When it comes to gaining a competitive edge and increasing revenues, small businesses face multiple challenges. Some operate in industries where many companies vie for a relatively small customer base. Others find themselves in direct competition with larger companies with deeper pockets. Growing a small business often means finding creative ways to engage and motivate three key stakeholder groups: employees, customers, and channel partners (resellers).
New research from Berkeley Payment Solutions, the 2011 Canadian Incentive Trends Survey, shows Canadian executives plan to focus on corporate incentive programs to motivate stakeholders over the next year. Conducted in April 2011, the survey polled 429 Canadian executives from marketing services organizations, incentives firms, human resources consultancy firms, and corporations across industries and sectors. Of those, 38% were small business owners (defined as businesses with fewer than 100 employees).
The survey revealed that a strong majority (88%) of respondents said employee motivation is a top management priority in the coming year. Additionally, the results show that small businesses are also recognizing the value of using incentive programs to ensure all stakeholder groups are engaged:
Almost three-quarters (72%) of respondents said they have used corporate incentive programs as part of their business strategy.
More than half (54%) of those respondents felt they gained a competitive advantage as a result of these programs.
More than two-thirds (68%) said they were currently using incentive programs to motivate employees.
Other reasons for using incentive programs included increasing sales (62%), attracting new customers (41%), increasing customer loyalty (38%), supporting a product launch or promotion (34%), increasing brand exposure/awareness (31%), and rewarding channel partners (10%).
The business goal being targeted will differ for each key group. And those goals should be carefully considered when implementing an incentive program.
With employees, the goal is to create a highly engaged workforce by regularly recognizing employees for outstanding achievements. This helps small businesses retain key talent, reduce absenteeism, and improve overall business performance. Many businesses define outstanding achievement as continuously striving to increase overall sales or improve customer loyalty. For others, it's meeting more specific internal objectives. In all cases, the key to using incentive programs to engage employees is to offer rewards that are timely, visible, easy to use, and tangible. The rewards should also appeal to a range of recipients, regardless of age or demographic.
For customers, the business goal is to attract new ones, improve loyalty, and generate referrals. Businesses can reward customers for purchasing a specific product, referring friends and family, or remaining loyal customers over time. Again, the most effective incentive programs are timely, easy to use, and will appeal across a range of demographics.
With channel partners, the goal is to recognize and reward resellers and increase awareness of specific products. Because these partners sell many products from many different manufacturers., a strong incentive program - whether it rewards resellers for selling a certain number of units, providing exceptional customer service, or training their staff on how to use your products - will keep your business top of mind and provide a competitive advantage.
A good incentive program provides a strong return on investment, is easy to manage, and is scalable. It should also be easy to adjust the reward amounts offered and the performance metrics on which the rewards are based.
The incentive landscape is changing as more flexible and cost-effective options become available for smaller companies. New incentive options allow businesses of any size to reward performance, increase engagement, and create competitive advantage. By offering incentives that can be scaled according to business objectives and budget, all stakeholders can be motivated to help drive the business forward.
By David Eason, Special to Financial Post
David Eason is chief executive of Berkeley Payment Solutions, Canada's leading provider of Visa prepaid incentive card programs and services to companies across North America.