1. Begin With the End in Mind
Banks and credit unions must first ask, “What are the results we are trying to drive by implementing an incentive plan?” Answers like “increase sales” and “drive production” are fine goals, but what do they look like? What sales are you trying to increase? It is important to be specific. A successful incentive plan will limit its ambitions to a single product or two where you’re really trying to move the needle.
Once you have an idea on which product(s) will be central to the incentive plan, how will you define success? How will you know if you were successful? You must define the metrics by which the program will be judged. An example could be a specific number of retail and business checking accounts opening per branch per week. Another might be a 10% increase in the bill pay usage rate.
A clearly defined goal will assist in creating the plan to get there as well as make it easier to communicate to your team. Once you have determined your goal, go one step further and establish you “stretch goal” as well. This will ensure that if the team hits the original goal too soon, the program will not simply end; you’ll have a backup plan to keep engagement up.
2. Engage Employees from the Start
All too often we assume we know what people want — we project our own personal feelings and preferences on others. It is human nature to think, “This would motivate me, so it should work for them.” Wrong. To truly design the best strategy, it helps to collaborate with employees collaborating. What better way to motivate and engage employees than getting them to participate in the design and construction of your institution’s rewards program? Here’s how you can do it:
- 1Form an employee incentive panel. Gather a mix of employees — tellers, service reps, branch managers, back office administration, loan processors and loan officers.
- Tell them they will be helping design the incentive program.
- Provide some food and beverages for the meeting. Providing coffee and donuts in the morning or lunch in the afternoon is a great thank you and helps set the stage for good things to come.
- Ask them to help set some realistic sales goals for teams and for individuals.
- Ask them what they would like the to have considered as grand prizes for the winning team and the winning individual.
- Ask them ways they think are best to communicate the new plan.
After the meeting, encourage committee members to go to their work stations and share the information from the group. Have them collect others’ input and report back to the committee chair on their findings. This ensures all employees are onboard and aware of the new reward program from the beginning.
3. Have a Highly Visible Approach
Everyone must know about the initiative and their role in achieving the goals. The start must be a highly visible affair with some type of official kick off. Ideas like a “countdown to kick off” or a branch-wide event serve as a reminder that the program has officially begun.
It is important that C-level executives are involved with the kick off — this is crucial. Employees need to see that the management team is fully behind this initiative and wants to support it. A great (and inexpensive) way of communicating this is to do a quick video of your President and/or CEO telling everyone about the initiative and sharing how he or she is committed to its success. That video can then be shared with employees via email or your institution’s intranet.
After the initial launch, the excitement will begin to fade. There is a natural momentum to these types of initiatives. This is why it is absolutely critical to put a consistent marketing plan in place before the launch. Having a “goal board” in the break room or another employee-only area ensures people will come into contact with the strategy every day, and it reminds team members about what they are working toward. Weekly or even daily email updates also serve as a constant reminder as to the overall goal. Make sure to have some type of visual cue, such as a grand prize display accessible to all team members.
4. Inspect What You Expect
The only way to truly measure the success of any initiative is to regularly monitor progress. This can be done in a variety of ways and does not need to include any expensive software or programing. A simple weekly tally from all of your branches can be added up to the “master board” at headquarters. Not hitting your numbers for the week? Why? Sit down and discuss with your team. Or the opposite might be true and your team is killing it. Take a moment to say, “Job well done,” and keep them on the path to success!
It is much easier to spot a potential problem on a weekly basis as opposed to trying to up the difference later on in the program.
5. Always Consider Experiences over Things
We have goals in place and employees are engaged in the process; now we need to tell people what’s at stake. The knee-jerk reward is always cash. While money can be a motivator, it fails to capture the imagination of the participants and too often becomes part of the employee’s salary versus serving as an event in his or her life. If employees are taught that they get cash every time they sell a particular product or service, they’ll see it as a pay reduction when you take the cash away. In addition, our experience has taught us that cash incentives commonly lead to “cheating.” This isn’t to say that employees are dishonest; it just seems to lead to a higher take rate with less usage.
6. Assure that Everyone Wins When the Team Succeeds
Emphasizing a shared experience puts the responsibility to succeed on the group rather than the individual. Team incentives versus individual incentives are more powerful and produce better results. For example, if we were to give you a $100 bill today and ask you how you spent it six months from now, you would be hard pressed to answer. But, if you offered the opportunity for employees to get their car washed by the executive management team, that’s something employees would probably remember and talk about six months later. Sometimes experiences are worth more than money. Other experiences you could consider offering employees might include a happy hour after work, a catered lunch from a local restaurant (perhaps a Mexican themed lunch with a mariachi band), or a Saturday outing to a park for a BBQ lunch cooked by senior executives. Get creative. Don’t fall back on cash as a crutch.
7. Consider a Specific Incentive for your Team Leaders
When initiating an incentive strategy, your leaders should be rewarded for achieving team goals. Great leaders produce results! If your initiative is branch-based, then your branch managers should have the opportunity to benefit from the success of their teams. If it is an organization-wide initiative, then focus on your department leaders. In this instance, a monetary reward may be appropriate. Other options include additional paid time off or a weekend get-away. Research consistently shows that a caring and dedicated manager will lead a team to even greater results. You should incent this behavior.
8. Evaluate Program Duration
A common mistake that financial institutions make is the duration of the incentive program. All too often they design a 12-18 month program in the hopes to keep the employees engaged for a longer period of time. There are several flaws in this logic:
- The program’s total goal becomes too big. Team members will see a huge number to reach and simply say it’s not possible.
- People do not think that far out. In today’s instant gratification world, people simply lack the long-term vision and will become bored with the initiative.
- The initiative will lose its “newness.” If the program drags on too long, no amount of marketing will revive people’s interest. Studies show that the optimal duration for these types of initiatives is three to six months. This will allow the participants to focus on attainable goals while still remaining engaged in the process. As previously noted, there are very few one-size-fits-all approaches to incentive programs. But with these key points, you can ensure success at any level for your next initiative!
Sean Payant is the Senior EVP, and Jeff Eells is an account executive at Haberfeld Associates, a leading new customer acquisition marketing and profitability consultant in the country. Haberfeld provides consulting, marketing and training services for community financial institutions and gains its unique data and benchmarks through analyses of millions of consumer banking records at community banks across the country.