Moving Offline Programs Online
For example, a direct marketing company with a sales force of 10,000 members that has been supplementing its commission plan with a noncash incentive for several years began to notice that reaching goals was becoming inconsistent. There was no doubt, after an in-depth analysis of its total compensation plan, that it was doing the right thing. But it was also apparent that the program needed to be administered more effectively.
Specific challenges were determined:
• Increasing costs of promotional communications.
• Increasing timelines to produce promotional communications, causing delays in implementing new sales plans.
• Delays in collecting sales information, both to adjust sales plans as well as to report sales results back to the field (two to three months in most cases).
These challenges were undermining management's ability to influence sales force productivity. Management knew what needed to be changed but was unsure there was a way to do it.
It was then that conversion of its program to an online solution became the obvious answer -- if its updated objectives and strategies could be met. Those objectives and strategies included:
• Reduce sales reporting from two to three months, to less than one month.
• Reduce award fulfillment from two to three months, to less than two weeks.
• Reduce promotional communication costs, including printing and mailing.
• Increase flexibility of monthly programs to reflect seasonal sales goals and product promotions.
• Introduce the ability to create timely regional and national programs.
• Maintain accurate records for both monthly and annual sales programs.
• Change the noncash award offerings in the online catalog monthly.
• Increase the productivity of the sales force.
• Reach sales goals consistently.
The new challenge became the conversion process from offline to online. There was a need to determine a base line of understanding and acceptance by the sales force in regard to computer technology and Internet access. Then a starting point could be established and conversion could begin. Additionally, the challenge of ensuring that all 10,000 program participants had computers and online capabilities, without incurring a huge cost, must be overcome.
It was determined that about three-quarters of its sales force owned computers and were online. The rest expressed a strong interest in using the online system. To simplify the transition, desktop and laptop computers were added to the awards catalog immediately. Points to earn a computer could take place during the online program transition period, approximately eight weeks. This solution helped reduce the number of offline participants who would need to transition after the online program launched.
Additionally, now that there was a commitment to take the program to an online solution, other program capabilities that would further enhance the ability to drive sales performance could be introduced. Those capabilities included:
• Sales administrators could develop, announce and manage program changes and sales "spiffs" within hours.
• Local sales managers could develop, track and administer programs, specific to their geographic responsibilities, quickly and easily.
• Both participants and managers could track the status of performance online.
The program has been converted and in full operation for a little less than a year, and the results have been dramatic. Development and implementation of programs now take weeks, not months. Performance reporting has been reduced from 60 to 90 days, to less than 14 days.
After online system development costs, the company still will save more than $100,000 a year in program communication costs. Most importantly, sales performance is getting more consistent as the sales force transitions totally online, and as parameters of the program and how points are earned are adjusted.
• Dennis Borst is managing director at perks.com, Los Angeles, which helps organizations manage incentive and loyalty marketing programs. Reach him at firstname.lastname@example.org.