the way. 

Got your own favourite recommendations for visitors to San Francisco?  Please make the world a better place by sharing them in the comment section. Happy travels!

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KingJasonJason is the Content and Community guy at 360Incentives.com Connect with Jason on Twitter @JayKing71LinkedIn or Google+  360 is changing the world of incentives.  To find out how, book a call with us now! 

PS - We also have team-tested guides to Las Vegas, Detroit & Chicago!

Top 7 Things To Do In Detroit

Posted by Jason King on Jan 11, 2015 7:00:00 AM

detroit“First thing is bring a camera because you won’t believe what you see,” said my friend Jer, a frequent Detroit visitor when I asked him about his favourite things to do in the Motor City.  “I love walking through the downtown to check out the empty skyscrapers.” 

Detroit has been in a challenging period of transition for a while, but that doesn’t mean there’s nothing to do while you’re there.  Quite the opposite!   The current state of Detroit makes for some very interesting tourism, photo ops and reflection. 

We’ve collected the tribal knowledge of our team, some locals we know and some out-and-out know-it-alls to bring you a collection of carefully curated experiences for next time your travels take you to The Motor City.

Things To Do In Detroit:

hitsville_21.  Hitsville, USA – As a musician and music fan, one of the first things that pops into my mind when I hear the name Detroit is the huge body of influential pop music created in and influenced by Motown.  

If you’re a fan, you need to check out the Motown Museum.

2.  Dorothy Turkel House – If you’re interested in unique architecture, you’re going to want to check out this uncommon property on Seventh Mile.  Ms. Turkel commissioned this house from well-known architect Frank Lloyd in 1955 and it is the only one of his works in Detroit. 

Note that the house is not an official tourist attraction, but if you’re keen, we’re sure you’ll find a way.  Here are some photos taken prior to the recent million dollar round of renovations. 

3.  Michigan Central Station – Another remarkable property worth checking out, but also not officially “open” to visitors is Michigan Central Station

Time magazine says of the landmark When Michigan Central Station was built in 1913, it was intended to be a key gateway to the Midwest. By the late 1970s, however, the massive depot southwest of Detroit's downtown had fallen into disrepair, and the last train left the station in the late 1980s. Now it's shuttered, a failed modern Greek temple. 

Detroit_Eastern_Market4.  Food Tour – Want to catch some authentic, local flavour – literally?  Make a trip to the Detroit Eastern MarketThe market and the adjacent district are rare finds in a global economy - a local food district with more than 250 independent vendors and merchants processing, wholesaling, and retailing food.

5.  Get Lively – Like many North American cities, large numbers of immigrants who came to Detroit tended to flock together in their adoptive home and during the 20th century, Detroit’s Greektown became known for it’s vibrant culture and restaurants. 

6.  Urban Exploration – As referenced above, there are ample opportunities in Detroit for the urban explorer to wander around some iconic American buildings which have fallen out of usage.

Have a look at this team’s video of The Abandoned Pontiac Silverdome Stadium.

 

 

7.  Scrape The Plate – Chef Michael Symon’s acclaimed restaurant Roast is a fantastic spot for an intimate meeting or simply a remarkable meal. 

This enthusiastic Yelp review from a Michigan local says it well: “Wow.....this place was one of my best dining experiences in Detroit!”

Got a personal recommendation for visitors to Detroit?  Please make the world a better place by sharing in the comment section.  Happy travels!

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KingJasonJason is the Content and Community guy at 360Incentives.com Connect with Jason on Twitter @JayKing71LinkedIn or Google+  360 is changing the world of incentives.  To find out how, book a call with us now! 

If you found this handy, check out our travel guides to Las Vegas, San Francisco and Chicago!

Topics: Travel Guides

The Power of Real Time Dashboards In Agile Development: Visualize & Attack

Posted by Mario Pareja on Nov 18, 2014 4:52:00 PM

I want to share a couple things that our team has learned along our journey into real-time production monitoring.  Mainly, it’s about the realizations we’ve had surrounding the importance of shortening the feedback cycle when it comes to designing dashboards during development.  

Much has been said and written about visualization of what your app does in production – I’m sure you get it by now.  I’m talking here about the importance of having the exact same view you would have in production at development time and what a powerful realization this has been for the team and I. 

Maybe the easiest way to start is with a metaphor.Was_This_Built_In_The_Dark

Imagine that you were a carpenter, building a wooden nightstand for someone.  You are handy with the tools, maybe even a master carpenter – you really know your stuff, development-wise.   Imagine though, that you are crafting each part to perfection – you have a great blueprint to work from and all the finest tools, but all your work is being done in a darkened box behind a curtain.  To shape and assemble the nightstand, you need to reach into the dark box and fumble with all the pieces and then keep assembling them and testing out the nightstand to make sure it seems to be working properly – that the drawers are opening, the top is on top, the bottom is on the bottom etc.

Doesn’t that sound...kind of stupid?

Why Dashboard?

But let’s bring it into the dev world now: pretend that we’ve built a cutting edge, successful training platform.  We’re “capital A” Agile Development, we’ve got a tight set of unit tests, an acceptance test.  We’ve also got some form of delivery pipeline and we’re somewhat regular delivering to production.  When suddenly it starts to hit us: Slide28beginning with a single email from Bob.

Bob says he has spent the entire week working through the 24 lessons, but at the end the app wouldn’t let him complete the course.  A few more emails come in with the same problem.  Then a few hundred more.   It turns out that we missed a cache-busting javascript file so people with cached versions couldn’t complete the lessons.  Hundreds of people putting in the time and effort to take the training and not finding out it wasn’t going to pay off until they had already completed the entire course. 

How could we have seen this coming? 

I say that the usual methods of contrived testing would not have revealed the problem and that’s because the problem didn’t come in the form of an error, it came in the form of an omission.  I’ve got this thought – mind you it isn’t fully formulated yet – that monitoring these types of metrics is akin to constantly running acceptance tests telling you that business value IS being delivered.

Slide30How Have We Done It?

We have been leaning on open source tools – they could be more mature but it has been working great for us, nonetheless.  We push our metrics to statsd, which aggregates and forwards them to Graphite.  Graphite efficiently stores time-series data, query and applies crazy interesting functions to it.  We then use Grafana to create graphs from Graphite data and put together entire dashboards to measure app activity.  Keeping an eye on trends uncovers issues and opportunities you would have otherwise not seen.  

The dashboards need to be managed like code and you want them consistent across environments.  For us, having new graphs show up in all environments is huge, so our dashboard nodes update on commit.  To be clear, all of this is a developer task – you are going to be using it, you are going to benefit from it.

Capturing log entries and metrics is dead simple.  It’s knowing what to capture that is difficult and we really don’t know if the data we’re capturing is going to be helpful until we visualize it.  We get it wrong all the time, of course, but that’s the point here; what makes sense when you’re typing away in your editor often makes zero sense at the user level.  Would you ship a new UI without ever looking at it? 

The fact is that you need to know in advance what will happen in production and the best way to do that is to have a production-evolved model to refer to while you’re building it.

Slide44Once you accept this idea, you also need to know how easy it is to shorten the feedback cycle by scripting a production-like world on your laptop.  When you realize the tiny investment to build this little world for yourself, you will never return to the old way of working. 

I want everyone to re-think how we look at this - make that production insight a first-class citizen right from the get go, day one of starting to write the code.

If you’d like to see another piece where I get into the weeds a bit more on this, let me know in the comments or ping me on Twitter and I’ll put something together.   Here's my deck from the talk I'm giving on this topic today:

 

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Mario_Pareja_360incentivesMario leads the Software Platform Team at 360incentives. Amid raising three kids under the age of five, Mario finds time to hack on various projects and play Aussie Rules football. Connect with him on Twitter at @mario_pareja.

Topics: Agile Development

Incentive Program Cash vs. Rewards: Final Fight?

Posted by Jason Atkins on Oct 21, 2014 3:38:12 PM

It’s not that I expect this discussion will ever go away.  Or will it?

As technology continues to refine our ability to measure incentive programs inputs, outputs and effectiveness it is very likely that at some point there will be an ultimate victor in the ongoing debate about cash vs. other rewards. 

For now though, when people ask me for a definitive answer on this question, I have to answer a question with a question. 

rsz_different_people_have_different_preferencesWho Is Your Audience? 

An incentive program has a lot of moving parts and each incentive program is built with different goals in mind.   Perhaps you are trying to boil the ocean with a promo to gain market share in a new territory?   Maybe you are trying to win more shelf space at retail?   You might be trying to clear out the last of a discontinued SKU - the product is not significant here - what matters is the people.  Ultimately people will be the determining factor in the success or failure of your program, so you should really just ask them what they want. 

Case In Point

Many of our clients consider how they use our software to be a competitive advantage, and it puts us in a tight spot when we want to publish case studies that we think will help improve how our industry does business. 

Equally, there are many excellent, properly scientific academic studies publish on this topic.  Many use experimentation as well as foundations of psychology and neuroscience to successfully demonstrate to us every reason why non-cash rewards should be a more effective driver of behaviour than a simple cash incentive program. The thing is, we now have claim data from over 15 million claims and our results contradict that notion.

How To Motivate Salespeople Before we ever wrote a line of code for this business, we interviewed hundreds of people who could be potential users of our software - CMOs, brand managers, field sales reps and retail sales associates.   Over 99% of them told us that cash is what always moves the needle for them.   To support the findings from our less-than-scientific study, over the last three years we have had a client transition from a points/rewards program to 100% cash-based rewards based solely on fulfillment from demand.

Here’s some anonymized data from a world leader in the appliance space. As I mentioned, they were running 100% points-based programs for their channel.   Salespeople would accumulate points and then order rewards out of a catalog - pretty standard, old school program.   It had always worked for them, so they wanted us to operate a points program for them.   It was my job to challenge them and ask, “Have you ever surveyed your people in the channel to ask what they want?”   Naturally, they had not because the program appeared to be working great.  

Survey_saysThey were so sure that the old way was the right way that before they moved to our technology, they surveyed their channel user base and said “we’re looking to make some changes, what do you want for your sales incentives?” And so, they launched a program with us where participants could choose to have their cash rewards loaded to an open, branded reloadable card or they could continue to participate in the points program.  After three years and millions of claims, the cash rewards count for over 95% of their redemptions. And their sales at retail continue to go up, not that correlation automatically equals causation, of course.

When you are planning your programs, it is important to remember: people have to be taxed at the same rate as if they were receiving actual cash, so the main lesson is to make sure they understand that and then give them the choice.   

points-vs-cashPeople continue to be surprised at the tax implication of receiving non-cash rewards and that tends to make them look at points programs more closely and often moves them to cash.

  1. If they are being taxed the same as if they had received cash, they will often prefer the choice that receiving cash gives them.
  2. Rewards catalogues often place a premium on day-to-day items.   The Internet has made this even easier to detect and made shopping incredibly quick and simple. If people feel that they are being forced to pay an unjustly high value for rewards goods, they will prefer the cash.
  3. Many people seem to like the idea of having a “secret” card to use as a slush fund.

If you want your programs to drive loyalty in the channel, it makes sense to make sure that people realize that the tax implications of both types of programs are so similar.   Finding out after the fact that they paid tax on a rubber dinghy with your company's logo on it at a higher rate than if you had paid them enough cash to go buy their own dinghy can put stress on that loyalty.  

As far as answering the question of cash vs. rewards goes, however: I say deploy a survey and let the people decide. Different people have different needs and the best types of programs will always honor the needs of the individual.

NOTE: This article was inspired by a question I received during a webinar I recently presented.  If you are interested to learn more, the video of the webinar is available HERE and the slide deck is available HERE.

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jasonJason is the Founder/CEO of 360Incentives.com    Connect with Jason on Twitter @jayatkins or Google +.  

WEBCAST ALERT!  On October 28th, join Jason, along with Anthony Robinson, Solution Principal at SAP for a live webcast where they will discuss today’s big data challenges and opportunities.  They will share best practices on how to harness the secrets to driving positive customer engagement and here’s a hint – it all starts with data.

Rebate Program Breakage vs. Satisfaction

Posted by Jason Atkins on Oct 15, 2014 4:19:47 PM

Here’s a new mindset I’d like to introduce you to – a change of approach for how you market to consumers and the channel.

I want you to start thinking of budgeting for breakage in your rebate programs as an embarrassing relic from the past.  

David_Hasselhoff_Night_RockerFrame it in your mind like that David Hasselhoff poster you had on your wall as a kid – the one from when “The ‘Hof” was selling all those records in Germany.  Or think of it as that double denim acid wash outfit that you used to look so fine in.  Something that was cool at the time, and maybe even served a function in your business at some point, but is now outdated, useless and can even publicly discredit you and your company.

The same is true of building breakage into your rebates.  Let’s look at the new facts of life with some sample budget numbers:

If you’re running an incentive program that pays out anything above $25, the average breakage is currently in the single digits.   Redemption rates have actually been trending up for a few years now – remember that this is a good thing.

Angry_Rebate_CustomersAssume now that you are running a million dollar promotion; if you drive breakage by building it in to your program processes, figuring on an average rate of breakage, you may save yourself around $60K.  Building in breakage means using any of the following tactics:

  • Terms and conditions that are tough to read or understand.
  • Relying on 100% postal mail for claim entry and payment.
  • Offering only a P.O. box as the consumer’s point of contact.
  • Offering a toll-free number with attendants who are un-empowered and or unhelpful.
  • Offering claimants no visibility into the status of their claims.

(Click here for a quick look at how and why many companies are modernizing and digitizing their campaigns.)

In the old world, this would always work out fine.   It could be argued that maybe it was even worthwhile; you’re breaking a few eggs here and there, but overall the campaigns savings you realized were worth having to put out a few fires.   But let’s look at it in a more modern context.

timothy-ferriss-hat-headshot-four-hour-work-week-body-chefThe Tim Ferriss Effect

My friend Tim Ferriss is, among many other things, a best-selling author and podcaster with a very large social media following.  As I write this, he has over 685,100 followers on Twitter and likely about the same or more on Facebook.  His blog gets traffic from over 1.5 million unique visitors per month.   He has massive reach; it could be said that he is his own brand.

Cliff_Hodges_Bow_Hunting_In_CamoTwo years ago, Tim and I went for a survival weekend course run by our friend Cliff Hodges, who Tim mentions in his book The 4 Hour Chef.   Cliff is an incredible outdoorsman and I highly recommend his courses in wilderness survival, but his website really needed some help.  When I got back from the trip,  I worked with my marketing team and we built Cliff a new website.   As the site was nearing completion, I sent a link to Tim to check it out where it was running on our development server.  Tim liked the new site so much, that he tweeted about it to his followers and the resulting traffic overload immediately crashed our server! (Luckily it was just our development server!)

rsz_thumbs_downImagine if Tim had tweeted a negative experience that he had had with one of your products?

Prior to the ubiquity of Internet usage, dissatisfied consumers really had nowhere to turn for relief after a negative experience with a brand.  Even if they expended vast energy and personal resources, their voice was effectively the sound of one hand clapping and had little to no ability to alter public perception of the brand.   Brands have always been extremely adept at handling complaints and other PR challenges, mainly because of the consumer’s inability to make their voice heard.   The brand was the party who controlled the advertising and PR budget and whoever controlled the budget, controlled the message and so the public perception of the brand remained whatever the brand wanted it to be. 

social-reachAs is the case with Tim, each person with an Internet connection has the ability to become their own media brand, publishing content online in forms such as blogs, review sites, video sharing, podcasts and, of course, social networks.   There is no barrier to anyone growing their reach – high quality, interesting and novel content is reward by engagement much the way traditional media always worked.  This means that brands can quickly lose control of the public’s perception of their brand and, if handled incorrectly, the downward spiral of perception can even lead to a downturn in the company’s stock price.  (For more on this, refer to the Domino’s Pizza YouTube video scandal of 2009 where the company’s shares plummeted 10% within a week of a scandalous video being posted.)

So let’s now get back to your promotional spend – assuming that breakage lets you hold back $60K in your campaign. Is it worth the money if your company has to deal with PR challenges that can erode your brand equity and waste massive amounts of time and energy?   I would challenge you that it is not.   

Dominos-Brand-DisasterIt used to be as simple as losing a customer, maybe a customer for life and it used to be much easier for companies to understand what customer lifetime value (CLV) equated to for them. But now, you risk not just losing that customer but also every person who they are connected to. You have broken their trust, but they still have the trust of their friends, their families and those who follow them on these new media because we trust our networks and we trust those who we feel connected to.  

To wrap it up – if you have a million dollar promotional campaign and you really want to hold that $60K you might net from breakage, then I would challenge you to set your budget for $940,000.   In your planning, focus on how you can deliver the best possible customer/user experience at every touch of the campaign.  How can you make the rebate redemption process an exciting extension of your brand experience, instead of a necessary evil?   Believe me – those who have come before you have set the bar low. 

Embarassing_Trends_From_the_80sFocus on delivering the best possible experience to all those people who have trusted you by buying your products and are counting on you to deliver on the promise of your rebate offer. Drive true advocacy with your promotions.

Building in breakage used to be an informed business risk – experienced professionals knew how to account for it in their planning.   It’s not like that anymore – building in breakage is now like gambling with your brand equity. And it’s outdated - just like that double denim acid wash outfit.

NOTE: This article was inspired by a question I received during a webinar I presented last week.  If you are interested to learn more, the video of the webinar is available HERE and the slide deck is available HERE.

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jasonJason is the Founder/CEO of 360Incentives.com    Connect with Jason on Twitter @jayatkins or Google +.

Topics: rebate programs, digital marketing

Malcolm Gladwell on Understanding The Importance Of All-New Everything

Posted by Jason King on Sep 18, 2014 10:30:00 PM

rsz_tire_business_or_safety_businessIf you work in marketing, occasional testing of what your brand is in the business of delivering is a useful and powerful exercise.   

Here’s what I mean: your company may well manufacture well-engineered tires, for example, but people may buy them because they believe that installing your tires on their cars will keep them and their families the safest out of all available tires.  To your customers, you are actually in the safety business.  Perhaps you build incredibly advanced laundry machinery but your customers love that your machines gently and effectively help to keep their clothes clean and beautiful, and so on.

Understanding what you ultimately deliver for people helps you to market to them more easily and builds a more meaningful connection between your brand and customers.  

rsz_malcolm_gladwell_keynote_inbound_2014

Earlier this week I attended a keynote by Malcolm Gladwell who shared a compelling parable which illustrates the power of the above exercise while gently reinforcing the postulation of his latest book, David and Goliath.  It is the story of a truck driver named Malcom McLean.

rsz_malcolm_mclean_at_railing_port_newark_1957_7312751706Unless you happen to be in the intermodal freight business, there is almost no chance that you have reason to have heard of this fiery contrarian.  Nonetheless, it is fair to say that McLean’s vision for a complete re-framing of the shipping business has become the backbone for globalization of production and distribution of consumer goods.  You see, McLean was a hustler who grew impatient and hostile whenever any of his time was wasted.  One day as he sat in his truck for twenty four straight hours waiting to be offloaded at the Newark seaport, he channeled that frustration into a new way of thinking about the shipping business.

The idea of driving a trailer straight onto a ship and then dropping it right in the hold was not new, but all who had experimented with it in the past (most notably the US Army) had determined that for many reasons it was not viable.  McLean himself had experimented with dropping a trailer onto a ship bound for London UK in order to save time at port, only to realize that his company could not make sense of having their equipment off the road for so long while the steamship line could not make sense of having the extra weight aboard.

Disruption Of An Industry

But McLean knew he was on to something.  Another experiment, this time with 50 custom-purposed containers lifted off the backs of his fleet of trucks and placed straight into the hold of the cargo ship, sealed the deal.  On April 26, 1956, the SS Ideal-X set sail from the Port Newark-Elizabeth Marine Terminal for the Port of Houston.  McLean flew to Houston in order to oversee the docking of the Ideal-X and as the ship put in to port, McLean found himself overcome by emotion; awestruck with the realization of the monumental amount of leverage he had discovered.

shs1221At the time, the longshoremen’s union charged $5.86/ton to offload cargo from trucks and load it onto ships by hand.  The process was also incredibly time intensive - a truck could wait twenty-four hours just to get unloaded and it might be a full month before the cargo was loaded onto the ship itself.  

Loading a container onto a ship, by contrast, could happen in less than eight hours and at a rate of just sixteen cents per ton.  Not only were the trucks back on the road sooner, but the ships were back on the water much faster too.  The new efficiencies were hugely significant and they were everywhere.   The challenge was that McLean was the only person who saw it this way.  He was David.  

Understand, McLean had no supporters - no other shipping companies wanted any part of it and the unions were violently opposed to this threat to their way of life.  Even his own sales force could not comprehend the magnitude of the change that McLean was willing to work through.  What McLean had was a powerful vision, a burning desire to make it happen quickly and boundless contempt for the word “impossible.”

rsz_port_of_singapore_keppel_terminalOf course, we know how the story ends: intermodal containerized freight is now the standard for shipping: it’s everywhere.  McLean overcame what must have seemed like insurmountable obstacles to make it happen - standardizing of all shipping containers, everywhere.   The manufacturing and installation of specialized cranes that could handle the shape and weight of this new mode.  But by far the biggest obstacle he had to overcome was that nobody could else could understand how McLean had completely re-framed every freight and shipping-related business.

 rsz_gallery-image-three

The steamship captains wanted to keep being captains of the steamship business.  The trucking industry magnates wanted to keep being the kingpins of the trucking industry.   Likewise with the railroad people.  The entrenched industries were Goliath.  

McLean had come to realize that they were all now simply “in the stuff-moving business.”  That was their new work.  That was what they offered to their customers.

Gladwell says that if we look at a list of top-performing shipping companies in the early 1950’s versus now, there is no overlap at all.  Companies who were in love with their previous success and hubris which focused more on the mode than the actual outcome fell away with time as new McLean and his intermodal “stuff-moving” methods took to the roads, rails and sea.  They are all gone because they could not accept the re-frame. 

What assumptions about your space could you be testing today?  What giants could you slay?

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Charity_Water_Water_Walk_at_Inbound_2014Jason is the Content and Community guy at 360Incentives.com and is in Boston this week for the #INBOUND14 conference.  Connect with Jason on Twitter @JayKing71LinkedIn or Google+  

Topics: Innovation

Guy Kawasaki & The Freeze On Innovation

Posted by Jason King on Sep 15, 2014 11:30:00 PM

guyGuy Kawasaki’s opening keynote at Hubspot’s #INBOUND14 conference today had the massive crowd cheering, laughing, hooting and blurting out answers; the very type of engaged reception you would expect for a polished pro who has been in the business of telling engaging stories for at least three decades now.  

His topic today was 10 Lessons I Learned From Steve Jobs.   As a former product evangelist with Apple going back to the days of establishing Apple’s original Macintosh team, Kawasaki was part of an elite group of engineers, product developers and visionaries who worked to conduct their boss’ soaring vision from the esoteric, to the tangible and finally into the physical worlds.   

Ad_apple_1984The boss was, of course, Steve Jobs and his vision was to challenge authority, sameness and dullness - in Kawasaki’s words, to “jump the curve.”

The thing that gives great innovators such a radical advantage in business is actually the fact that most of their ideas seem too lofty or maybe even impossible to others.   This advantage is bolstered by the incumbent market leaders who are doing so well, they don’t have time to hear about any new curve.   Tell them how to steepen the curve they’re on and they’re all ears, but this is the demarcation point between “current leader” and “greatest ever.”   

Henry Ford famously once said “If I had asked my customers what they wanted they would have said a faster horse.”   Today, Kawasaki used the evolution of refrigeration as the perfect parable to explain the importance of jumping the curve.

The_Top_Ice_Guys_Back_ThenIn the early days of household refrigeration, Ice Guys who lived in cold climates had it made.  The job was to go out onto a frozen lake, cut a huge piece of ice with your saw and then use sleighs and wagons to deliver blocks of ice to homes and stores so people could keep the items in their ice boxes nice and cool.  If you were a really rocking Ice Guy, steepening the curve for you might mean finding saw blades that stay sharper longer, or a sleigh that could hold more tonnage.  Perhaps it meant special feed for your horses so they could work longer and harder, but all innovation was geared toward doing the same things better.   

Then the curve got jumped.

Ice_Guy_SwaggerSomebody invented a machine where the blocks of ice could be made in factories.   No longer did you need to live in a cold place and no longer did you need a lake.   Now, the top Ice Guys just needed a supply of fresh water and their amazing machines could make ice blocks for delivery to all of their same customers.   You could have fresh, cold ice in the middle of Arizona - imagine!   Steepening the curve for these Ice Guys might mean machines that could freeze the water faster, new tools to lift the blocks more efficiently and maybe even trucks to make the deliveries.   Surely this was the height of refrigeration technology - what more could humans ask for?

A new curve came began when Frigidaire introduced the first self-contained electric refrigerator in 1923, evolving by the 1940s to a unit with a home freezer compartment.   Ice blocks, ice cubes, crushed ice could now be manufactured right in your own kitchen.  By now, the need for ice was off on the periphery anyway - the electric refrigerators pumped freon through their copper coils and created their own cold air, keeping food fresh without the need for large, unwieldy blocks of ice.  

It_needs_to_be_believed_to_be_seenHere’s the point woven through this exemplum of the ice business:   

The true leader, the genuine innovator - the Steve Jobs of Ice Guys as it were - would have been the person standing out on the lake with his saw, freezing in his boots yet staying warm by the internal fire of his own vision.  A vision for an incredible machine; a self-contained as-yet-undetermined something that would one day be in millions of homes, running off of some sort of power source and making ice on demand for everyone.  But it had to be believed before it could be seen.

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KingJasonJason is the Content and Community guy at 360Incentives.com and is in Boston this week for the #INBOUND14 conference.  Connect with Jason on Twitter @JayKing71LinkedIn or Google+  

Topics: Innovation

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