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The Gift Card That Keeps Giving
February 25, 2008
Motivate your team without decimating your bottom line
By Mike McCue
Sometimes, there's just nothing like good ol' instant gratification. In many ways, it's the easiest and best way to positively reinforce the behaviors you want your sales team to perform, making gift cards a key tool in any sales manager's motivation and incentives arsenal.
But used properly, gift cards can play a role in longer-term incentive plans as well, not to mention delivering a personal touch that goes a long way with many employees. Manish Shrivastava, president of Home Depot Incentives, a subsidiary of Home Depot, recently spent some time with Sales & Marketing Management to discuss successful strategies and the latest developments in the gift card segment.
"Sales managers are very busy because they're usually working on the front lines, so easy solutions that provide fast results are especially useful to them," Shrivastava says. "When you can reward someone with a gift card right there during the sales meeting, the whole team claps and cheers … It's an exciting experience that people remember long after the meeting is over."
S&MM: What are the most significant developments affecting the gift card incentive industry today?
MS: Well, we're going through a rough patch right now as far as the nation's economy goes, so sales managers are looking for ways to incentivize and motivate their teams in ways that don't necessarily break the bank. Gift cards are an especially effective motivational tool in this environment because they come in all denominations, don't take much time to procure and, unlike longer-term programs, they provide an instant return on the investment.
S&MM: What are some of the greatest advantages to using gift cards in an incentives plan?
MS: The first advantage is the personal touch it allows a sales manager to demonstrate. The number of companies that offer gift cards grows every day, providing them with an almost endless pool of products and services to choose from. If you know that one of your team members is an avid golfer or has a sweet tooth, rewarding that person with a gift card to a pro shop or gourmet food company shows that you listen and are interested in them as individuals, not just revenue-producing workers.
Flexibility is another of the gift card's biggest advantages, of course. They don't necessarily require a lot of planning and are available in just about any amount you might want. But they can be highly effective in longer-term plans as well, especially as part of a portfolio offering, in which the team members can choose their reward from a number of different companies. For example, many people have a strong emotional attachment to their homes, so helping them improve the place they live can be a powerful incentive. Remodeling a kitchen or building a deck isn't something you do overnight, so people are already committed to achieving those goals over the long term. In addition, home improvement offers the dual advantage of upgrading living conditions today while adding future value to the property down the line.
S&MM: Are there any disadvantages or situations in which gift cards might not be the best choice?
MS: Sales managers should be careful about selecting gift cards if they can't give their teams a few choices, especially in longer-term incentive programs. For example, Home Depot cards are effective because everyone needs to buy household cleaners, basic tools and a host of other products that we sell. But as a large, long-term incentive, a Home Depot card might not be as motivating to someone who's renting as it would to a homeowner. The other area that calls for some caution is when a sales manager is changing a specific reward that has been in place for a long time. If your salesperson of the year always got a free trip to the Bahamas, replacing that exotic trip with a gift card—even if it is loaded with a high dollar amount—might be great for some people, but disappointing to others.
That's why choice is so important to an incentive plan. A poll of managers at incentive companies on the Incentive Web site, Sales & Marketing Management's sister publication, shows that the top three choices of reward are gift cards, luxury watches and luxury leather items. The goal is to pique the particular interest of as many individuals on your sales team as possible.
S&MM: Any other tips for managers who are looking to get the most from their sales teams?
MS: We have our own incentive program at Home Depot, of course, and we've experienced a lot of success when we tie the individual's reward to team goals. We want to keep everyone motivated throughout the year, so the grand prize winner only gets the reward if the overall team meets its objectives. That way, everyone has a piece of the action. In the short term, if the individual doesn't get the reward because the team didn't meet its goals, there can be some disappointment. That's happened to us before. But in the long term, it offers a great learning experience. No one wants to be the reason someone didn't get a reward, so people stay focused on doing their part, even if they aren't in the running for the grand prize.
At the end of the day, we don't fail or succeed as individuals but as a team, so we've incorporated that philosophy into our sales culture. It's paid tremendous dividends for us.
Sales & Marketing Management Magazine
This article is brought to you by Sales & Marketing Management, the leading authority for executives in the sales and marketing field.
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