This month’s return on investment series piece is dedicated to the discussion of online incentive program ROI. When it comes to calculating the returns possible from an online incentive program, it is of primary importance that administrators define the goals of the award program and establish benchmarks upfront. From this point, the incentive program should be closely monitored at regular intervals depending on the length of the award program. These best practices will allow an organization to best determine the return on investment they receive.
A recent study produced by The Society of Incentive & Travel Executives (SITE) Foundation as reported byThe Incentive Marketing Association, provides statistics on the impact of merchandise-based, online incentive programs. The study claims that incentive programs can provide companies with up to a 22% return on investment when targeted at individual performance improvement and a 45% return on investment when targeted at team-based performance improvement.
These staggering figures are possible with incentive programs when program administrators monitor the incentive program progress and also tie the goals of the organization with the objectives of the incentive program. Online incentive programs are especially able to drive high returns because of their low investment requirements when compared to their paper-based counterparts. Incentive program websites serve as a central hub of communication between the organization and program participants. Emails and eCards can be sent to participants at no cost and serve as updates and invitations to log into the incentive program website. The only costs associated with completely online incentive programs is any set up or initial programming fees and the cost of merchandise ordered by participants over time.
Calculating the return on investment from online incentive programs is often easier than calculating the ROI of paper-based or hybrid incentive programs because of the ability of online reporting. For most of my clients with online incentive programs, reporting is done on a monthly basis to determine a variety of factors. Many clients want to know what groups are receiving points and what groups are not receiving points on a regular basis. In addition, many of my clients want to determine if points are being saved or spent. These factors allow administrators to learn how active managers of particular groups are in recognizing and rewarding their employees and also administrators can learn how points are being used so that future employee incentive program budgets can be planned.
Online incentive programs are strategic tools that can be used by companies to improve the overall performance of the organization. With such high return on investment opportunities and easy monitoring capabilities, online incentive programs make up the majority of my most popular and successful programs as an Account Manager.
Be sure to check back next month on February 8th, when I will cover the return on investment possibilities of paper based incentive programs.
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