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    Marketing: The art of giving

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    AA06-Sep-Oct-2004-hancock_largeCould the art of giving be the key to boosting your sales, motivating your employees and enhancing your market position?  According to a US industry body, North American businesses spend more than US$25 billion each year motivating sales people to sell, customers to purchase and employees to be more productive. It’s called incentive marketing and it’s a fast growing tool for the fast-growth company.

    What is incentive marketing?

    Incentive marketing is based on the old ‘carrot and stick’ philosophy, which holds that an incentive is a powerful motivator. A good example of incentive marketing is the discount fuel deals offered by supermarket chains. There is evidence to suggest that this scheme has been successful in encouraging consumers to switch stores.

    Incentive marketing needs to be strategic and structured. An individual is not necessarily motivated to obtain every offered incentive. The incentive needs to be meaningful – what motivates one person might not motivate another. It also needs to complement the existing salary package, product or service provided, not replace or detract from it.

    For example, in some cases monetary awards will be less powerful than tangible gifts. Money has little bragging value and is more likely to be spent on bills and other mundanities rather than splurged on luxuries. On the other hand, people can visualise themselves receiving and enjoying a tangible reward, like using a digital camera or wearing a quality watch.

    What will it take?

    Attractive incentives can help to overcome resistance to change. Before developing your own incentive program, you need to consider what interests and motivates the person whose behaviour you are trying to influence. Research the following questions:

    • Who are you targeting – employees, customers or clients? What do you know about them?
    • What incentives would motivate your target audience? What would be meaningful to them?
    • Where is the distribution point for the incentive? Is it point-of-sale, the workplace or online?
    • What are you trying to achieve by introducing an incentive? A first time purchase, building repeat business or motivating staff to achieve a target?
    • When will you award the incentive? Will you award the incentive immediately or is it something that will be delayed?

    Employee incentives

    In the past the only employees offered extra incentives were sales people and senior executives. Today, an increasingly competitive market has led many businesses to consider incentive programs to attract and retain talented employees and to help them reach their potential.

    Employee incentive programs take many forms, including:

    • Profit share or employee share plans
    • Financial bonuses
    • Scholarships or awards
    • Gifts, such as expensive consumer gadgets
    • Travel opportunities

    Many progressive organisations have introduced employee referral programs, which reward employees for referring individuals who are subsequently hired by the company.

    Customer incentives

    Customer incentives are everywhere, from the discounted food and beverage offers at cinemas to the samples attached to women’s magazines.

    The key to choosing an effective incentive program is ensuring that the incentive lives up to consumer expectations. Make sure you test the incentive’s likely impact on your brand. If the incentive is perceived as being cheap or tacky, so will its purveyor.

    Incentive marketing can be a highly effective way to influence your customers and staff. Because without the carrot, you’re left with just the stick.

    Renee Hancock is a Group Account Director at Porter Novelli Melbourne. She provides public relations and strategic communications advice to corporate and government clients.