What is a growth incentive program?
Growth incentive programs are used by businesses to encourage greater performance or behavioural change over a defined period of time. This style of program is powerful in the B2B space as they are transparent and measurable for businesses, driving profitable and incremental growth.
Today’s incentive programs utilise aspirational travel or rewards offerings and carefully structured sales targets to motivate and inspire team performance, product switching and ultimately drive growth for the company. Simply the programs are a profitable way for businesses to give more in order to get more from their customers.
In the B2B space, incentive programs can be effectively utilised by manufacturers to push products through a distributor or wholesaler supply chain. An enticing reward offer, combined with a relevant sales plan for each customer to identify how they can achieve their targets is key to engaging customers and generating product switching and discretionary sales to your brands.
In low growth or mature markets, it is the discretionary support towards your brands created by the incentive that will deliver double-digit year-on-year growth. Growth incentive programs benefit businesses as they deliver them guaranteed sales growth, as well as a competitive advantage against other businesses within their industry.
To ensure sales growth is netted for businesses, Incremental have developed an ‘Upside Only’ financial model that has successfully been executed across more than 100 programs globally. The Upside Only model ensures the incentive program is self-funded from the incremental margins that the program generates, ensuring businesses only ever fund rewards after growth targets are achieved through a tiered approach.
The Upside Only model delivers:
- Measurable gains
- Profit growth
- High return on investment
- Exponential growth
While incentives are proven to drive sales growth for customers, they also successfully empower sales teams and boost overall engagement amongst teams and businesses. To ensure the best engagement is generated through a program, the quality of the reward needs to be significant and if possible, establish an emotional connection with your brand or company.
The more valuable and aspirational the reward is, the more appealing the program becomes and the best chance it has to influence a change in behaviour for those involved. The incentive reward could either be merchandise or a travel experience, but it is important to remember that cash-rewards aren’t recommended as the best option to drive behavioural shifts.
Recent research conducted by Incremental found individuals who were rewarded with cash spent their extra earnings on financial commitments, such as bills and credit cards. Whereas, those who received non-cash incentives, such as a paid-for dinner or an overseas trip, were more grateful and formed an emotional attachment to the business, making them a loyal contributor.
So, overall growth incentive programs are implemented by businesses who want to influence behaviours by a specific group and generate an increase in sales. Targets are modelled to drive mutually beneficial outcomes, steal market share and drive growth, however for this to be achieved, the incentive at the end of the buying period needs to be aspirational and desirable.
Consider 5-star holidays and experiences – the bigger and better the reward, the higher the engagement and chances of targets being met. Think bold and creatively about the rewards offered because if they are self-funding there is no actual cost assuming the target has been achieved.
We have regularly seen customers achieve between 80% and 200% growth when they participate in a once in a lifetime experience.
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