{"id":702,"date":"2021-04-28T11:17:46","date_gmt":"2021-04-28T00:17:46","guid":{"rendered":"https:\/\/new212fprod.wpenginepowered.com\/nz\/make-targets-more-than-a-customer-baseline-in-your-b2b-incentive-program\/"},"modified":"2025-03-11T18:40:29","modified_gmt":"2025-03-11T05:40:29","slug":"targets-b2b-incentive-program","status":"publish","type":"post","link":"https:\/\/212f.com\/nz\/insights\/targets-b2b-incentive-program\/","title":{"rendered":"Make Targets More in B2B Incentive Programs"},"content":{"rendered":"\n

For B2B incentive program<\/a> designers working with changing behaviour, targets are a typical \u201cweapon\u201d in their arsenal. Targets are frequently used to achieve customer ROI or managed to a fixed budget and often pop up in corporate incentive travel<\/a> programs.<\/p>\n\n\n\n

The big challenge working with targets typically comes from setting a fair target that either drives behaviour, or meets your business objectives.<\/p>\n\n\n\n

There\u2019s plenty of evidence in organisational psychology and neuroscience that document the importance of fairness in human beings. An IRF study (Dec 2017)<\/a> states that “fair earning criterion” is a leading participant \u201csatisfaction driver\u201d in incentive programs.<\/p>\n\n\n\n

When reviewing target models, there are generally several standard models we start with:<\/p>\n\n\n\n

\u2022 GTD (Growth Target Dollars)<\/p>\n\n\n\n

\u2022 OVT (Opportunity Value Targets)<\/p>\n\n\n\n

\u2022 SDT (Self Determined Targets)<\/p>\n\n\n\n

\u2022 SPT (Status Points Targets)<\/p>\n\n\n\n

Of course, there are variants, especially when we add a leader-board component. But let\u2019s take a closer look at each of these models.<\/p>\n\n\n\n

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\nBreaking Down Variant Models\n<\/h2>\n\n<\/div>

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Growth Target Dollars ($)<\/strong><\/p>\n

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As simple as it sounds, this is often a percentage growth over a previous period, and in most cases, the last year. The advantage of this method is that it is relatively easy to establish a high-level ROI model. As an example, we have a customer who purchased $ 300,000 the previous year. If we assume that our gross margin is 33%, we know $ 15,000 growth = $5,000 margin. Assuming a $5,000 program cost and we also have a target ROI of 1:2 or 200% (or for every $1 spend we make $2), so our growth percentage target would = 10% or $30,000 growth to make a total target for this customer of $330,000 before they qualify for the reward.1 (See ROI footnote).<\/p>\n

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Opportunity Value (OV) Targets<\/strong><\/p>\n

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OVT can be the most complex method and requires insight into what a customer\u2019s spending power is. We typically find three main ways when establishing these targets. These models become more frequently used as the accuracy in analysing customer data improves.<\/p>\n

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1. Size standardisation and minimum target<\/p>\n

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2. Historical trends and estimates<\/p>\n

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3. Gap analysis (Business Intelligence)<\/p>\n

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(OV) Size Standardisation and minimum target<\/strong><\/p>\n

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It is a standard methodology to estimate the potential purchasing power of a customer.<\/p>\n

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In this method, we classify customers into clusters or groups, such as small, medium or large. I.e. for trade distributor programs such as plumbing.<\/p>\n

<\/p>\n

Here\u2019s an example: a single plumber installs or buys $5,000 worth of materials each month. Therefore, a business employing three plumbers should spend around $15,000 per month or $180,000 every year. Once you know what they\u2019re spending today and the OV, you can set an individual target that realistically aligns with ROI expectations. Many organisations use CRM systems to manage these types of method.<\/p>\n

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(OV) Historical Trend\/Estimates<\/strong><\/p>\n

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CRM and ERP systems are a great source of historical purchase data. They give you an insight into historical trends and a baseline to work with before percentage growth is applied. The downside is that this usually requires getting input from a salesperson, and these salespeople may influence the target to ensure their favourite customers have easy targets. So often, it fails the \u201cfairness test\u201d.<\/p>\n

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(OV) Gap Analysis (Business Intelligence)<\/strong><\/p>\n

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A gap analysis looks at customer groupings to discover what the customer is NOT buying. It creates an opportunity value delta. Even today, many organisations underutilise BI (Business Intelligence) tools to mine data that delivers insights like this. Don\u2019t be surprised to see AI (Artificial Intelligence) also moving into the picture to uncover actionable intelligence in this area.<\/p>\n

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Self-Determined Targets<\/strong><\/p>\n

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Self-determined targets can be one of the most powerful target options you have.<\/p>\n

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This concept is also relatively simple: allow the customer to choose the rewards<\/a> they want, then set that as their target. We often use this in merchandise programs to help the customer specified a redemption target they want, which nudges them towards something meaningful. Thus creating highly engaged participants and gives you a targeted communication strategy to motivate them.<\/p>\n

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Imagine your customer loves to play golf. For them, it\u2019s a no-brainer to set their target as a $2,000 golf set on offer. Your communication keeps them posted on their progress, and sales related activities focus on ideas or suggestions on achieving the reward. When the customer closes on their target, you nudge them towards the next level, whether that\u2019s a golfing experience, club membership, or an even better set of clubs.<\/p>\n

<\/p>\n

Status Points Targets<\/strong><\/p>\n

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Status points targets are very simple but very powerful for two reasons:<\/p>\n

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1. They give you the flexibility to award points for different behaviours<\/p>\n

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2. They don\u2019t come with the burden of actual monetary point values<\/p>\n

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Points can be awarded for acts such as training or product-based actions such as selling more profitable lines. And since you can award status points for actions that don\u2019t have a financial return, you can tailor them around fixed or tiered rewards from an assigned budget. For example, status points (SP) arranged into tiers like this:<\/p>\n

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\u2022 1000 SP = Trip to Gold Coast<\/p>\n

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\u2022 750 SP = Home Theatre System<\/p>\n

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\u2022 500 SP = $500 Visa Gift Card NZ<\/a><\/p>\n

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Regardless of the reward or tier, it all comes from a fixed budget that you control.<\/p>\n

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Read more<\/p>\n\n\n\n\n<\/div>\n\n\t\t

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\n\n\n\t\tCreate a Sales Incentive Target Weapon for Growth & Succ…\t\t<\/h5>\n\t\t
Targets are a typical \u201cweapon\u201d in the B2B incentive and reward…<\/div>\n\t<\/div>\n<\/div>\n<\/a>\t\t\t <\/div>\n\t\t\t\t\t\t\t\t\t\t\t
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\n\n\n\t\tCultural Immersion: Unique Travel Experiences for Incredible…\t\t<\/h5>\n\t\t
Cultural immersion on a B2B travel incentive experience provides your guests…<\/div>\n\t<\/div>\n<\/div>\n<\/a>\t\t\t <\/div>\n\t\t\t\t\t\t\t\t\t\t\t
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\n\n\n\t\tDriving Growth: The Art of Channel Partner Incentives\t\t<\/h5>\n\t\t
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When we look at the pros and cons of each model, one big challenge is balancing the wants of the rewards provider with the recipients. While models like growth targets are simple, they can miss the mark on maximising growth opportunity across your customer base. Growth percentage targets sometimes lead to buying cycles that cause you to lose individual customer volume every second year.<\/p>\n\n\n\n

Like the three we mentioned, opportunity value models help us get closer to maximising your sales potential. But you can\u2019t use them without having meaningful data and insights, and even when you do, gaining clarity from the muddle of data can be tricky. Plus, these often require guidance from sales teams, where dramatic variances of interpretation can emerge.<\/p>\n\n\n\n

While self-determined targets require a lot of work helping and encouraging customers towards realistic goals, these are hugely engaging and most likely to pass the customer\u2019s fairness test. Status points targets can reward everyone through virtual tiers, though establishing pre-program ROI confidence can be a challenge.<\/p>\n\n\n\n

Whatever the model, targets are a powerful tool in driving programs, but there\u2019ll always be concerns around fairness. We can\u2019t lose sight that targets are just one of the variables when building a program. Our strategy has to use the entire \u201ctool kit\u201d to generate engagement in a program. The more you understand the audience you\u2019re trying to reach and how they behave, the more smoothly your program design is likely to be.<\/p>\n\n\n\n

Unfortunately, we see programs stumble all too often due to poor assumptions of the customer, and that\u2019s something targets can never fix, no matter how you use them.<\/p>\n\n\n\n

<\/div>\n","protected":false},"excerpt":{"rendered":"

Targets are frequently used to achieve customer ROI or manage to a fixed budget and often pop up in travel incentive programs.<\/p>\n","protected":false},"author":5,"featured_media":1133,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":true,"footnotes":""},"categories":[13,14,15,20,34],"tags":[],"class_list":["post-702","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-market-share","category-pain-point","category-sales-growth","category-solution","category-incentive-roi"],"acf":[],"_links":{"self":[{"href":"https:\/\/212f.com\/nz\/wp-json\/wp\/v2\/posts\/702","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/212f.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/212f.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/212f.com\/nz\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/212f.com\/nz\/wp-json\/wp\/v2\/comments?post=702"}],"version-history":[{"count":0,"href":"https:\/\/212f.com\/nz\/wp-json\/wp\/v2\/posts\/702\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/212f.com\/nz\/wp-json\/wp\/v2\/media\/1133"}],"wp:attachment":[{"href":"https:\/\/212f.com\/nz\/wp-json\/wp\/v2\/media?parent=702"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/212f.com\/nz\/wp-json\/wp\/v2\/categories?post=702"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/212f.com\/nz\/wp-json\/wp\/v2\/tags?post=702"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}