Targets are a typical “weapon” in the B2B incentive and reward program design armoury. But just like the saying “don’t bring a knife to a gunfight”… there are different models to achieve different outcomes.
Before you head in and go straight to the classic and frequently used – last year’s sales +10%, there are other factors to consider. Target setting can help elevate a rewards program even further. Avoid a target model that overlooks additional opportunities for growth or disengages certain customers as the incremental growth on target is simply not achievable.
When reviewing target models, there are several standard models that can be used as a first-round strategy review. The time to use these can depend on sales data, customer knowledge or even platform functionality. The targets we see implemented most often are:
• GTD (Growth Target Dollars)
• SDT (Self Determined Targets)
• SPT (Status Points Targets)
• OVT (Opportunity Value Targets)
One of the biggest challenges of choosing the right weapon is balancing the objectives of the program owner with connection to the target audience.
Models like growth targets are simple to understand but they can miss the mark on maximising growth opportunity across your customer base. They can lead to buying cycles that can cause a drop in certain customer volume and spend every second year.
Self-determined targets require a platform with functionality to cater for them. Plus a target communication plan to drive a customer towards achieving their desired reward goals.
Status points targets can provide a cost-effective way to drive a behaviour change, as the target is for emotional value and extra benefits. However, they need to connect with the majority of the customer database.
Opportunity value models need a depth of data and insights, and often require the involvement of others inside your business such as, sales teams. However, this is also where inaccurate assessments can emerge.
Whichever target model suits the program design and desired outcomes, there is no doubt they are a powerful tool In B2B rewards and Incentive programs. The challenge is choosing the right one so that outcomes solve a business’s pain point and customer engagement is achieved.