Incentive Programs
Modern solutions for modern problems
The Challenge
When the initial incentive program was conceived, it was brilliant! It addressed a situation that had no solution and it drove desired behaviors for the organization. The problem was that the program was too successful. The demand for this program grew so quickly that it got to a point where everyone wanted to be on the program. The program expanded rapidly from a small team of ten people to every single sales team in the organization; growing from 10 users to over 1,000 users in a matter of months.
In order to support this larger audience, the criteria were modified to cater to the different products that each team was responsible for selling and then modified again to tackle multiple reward criteria based on the products, roles and locations of each team. As the criteria got more complex, the one-page criteria expanded into a 15-page document with repeated sections and unclear wording. This did not go well.
As the business and customers changed so did the products offered. But this incentive program, and the technology that complimented it, did not change. This caused a number of issues:
The processing time for verification of all the sales increased
The time to calculate incentive rewards time increased
The error rate increased
The ability of the team to respond to queries was drastically decreased
The result of all these issues led to low confidence in the program and this was reflected in the morale of the sales team, which had a direct impact on the bottom line of the company.
There was clearly a lot at stake here, and a lot to be gained from solving this problem. The results were as follows:
The Value
-
As the company evolved, so did its products and services. The company (a bank) began to sell more home financing options, which lent themselves to more profits for the bank, but the sales behaviors were still focused on the smaller consumer loans that did not provide as high a yield as the home financing.
By updating the criteria to align with the company’s objectives, the sales teams were more incentivized to take on the more challenging, higher-yield products, and be appropriately rewarded for their efforts.
Updating the criteria, and speed for processing, also allowed further performance metrics to be incorporated. We were able to provide extra bonuses for members who were very responsive to customer applications and got them through the door within the Service Level Agreement (SLA).
-
The old process took over three weeks to complete. Any inquiry would require going through the entire process just to address a single question. The old process was very manual and labor intensive, and so, prone to errors. End users would get frustrated with the lack of transparency and responsiveness which would lead to significant complaints per month.
The new process runs in twenty minutes. It can be run every single morning when the back-end data systems refresh. This also meant that we were able to enhance our offerings, in addition to improving debugging capabilities.
-
Provide preliminary statements weeks before the payment deadline. This gave each user the opportunity to review what they were getting credit for, make necessary adjustments or make an inquiry for more information
A two week evaluation period. This gave users the opportunity to make inquiries and allowed time for any issues to be fixed.
Instant responses to inquiries (realistically, responses within the hour). By utilizing new tools and techniques, we could build in debugging capabilities on the fly to address specific inquiries quickly. This gave the user an opportunity to fix any issues from their side, or for the program manager to make updates as needed.
Auditable trails for inquiries and payment processing. There was a heavy paper trail created from this process that was auditable. Should anyone question the process, there was evidence and explanations automatically generated to clarify any issue or decisions made.
Final statements that clearly state what they were getting credit for and their reward earned.
Ability to make adjustments. There were some issues that were out of the user’s control (for example, a client’s legal process holding back a sale, or a sales member being on maternity leave). We still wanted to give them credit for their efforts, so along with the audit trails the executive could approve various adjustments and they could get credit for them on the next possible cycle.
-
This was one of many projects that made a significant impact on driving revenue growth from $100 million to $400 million in four years.
The Solution Features
For the End-User
Updated criteria (originally proposed by the marketing team)
Preliminary statements before payout
A two-week period to raise and address queries
The final statement in time for the payout
Timely and accurate payouts
For the Analyst
No-code platform to facilitate knowledge share
Reduced processing time from three weeks down to twenty minutes
Debugging modules to trace every line item
Self-audit system complete with a digital trail
For the Stakeholders
Focused incentive criteria that were aligned with the strategic objective
Improved user adoption of tools provided (led to better data gathering which led to better quality reporting)
Reports and insight on the program’s performance