In a personal service business like cleaning, growth requires positive word-of-mouth. Reviews and referrals matter. So, when Christopher Willat noticed that morale was slipping in his Denver-based cleaning business, Alpine Maids, he went to work on creating more meaning in his employees' work.

"About a year ago, we shifted culturally and really focused more on what our cleaners do for our clients, and how we're giving back and helping our customers," he says. In addition to better performance overall, Willat says that employee participation in the company's incentive program "took off," too. 

Alpine's 24 employees are awarded points for the quality of their work, attendance, and other performance-based measures. They can trade those points for merchandise rewards, gift cards, paid time off, and other incentives. The alignment of culture and recognition truly motivated his employees, who were excited about the difference they were making.

Powering performance and culture

Research backs up Willat's experience. A 2018 survey by the Society of Human Resource Management (SHRM) and Workhuman found that human resources (HR) professionals turn to employee recognition for help with organizational culture (85 percent), employee engagement (84 percent), and employee relationships. Eighty-four percent of U.S. businesses use non-cash rewards to recognize and incentivize key audiences, according to a recent report from the Incentive Federation, Inc. 

Companies clearly realize the power that incentive programs hold, but for them to be most effective, they also need to be targeted and adapt to audience demands, says Eve Kolakowski, President of Rymax, a loyalty marketing and incentives provider. Demographic shifts, style trends, and even communication preferences are influencing how incentive programs are developed and used. 

Another recent shift that Kolakowski sees is more companies using incentive programs in the recruitment process to attract new employees because of the current low unemployment rate and sound economy. "If you're not a huge established brand, like an Amazon, it's important to give something extra, on top of the expectation of benefits, salary, and time off. This would be an added value you're offering to the employee."

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Internally, the SHRM/Workhuman survey found that programs are most effective when they're tied to company values. Customer-facing programs can also be used to motivate purchases or other behavior. Programs should be aligned with your brand and reinforce key messaging, says Warren H. Kohn, founder and CEO of Herald PR, a New York City public relations agency. "Having incentive programs allows those who want to be entrepreneurial take initiative within the company to go above and beyond--to get new clients, to network, to go to events," he says. Ensure that you have criteria that allows everyone to participate--not just the "rainmakers." 

Structure and substance

Incentive program format and content have changed in other important ways, too, Kolakowski says. Program communication and offerings all need to be tailored to the audience. Employees or customers may want luxury "splurges" like a Michael Kors handbag or Gucci sunglasses. Alternatively, they may prefer iconic brands known for their quality, such as Callaway golf clubs or Baccarat crystal. Electronics options, like Apple laptops or Canon cameras, are perennial favorites. Rymax offers an impressive, diverse portfolio of more than 400 brands and 15,000 reward options. 

Kolakowski says audience members typically want items they wouldn't purchase for themselves. The good news is that luxury brands have made a strong entry into the incentives market in recent years, as they look for new market opportunities that don't compete with their retail customers. And these brands are influenced by style and taste trends. Gone are men's and women's  categories--today's popular incentive rewards are gender-fluid and timeless. In addition, audiences want flexible options that deliver convenient online access, fast shipping, ratings systems, and even the ability to use a combination of split-pay options--such as part points, part cash, or credit--with flexible payment methods like Apple or Venmo. 

To design your program optimally, seek feedback from your audience, and also look at demographic characteristics. With immediate communication and gratification so important to many in the population, having a dynamic recognition program is critical. In response, Rymax offers its MaxSiteTM platform, an online incentive program hub which can be customized based on industry, size, pricing preferences, or other factors. Participants log in and can see a product live feed. The feature-rich platform offers the immediacy that many audience members prefer. 

By integrating coveted brands, technology, immediacy, and values alignment, SMBs can boost the effectiveness of their incentive programs. And that added impact may help them better compete against their larger counterparts.