Paul Hebert: Calculations and Conversations

Incentive: Strategy

Paul Hebert: Calculations and Conversations
January 06, 2010
Don’t rely on program data alone to determine ROI

By Paul Hebert

The call to measure the ROI of incentive and reward programs has never been louder. With the negative press surrounding excessive corporate bonuses and new age gurus deriding incentives, it has became imperative to prove the value of your incentive program. And I agree.

Incentives and reward programs must generate a positive return. That’s just smart business. However, in our quest for quantitative proof that a program drives incremental sales, or increases customer satisfaction, or positively impacts whatever metric you want, we are left with another problem: lack of context.

I once surveyed sales managers to test the effectiveness of an incentive program. One of the questions on the survey asked whether the program influenced participants to sell more. The data said no. If I had left it there, I would have had concluded that the sponsor should stop its incentive programs because they don’t influence behavior. However, in one-on-one follow-up interviews with a sample of the program participants, I included this question: “Did you look at the standings that came out every two weeks and showed where you ranked in the program?”

The answer, to paraphrase, was resounding. One person answered, "Heck yeah. I wanted to make sure we were in one of the top three spots every reporting period. I also wanted to make sure I was ahead of Bob.” Conclusion: The program did affect behavior, even though the post-program survey results (the data) said it didn’t. While some may argue that the answer to the survey question is a form of qualitative data, the point is the same: Don’t rely solely on the numbers.

There is an oft-quoted saw in life: “Figures lie and liars figure.” It is no different in the incentive and reward space; depending on the program and the goal, smart math whizzes can make the program look either good or bad depending on their agenda. What numbers need is context. And context can only come from conversation.

Take the Time to Talk
The true value for clients and what should be offered by incentive providers is interpretation of the numbers. Any self-respecting incentive tracking system can spit out the numbers and report back on the units sold, the dollars collected, the customers contacted. The real value is the analysis of those numbers, putting those numbers into a story.

Relying solely on data to make important business decisions is akin to marrying someone based on height, weight, hair color, eye color, income, etc. While you could make some deductions from those statistics, you can’t make good decisions without putting all that data into context, which means you need to spend time with a person before deciding to get married.

To really understand your programs, make qualitative data a part of your analysis plan. Insist on putting the data into context and get a more complete picture of your program. Plan for interviews.

1. Before You Plan Your Next Program
Probably the most important conversation to have with your participants is the one that follows a prior program and precedes the program you're planning. Make sure program participants debrief you about the last program before you start your program. Nothing is worse than perpetuating bad program design.

2. After You Launch
Make sure you connect with the audience after your program launch. Do participants understand the program? Do they understand its rules? Is there anything that could be done to better explain the program? While many companies do surveys to grab this information, having a conversation about them with participants will give your “yes/no” answers context you can’t get from a survey.

3. During the Program
Depending on the length of your program, try to touch base at least twice with a representative sample of participants to gather feedback on the program. Compare that to the survey data you’re receiving. See if there is a different interpretation of the data after some qualitative input.

4. At The End of the Program
See step 1.

Talk to people. It’s revolutionary, isn’t it? As a salesperson said to me once, “It’s amazing how much more successful you can be when you actually talk to clients.” The same holds true for incentive programs.

Paul Hebert is managing director at i2i, an incentive design consultancy, www.i2i-align.com. Over the past 20-plus years, he has worked with Fortune 100 clients to develop non-cash reward and recognition strategies within overall engagement plans.

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