White paper motivation

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Motivation of your employees, resellers or customers: Read all about it in this whitepaper.

Motivation of your employees, resellers or customers: Read all about it in this whitepaper.

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  • 1. White paper Motivation in a fast paced world. About loyalty, motivation and recognition. Filip Modderie 0
  • 2. Management Summary Maybe you want to motivate your resellers to sell more of your products. Maybe you want to reduce churn on your customer base. Maybe you want to say “Job well done” to your employees that go the extra mile. Maybe you need: A motivational program. But how do you start? Keep these Key Success Factors in mind: • Clear program definition: o What do I want to accomplish with the Motivational program? o In what timeframe? o Who do I want to target? Is this target group in line with my overall objective? o Is the budget (both financial as FTE) in line with the program objectives? o Who will be responsible for the program execution? • Define in detail the program tracks: o What reward will I give for which behavior/target? o Can my targets be clearly identified and communicated? o Are these targets linked to the overall objective? o Is there a clear perception for the participants between effort/result and rewards? o Do all the participants have access to the reward solution? • Communicate the program: o Do all participants know of the programs existence? o Do I have enough action entertainment to keep participants interested in checking their status? o Do I also combine rewards with feedback gathering? o Link the appraisal to the rewards (combine extrinsic and intrinsic rewards). • Measure, capture feedback & adapt: o Calculate the ROI of your program. o Capture your participant’s feedback. o Adapt the program or your complete strategy. 1
  • 3. Introduction With a large and diverse customer base, complex and both direct and indirect channels, external sales teams and rising competition, motivation of your workforce or reseller network becomes more important on a daily base. In this whitepaper, the author gives you an overview of how you can maximize your bottom line by focusing on tangible rewards. In a business environment, motivation takes different forms: Loyalty Loyalty 1(countable and uncountable; plural loyalties) faithful to a cause, ideal, custom, institution, or product Be it customers, employees or resellers: You want them to be loyal, you want them to come back. A returning customer is your best (and probably most close) token of appreciation. They are saying: “I like your business enough to come back”. Returning customers do not only make your life easy, they also make your business more profitable: The cost of acquisition in most industries is still much higher than that of retention (disclaimer: take into account that the retention should only focus on the ‘right’ customers). A loyal customer/reseller/employee base is a prerequisite for all new marketing initiatives. Try to think of permission marketing, tribes, crowd sourcing, sharing, customer engagement,… without a sense of stability and mutual history. Motivation Motivation2 (plural motivations) Willingness of action esp. in behavior An incentive or reason for doing something. The most challenge stage of every strategic decision is to make people act accordingly. Every successful project manager can tell you that to arrive from strategy to goal, you need to be able to give people actionable targets (cfr. SMART) that are in fact a translation of the strategic guidelines towards a person’s actual job. By making a person’s goal concrete and clearly link the rewards he will receive when succeeding, you can make your strategy come to life. 1 http://en.wiktionary.org/wiki/loyalty 2 http://en.wiktionary.org/wiki/motivation 2
  • 4. Recognition Recognition3 honor, favorable note, or attention We all like praise; we have been programmed to long for it since we were born. It is one of the elements that drives us and makes us cope with the less nice parts of our jobs, environment or even friends and family. Goals You will not run a dedicated program without a return. Motivational programs can focus on different results. Drive Sales. A motivation program can aim at acquisition, up-sell, cross-sell,… The general idea is to reward people as directly as possible for concrete business results. E.g.: Salesperson Y sells 10 items of your new product X to an existing customer and receives a reward Z. Reduce turnover Programs can also aim to reduce the amount of customers or employees leaving your company. The ROI of such a program can be as high or even higher than a sales driven program, but the link between a concrete action and a reward is less direct. E.g. Resellers that are a selling your products for 5 years in a row get a reward. Create new markets / Share of market Programs developed to create new markets or larger the share of market are build to attract new customers, resellers,… This type of motivation is probably the most difficult to do and requires a strategic approach where motivational solutions are embedded in a global marketing approach. This type of goal will not be elaborated in this whitepaper. Recognition A last major program type focuses on recognition and feedback, where typically employees receive a reward from their supervisor when they went ‘the extra mile’. E.g. Ellen just worked during the weekend to help out the team that had 2 people ill that week. It is clear that all of these goals require a separate setup. 3 http://en.wiktionary.org/wiki/recognition 3
  • 5. Reward types We distinguish two types of rewards. Physical rewards: • Cash • Fixed gifts • Gift catalog Non-physical rewards: These gifts take a more social approach on rewarding and are mostly described as ‘praise’. Typical example is the “Employee of the month trophy’, where the rewards is based on peer recognition and social status. Remark: This document focuses on extrinsic motivation. There is plenty of literature available on intrinsic motivation, but since in a typical business environment, the needs of the company/stockholders/management by definition cannot be completely aligned with the personal needs of the individual employee, reseller or customer, the extrinsic motivation is necessary to motivate people to focus on the overall business goals. The best type of reward is off course heavily linked to the program objectives, but there are some general concepts to keep in mind. Limit cash If you ask participants what they want from rewards, they will all say: cash. Seems easy. Reality however, is not that simple. Giving cash might be the most easy solution (however, not the cheapest in most countries due to tax legislation), but it definitely is not the most efficient one. The main issue with giving cash as a reward is that it is not linked with your objective. Research4 shows that people who receive cash rewards see this as a part of their regular wage and hence does not represent a real reward for special achievement. Cash is used to do the grocery shopping, whereas a real gift is a constant reminder on the benefits of going that extra mile. Make available for whole your organization Motivational programs should typically apply to a broad participant audience. A lot of HR-build incentive-structures offer a large sum of money to the 5-10% top performers in the organization. Whereas these programs can help you to retain the ‘talent’ in your organization, a lot of the work is done by the vast majority of the 80% mid-performers on your payroll. By communicating 4 The incentive federation survey - 2005 4
  • 6. openly on the rewards all the people in your organization can earn and what they have to do for this, you unleash a broad motivational opportunity. Type of target participants and DMU’s It is important to be aware of your target group and who within your organization will typically be responsible for the program. Sales Loyalty Recognition Sales teams Employees Employees Target External resellers External resellers End customers End customers DMU CMO - CSO CMO – CSO – CHRO CHRO Communication A reward program that is not known to and used by the targeted participants is non-existing. Therefore, targeted communication is key to have a successful motivational program. You probably have already various communication tools/channels that are used to communicate with your target audience (a employee newsletter, a sales team emailing list, Intranet home page,…), so you should integrate the communication program into the existing communication mix. Individualization & Actionability A motivational program is just like a carrot: You communicate a specific reward when a specific result has been generated. As throwing one carrot in the rabbit hole will create chaos, conflict and confusion, you should make sure that the targets you set are (at least perceived) to be individual. By this we mean that every individual participant has to be convinced that when he changes his own behavior, he will be able to get to the reward (regardless of the behavior of other participants or external factors). The change in behavior also should be actionable. 5
  • 7. Methodology A motivation program is still too often done in an organic way where not much attention is given to a detailed strategic embedding of the program in the overall plans of the company, thus giving at best immeasurable or just straightforward bad results. A proven methodology should be followed in order to thoroughly reflect on all aspects of the motivation plan, define goals, participants and roles. In this paragraph, we elaborate on a basic program development methodology. Prerequisite: Strategic framework. Your company has a strategy (if not, you should probably focus on that before starting a motivational program). This should be your starting point to launch a motivational program. Make sure your motivational program is an integral part of your overall strategy. This might be a no-brainer, but failing in doing so will generate in unclear objectives for your motivational program, a lack of focus and resources, miscommunication and confusion. 6
  • 8. Phase 1: Objective definition. Starting from your overall strategic plan and eventually a GAP analysis, you define your objective. Here you choose your ballgame. Is it your objective to boost sales, do you want to reward your employees that go that extra mile or do you want to motivate your customers to engage in a conversation with your brand? It is clear that the definition of the objective is vital to have a successful program (even to define what a successful program is). Of course, you can have different programs that have different objectives. In this phase, the program sponsor and program management roles have to be defined. The role of the program sponsor is to internally support the program and is most common also the person who has the lead in objective definition and selection of the solution supplier. The program manager will be responsible for the actual setup and running of the program. In this phase, a feedback process should also be described: how will we evaluate and fine tune the program once it is running. Define also extra opportunities in this phase: Maybe you can use your motivational program also to gather feedback on other aspects of your organization. Regular pitfalls: • Not framing the motivation program in the overall strategy. • Unclear program definition. • Not taking into account the workload to make the program really live. Deliverables: • Program charter o Objective definition (in strategic terms). o Feedback loop definition. o Opportunities identification. • Role description of program manager. 7
  • 9. Phase 2: Objective definition In the next phase, we will segment the groups of people that will be participating in the motivation program. The best approach is to see your program participants as your market and take the time to do a thorough segmentation. You should not only make sure that you can bring a relevant story to every individual participant, but also take care that you only target those participants that are relevant for your overall objective (defined in the previous phase). A good definition and segmentation of your target group allows you to: • reduce the overall cost of the motivation program. • focus your resources on the most vital participants. • make your program tangible for all participants. • optimize your communication mix. For each segment, we will define the actual motivational actions. Since the idea is to link a reward to a participants’ behavior/objective, you should make sure this link is clear and the requested behavior/objective is SMART: Specific: Giving clear objectives and a 1-to-1 link to rewards to make sure your participants get a clear view on what they can earn. “Sell 10 items of our new product and get reward X”. Measurable: A specific objective is meaningless if you cannot measure its value for each individual participant. If you do not have the individual sales volumes on a regular basis, do not use them in your program. Achievable: A carrot that is miles away is not worth the effort. Relevant: To your bottom line as well as to the participants day to day job. Timely: Not only should you try to make the time between the effort and the reward limited, you should also clearly communicate on the timeframe to get to an objective. “Get 3 new customers during the Christmas holiday and get one Christmas tree”. Regular pitfalls: • Making no segmentation. • Building a segmentation based on company variables instead of participants variables. • Complicate action definition. • Continuously changing action definition. • Too much actions running at the same time. Deliverables: • Participant segmentation. • Action definition. o Define participants (individual) objectives. o Award definition. 8
  • 10. Phase 3: Communication Plan In this phase of the program development, we build a communication plan that will allow us to translate the program strategy to the participants who will eventually be in the program and have to do the work. Even the best designed program will fail completely if nobody knows it exists and is not excited about it. As for traditional marketing communication, you will want to make the message as personal and relevant for each individual participant without making your communication effort too big. Since you already have a segmented audience, you should be able to swiftly apply a communication strategy based on these segments. Plan your communication mix upfront, clearly defining: • Your message. • Specific targets. • The communication channel. • The timing and frequency. Since you probably have already various communication tools available, make sure to integrate the communication for the loyalty program into the global communication plan. When you communicate with your participants, you might as well capture their feedback. Try to create a dialog. Maybe it turns out that the objectives you put forward for years are not working with your sales force. Regular pitfalls: • Forget this phase. • Not integrating the loyalty communication into the overall communication. • Make communication not linked to action. • Not using the added value of this communication to capture feedback. Deliverables: • Communication plan. 9
  • 11. Phase 4: Feedback loop You should take the time to measure the impact of your program. Defining upfront your KPIs enables you to clearly calculate and communicate the Return on Investment of your program. Feedback should be captured in both ways: • Top-down: Measure the outcome of your program, define standard KPI’s and adapt your program as necessary. • Bottom-up: Capture the feedback you receive from your participants and use this to challenge your own program objectives. Link the feedback to HR and training & development. If people do not gain their target, maybe they need a specific training. The best developed program is nothing if the execution is not handled correctly (this is also why it is very important to clearly define roles already in the development stage), so make sure you pass on the good vibe when going ‘live’. 10
  • 12. Key Success Factors • Clear program definition: o What do I want to accomplish with the Motivational program? o In what timeframe? o Who do I want to target? Is this target group in line with my overall objective? o Is the budget (both financial as FTE) in line with the program objectives? o Who will be responsible for the program execution? • Define in detail the program tracks: o What reward will I give for which behavior/target. o Can my targets be clearly identified and communicated? o Are these targets linked to the overall objective? o Is there a clear perception for the participants between effort/result and rewards. o Do all the participants have access to the reward solution? • Communicate the program: o Do all participants know of the programs existence? o Do I have enough action entertainment to keep participants interested in checking their status? o Do I also combine rewards with feedback gathering? o Link the appraisal to the rewards (combine extrinsic and intrinsic rewards). • Measure, capture feedback & adapt: o Calculate the ROI of your program. o Capture your participants’ feedback. o Adapt the program or your complete strategy. One last note. Make sure that the rewards are not only focused on hard selling targets, but also on creative tasks. This is highly linked to the objective and program definition, but it is overlooked in many cases. The responsible for reward programs should take into account that even the most sales oriented job descriptions need some kind of creative approach. By focusing solely on pure sales linked rewards, you risk that your employees only focus on the short term gain. Here the link with idea generation, innovation, R&D, HR (on boarding, referrals,…) can be very relevant. Get motivated by motivation your people! 11
  • 13. About Sodexo Web Motivation Center The Sodexo Web Motivation Center is responsible for the online motivational solutions of Sodexo. About Sodexo (www.sodexo.com) Sodexo designs, manages and delivers comprehensive service solutions through On-site Service Solutions and Motivation Solutions. About the author: Filip Modderie is working as International Project Manager for Sodexo’s Web Motivation Center. He loves to hear your feedback. Contact information: Filip.modderie@sodexo.com http://be.linkedin.com/in/modderie @Young_Marketeer 12