This document discusses how companies spend over $1 trillion annually on incentives to influence behaviors across employees, partners, and customers. It notes that humans are naturally irrational and incentives are used to motivate behaviors. It promotes the Apttus Incentives solution, which allows companies to align incentive programs for sales compensation, rebates, and promotions across all sales channels through a centralized command center. This helps drive winning multi-channel behaviors and simplify incentives for reliability while ensuring compliance.
8. One Trillion Dollars
U.S. Companies Alone Spend More Than
Each Year on Incentives to Influence Behaviors
– Four Times More Than All Money Spent on Advertising in the U.S. Annually –
($1,000,000,000,000 usd)
9. Incentive Programs Across the Organization
Customer Promotions Sales Compensation
Partner Rebates Legacy Programs
Buy 1
Widget & 1
Gadget, get
1 Gizmo
Free
Sell High
Margin
Widgets
Maximize
Revenue
$500 Rebate
for Every
1,000 Units
11. Apttus Incentives is the only incentives solution that
aligns behaviors across all sales channels via
Incentive Compensation, Rebates and Promotions
Management
o Unified command center to centralize and
coordinate incentives across all sales
channels
o Create incentive programs that defuse
channel conflict and enable synchronized
incentive programs
Drive Winning Multi-Channel Behaviors with Apttus Incentives
$800B - sales comp
https://hbr.org/2012/07/motivating-salespeople-what-really-works
$40B - rebates - pharma alone
http://www.zsassociates.com/publications/whitepapers/zs-interview-with-billions-of-dollars-at-stake-pharmaceutical-companies-reassess-contract-operations.aspx
Media advertising spending in the United States from 2011 to 2018 (in billion U.S. dollars)
http://www.statista.com/statistics/272314/advertising-spending-in-the-us/
Average CPG company allocates 14% of its total revenue to trade promotion activities
(AMR Research, Trade Promotions: Are You Getting What You Pay For (2009)? via L.E.K. “Four Steps to Optimizing Trade Promotion Effectiveness” report)
Who are the people managing….
Apttus Incentives is the only incentives solution that aligns and drives behaviors across all sales channels via Apttus Compensation for partners and direct sales organizations, Apttus Rebates for partners and customers, and Apttus Promotions for customers.
Only Apttus provides a UNIFIED command center to centralize and coordinate incentives across all sales channels, by offering real-time promotional offers, post-sale partner and customer rebates, and variable sales incentives for sales representatives and selling partners.
In addition, typically sales campaigns are managed in siloes by different lines of business. Apttus is the only solution provider to provide an INTEGRATED set of incentive solutions to seamlessly create incentive programs that defuse any channel conflict and enable synchronized incentive programs to be executed across all selling channels – field & inside sales teams, channel partner sales and direct to customers.
Source:How do we tell truths that might hurt? (1975) - Prof.Dr.Edsger W.Dijkstra http://www.cs.utexas.edu/users/EWD/transcriptions/EWD04xx/EWD498.html
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NOTES:
The challenge for CIO’s is always to reduce complexity both for our departments and for the business without compromising the benefits.
Getting away from Excel Spreadsheet.
With commissions, promotions and rebates in a single system there are no longer separate data silos. Bringing various historical systems into a single solution allows legacy solution to be retired. If tht data is fed from all sales channels then there is a single source of information for those marketing campaigns. Incentives should integrated through to CRM and be available for every channel, be that print, in store, call centre on online.
Another advantage from an IT perspective having a single system is far better than having to deal with data conversions between systems. More importantly reporting almost certainly requires little IT input for ETL (Extract, Translate and Load) and frees up the time to do work on innovation rather than keeping the lights on.
Image Source
https://pixabay.com/en/justice-statue-lady-justice-2060093/
https://pixabay.com/en/users/WilliamCho-1724357/
NOTES
Simplicity of solution should enable a better oversight across organisations.
Multinational companies risk breaking the law in overseas countries through promotional campaigns. In fact those campaigns don’t even need to cross national borders. In the US there are different regulations across state borders for sweepstake promotions.
Internationally the issue gets more serious. Premiums are illegal in Germany. In Islamic countries the possibility of entering a prize draw could be seen as gambling. Even if it doesn’t per se break the law it can have a negative effect on brand in such countries as Malaysia.
At the extreme end one may need to consider whether a promotion could be seen as Bribery or an incentive
Cross border campaigns can fall foul of legislation even within the EU or the US. Oversight enables consistency of approach across EU countries. This is especially important when dealing with partner programs as inconsistency across EU lead to issues.
Even if the law isn’t broken companies need to be aware of culture mores when creating international campaigns.
With a single source of promotions and incentives and their data held within the cloud it is far easier to validate that campaigns meet both corporate compliance guidelines and international regulation.
The dissemination of information and fairness across partner programs is also importants. In the UK a hardware manufacturer offered a second device free of charge when the first was bought. However not every channel partner was aware of the program, not was it automatically activated and when that happened both vendor and partner received negative publicity.
Risk : No one wants to do a Hoover, or for that matter a Colgate. The ability to forecast the impact of promotions on the bottom line, the combination of programs can have an impact. Just because it seems like a good idea it can be important to forecast possible outcomes rather than expected one
(Tesco’s Banana’s, Domino’s)
Tesco bananas
In 1997, Tesco's offer of 25 clubcard points worth £1.25 for bananas costing £1.17 led one customer to buy nearly 1,000lbs of the fruit. But when Phil Calcott, a physicist, went back to the shop for more staff told him they would not take any more bulk orders. He made a profit of £25.12 on the bananas which he then gave away to passers-by.
Pepsi in the Philippines
Pepsi retracted a promotional offer of 1m pesos to anyone who found a bottletop with the number 349 printed on it in the Philippines, after it emerged that half a million winning bottle tops had been produced. Even after reducing their prize money to $19, Pepsi paid out a total of £13m to customers who thought they were rightful winners and sparked thousands of lawsuits as well as riots and attacks on bottle plants.
Domino's Pizza
Dominos were forced to give away 11,000 free pizzas in the US after someone stumbled upon a trial online promotional code that had been scrapped. News of the code had spread to thousands online before Domino's withdrew the code. Katie Loweth
When a promotion goes wrong nowadays it goes wrong quickly, being able to react fast on social media is critical.
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https://pixabay.com/en/stonehenge-england-united-kingdom-200578/
https://pixabay.com/en/users/Alice_Alphabet-3721/
NOTES
Do you live in the past with an on premise solution or in the cloud where there are many advantages.
Cloud is scalable, expected bursts in traffic can be catered for, even in businesses where the grow requirements are slowly there is always a tipping point that means additional resources are required
Cloud is easier making it to bring together data together
Also brings opportunity to bring partner systems to aggregate into a single point. Rather than wait for single files to be collated by email etc. We don’t want to go back to spreadsheet that may or may not consolidate
The promise of “Evergreen” in cloud applications. The true cloud application is multi tenanted and the software upgraded with additional functionality without impacting customers.
What cloud doesn’t mean is that there should not be re-investment in solutions.
Security : Yes in general cloud solutions are more secure than on-premises solutions but it doesn’t mean that they are secure. Two factor authentification is important and always consider the weakest link. The human and their devices.
It should be possible for partners to see where they stand on hitting their targets as easily as the internal sales people.
Cloud Anytime anyplace anywhere or Anytime Anyhow/Anydevice anywhere
Focused analytics
NOTES
Real time analytics give you the means to fail fast. Discovering whether a promotion is working, or perhaps working too well allows changes one to make changes immediately. A/B testing can help determine which promotion is working better as soon as the data is available. Campaigns can be ceased or reinvested in until they too run out of steam.
This is also not just about the promotion or incentive itself but analytics can also provide information about whether specific channel partners are failing or succeeding. If they are failing perhaps additional support is required, if they are succeeding it may be possible to identify what they are doing to make the promotion/incentive such a success. Having that nformation at ones fingertips is key to turning a marketing campaign into a successful marketing campaign.
It should be possible to understanding in which regions, countries and locations campaigns work and through which channels. Also which promotions work in combinations with others.
Mapping the cost of promotion against each other can also deliver an intriguing insight into the comparative profitability. If one campaign sells 100 items at $100 profit there may be another that sells only 75 but at a $50 dollar profit.