Client Development – Reward the Behavior You Seek
September 28, 2009 by Sally E Smith · Leave a Comment
“The best way to neutralize a competitor’s heartbeat is to change the rules of play.” – General George Patton
What client behavior are you currently rewarding, and is it the one you want? If you are considering a client incentives for your business remember a new program should not be add-ons to existing ones. The best programs are a change in core strategy and must become central to other business functions.
Before you begin a program, it is important to gather client data to make intelligent decisions and have a base line to measure the success of your new incentive program. By differentiating your offers to different clients, profits can be maximized. Don’t try to be all things to all people. There are various methods to use as incentives to reward the behavior of your client with pros and cons to each.
Various incentive methods include:
Price: Pricing can take on new meaning when you no longer have “one price fits all.” Considerations for pricing include the cost structure of client categories and segments. Reward structure is focused on individual products and is an indirect way to change client behavior. Disadvantag – May miss your strategy for client development.
Purchases: Rewarding purchases is a true reward to behavior. This is one of the most common incentive programs used by businesses to give an advantage to regular, high spending clients. It encourages others to become regular clients. Details of such programs include percentage off your next purchase (puts the client in control of the reward), and rewards that build as the relationship lengthens and/or volume increases. Disadvantage – Can be costly.
Points: Incentives using points are flexible, versatile, and simple to administer. Advantages include ease of targeting select client groups, transaction size to incent, can be limited time periods, avoids price wars, defection prevention and differentiation in marketplace among competitors. Disadvantages – Slow to start, delayed gratification of client and the points are a liability and must be handled correctly on the business’ financials.
Partners: Rewards are activated at a number of businesses and strategic alliances. These programs can be simple or complicated. Disadvantages – Non compatible computer systems between businesses in the program and all businesses maintaining the quality of the program and the center of marketing efforts.
Prizes: Easiest of programs to facilitate. The costs are clearly identified in the beginning of the program and can be measured to the outcome goals. Prizes have been and are still very common and used at all levels of sales. Disadvantages – State regulation, laws and requirements.
Pro Bono: This type of incentive is very sensitive to administer. It does allow clients to choose their charitable cause that makes it attractive to a small segment of the market. Disadvantage – It seldom influences the behavior of clients to buy.
Privileges – Clients enjoy receiving something exclusive because of their intrinsic worth. Surprise privileges work triggered by a special milestone, gift certificate as a thank you, remembrance on holidays/anniversaries or as simple as an infinite group or designation. Verizon, American Express, AAA are just a few of the examples of successful use of privileges. Disadvantage – must not be rewarded arbitrarily but consistent with the rules.
Personalization: This incentive requires more complex tracking by collecting specific client information at time of purchase. Building CRM and CIF systems for internal use is not a new idea but continues to be one of the most important functions a business can undertake and make accessible for staff to differentiate the business in the future as well as maximize performance potential. This allows for real time management of client relationships by everyone on the time. Disadvantage – Giving the client a feeling that you want to know too much about them and fear of breach of confidentiality.
Participation: Incents the client to become involved in improving operations of the business. Adding clients to advisory boards, and asking them to decide on new products or services and hours of business is truly progressive thinking. Disadvantage – Not doing what the client suggests after you ask them for the time, talent and opinion.
No matter what you decide to do with incentives, it is important to stay in tune with your client to understand what they value and the trends that will affect their lives and in turn your business relationship with your client and the products and services needed to keep that relationship.
Mentoring – A Two Way Process
September 11, 2009 by Sally E Smith · Leave a Comment
In business, mentoring occurs when a more experienced individual gives assistance to a less experienced individual. In the past, mentoring has often been perceived as a one-way street, with the mentor giving and the mentee receiving. In today’s business environments, mentoring is viewed as a partnership, with both the mentee and mentor contributing to the process.
Working together, a mutual respect and trust develops and significant results are the by-products of a healthy and successful match. The mentor may still have a larger experience base and broader knowledge of business but the relationship grows by sharing rather than one giving and the other receiving.
You have heard the saying that running a business can be lonely. It can also be dangerous. Owners get so used to doing everything in the business and making all the decisions that they lose sight of the need to continue to grow professionally, develop new talent appropriate for the stage of their business life cycle, and get out of the box that is always being built around thoughts, patterns and behaviors.
Types of mentoring vary and can take on many forms:
One-on-one: The mentor requires the mentee to set their own goals. Regularly scheduled meetings allow for follow-up and accountability. This allows mentors to help develop the mentee and over time the mentee and mentor will become a peer relationship.
Sponsor: A business owner identifies a staff member with potential. The owner places that person in new and challenging positions to see how they will perform and grow. This works well for all parties. The business is growing their human asset resource into a more productive valuable member and the staff member has an opportunity to advance and develop more skills and knowledge.
Role Model: Role models are selected by the mentee. Role models are selected for their qualities, skills, successes, experiences, for a number of reasons but basically for attributes that can be studies over a period of time to see exactly how the mentee wants to develop and what they want to accomplish. The role model is watched all the time and must remember to behave in a positive way to influence others.
Group: This is probably the most popular method used today by business owners. In a group setting, peers share their challenges with each other and the group becomes a peer mentoring experience by sharing their experiences, knowledge and thoughts regarding the challenges presented. The topics and make-up of the group can vary and are determined by the group and/or organizer. The facilitator can be a specialist on the needs and expectations of the group.