We work in an industry where the term ROI is frequently used. The conversation tends to go like this:
- Client – How will I know that the money I’m spending on this incentive program is having the effect I need?
- Supplier – There are many industry studies that prove the correlation between incentive programs and increases in the target activities.
The reality is that an ROI plan should be developed as the first step of any Sales Incentive Program, Employee Recognition Program, Wellness Program, Channel Incentive Program, etc. With the development of a thoughtful ROI plan, you will ensure that objectives are aligned to business needs, participants agree that you are providing a solution that they need and that there is a plan to collect data at critical points in your program.
Getting started with your ROI plan.
According to the ROI Institute, when you develop your program objectives there are five steps to follow:
First, How do you want your participants to react to the program? After they have been exposed to the program, what should your participants be able to accomplish? Understanding what action/reaction you want from participants will help you correctly develop your program activities and structure.
Second, What do you want your participants to learn? After completing the training and/or participating in the program what should your participants know? This step ensures that you offer the correct training, behavioral elements, and program structure. Without this step you are including activities without a direct correlation to your objectives, and eventually to the payback.
Third, After implementing the incentive program, what do you want your participants to accomplish or complete? Different from what you want participants to learn, this identifies how they will use their knowledge and the desired outcomes of those increased skills.
Fourth, What are the consequences (or impacts) when those skills are applied? These impacts go to the heart of your reasons for running the incentive program. Are you looking for a 10% sales increase? Did you want a 20% decrease in the time to complete?
Fifth and Final, What are the ROI objectives? Setting a goal at the beginning of the program will set the standard for the acceptable return on your investment.
Tell us, what are you doing to develop a ROI plan?