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.
Leadership Law X – Be the one to turn the lights off at night
August 20, 2009 by Sally E Smith · Leave a Comment
With a more caring, intrinsic nature, new AGE leaders are keenly aware they are serving their people. Never again will the words “you work for me” be muttered in the halls of business. Walking their talk, demonstrating daily that the business family is no different than a core family, the new AGE leader will remember that they are to be the last float in the parade. Walking out and leaving their people (who are leaders of their families) to work late will not happen. If it is time for the new AGE leader to go home, it is time for everyone else to leave, too.
Leadership Law IX – Build personal goals together with your people
August 10, 2009 by Sally E Smith · Leave a Comment
For a new AGE leader to keep a finger on the pulse of their diverse people, they must know their needs, understand their decisions, and have open and clear two-way communication. Setting personal and professional goals together then incorporating a communication loop, letting each other know what’s expected and when they are on and off target will build a team both satisfying and rewarding.
Posting results of these goals and placing visuals throughout the environment will remind everyone of their mutual dependency in life. The new AGE leader will be able to cite the personal goals of their people because they know they are working toward them together.
Leadership Law VIII – Find ways for your people to stay home
July 19, 2009 by Sally E Smith · Leave a Comment
New AGE leaders can empathize with their people. They are where their people are both in lifestyle, desires and generation. Knowing that the end and the means to the end are important to quality life and results, they will make every attempt to create true virtual offices and cultures, using them to their advantage, financially, intrinsically and from a productivity advantage…a win-win for everyone. The who, what, where, when and why of the past is about what you become along the way, today.
Leadership Law VII – Have a plan…but no expectations
July 8, 2009 by Sally E Smith · Leave a Comment
New AGE leaders of dynamic, changing organizations operate in uncharted territory. The ability to live with the unknown is essential. Allowing employees to innovate and take charge requires a leap of faith. Diversity tests the new AGE leader’s ability further. Leading groups of people today, made up of individuals from different backgrounds, values, needs, and preferences, presents more questions than answers.
The new AGE leader is able to create new ways to respond to these exciting situations, because they have the inner strength to tolerate the anxiety of not having an immediate answer. They can live in the zone without pushing for premature solutions or answers.
Leadership Law VI – Be partners, friends and confidants of your people
June 10, 2009 by Sally E Smith · Leave a Comment
Keeping business separate from home life is old mentality. More than ever, people are unable to separate the two. The new AGE leader will prepare themselves and their managers to manage new information and needs of their people. And, they will start by understanding their own needs, for without that understanding they will not be able to help.
Leadership Law V – Do the opposite of the emotion you feel
May 20, 2009 by Sally E Smith · Leave a Comment
The new AGE leader knows that if their people are to have the motivation and esteem to perform at high levels, they need to feel a sense of responsibility and accountability for their work. This means the leader encourages their people to take risks and deal with their outcomes, and make their own decisions. The real test of both responsibility and accountability comes when things don’t work out as planned.
It is at these times that the new AGE leader demonstrates the ability to allow team members to grow and learn from the situation. By not doing what the leader emotionally feels compelled to do and what has historically been done in organizations for decades, the new leader can begin to nurture a new confidence and trust in their people. When their people try and fail, the leader will response with “I am proud of you for trying.”
Leadership Law IV – Recycle the retiree
May 9, 2009 by Sally E Smith · Leave a Comment
Bored from early retirement or just plain bored from a career with the same employer, the new retirees are a different cat. The new AGE leader realizes the opportunity to balance their style with the wisdom of AGE and the retiree who has been there – done that. On the other hand, the retiree staff member requires little . . . little benefits, fewer hours, and in return wants to explore and learn new things. Because they have been there, done that, they are motivated by simpler rewards and create a rich blend with the rest of the people in the business. Everyone wins.
Team Incentives and Pay
April 19, 2009 by Sally E Smith · Leave a Comment
There are no lack of books written on rewarding staff with bonuses and incentives. Sometimes they work and sometimes they don’t. When they don’t work, the leader typically decides it was a poor idea and quickly returns to his comfort zone of “business as usual.”
Typically they fail because the business is focused on the tactics versus the strategy of incentive pay. Leaders are poorly skilled or experienced to focus their attention at the level of strategy – the how and why of the incentive.
The basic strategy of an incentive should be to reward team members toward the behaviors that the business is seeking and needing. Speeding some time thinking about what behavior is currently being rewarded and what behavior do we want to move toward will help a leader develop a more successful program.