Why Invest in an Incentive Program when Times are Tough? (cont.)

• Add a referral element to your reward structure. Referrals from satisfied customers are the most valuable source of new business opportunities, bar none. If your customer base is not composed of direct competitors, add a "customer appreciation" component to your incentive program that awards your customers for providing you with referrals that lead to new customers and clients.
  
  
• Enhance customer services. Several of our clients are faced with the challenge of manufacturing and distributing products that have largely become commodities in their respective industries. Other than price, how do they succeed at differentiating themselves from competitors that are offering essentially the same products? With exceptional customer service and strong customer relationships.

Adding services that competitors lack or improving the quality of the services you already offer might allow you to stand apart and offer more value to your customers. You may also have a set of "hidden" services that you've under-promoted and need to be communicated to your customers. The key concept here is that the services you add or enhance must have value to your customer to have any impact (note the section on customer research above).

Keep in mind that every service you provide ultimately depends on the knowledge, skills and attitudes of the employees working directly with your customers. So, investing in your people may be the most direct path to elevating service quality. Employee training is a great place to get things started. Utilizing employee recognition and rewards is an effective way to sustain an ongoing emphasis on customer service excellence; actively recognizing and rewarding examples of great service from your staff will continuously reinforce the mantra of providing value to your customers and its importance to your business. Getting employee buy in could be the catalyst that elevates your services to a level that customers will notice and value above your competition.

In summary, leverage your incentive program to:

1. Get leaner - but protect customer value

• Avoid cuts that erode customer value
• Encourage cost saving ideas and behaviors

2. Keep marketing - but do more with less

• Research your market and refine your value proposition
• Target customers with the “right” tactics and messages
• Leverage your program communications

3. Nurture and leverage customer relationships

• Maintain current incentive value
• Offer product training / classes
• Add a referral incentive
• Enhance customer services

Conclusion
The current business environment is certainly challenging, but for many businesses an economic downturn poses a significant opportunity to strengthen competitive position. With some thoughtful and creative tweaking, a customer incentive program can prove a versatile tool for seizing the opportunity to improve your business, reduce your losses in the short term, and emerge stronger when the market turns around. At the very least, your incentive program can help smooth out some of the bumps you'll encounter as you roll through this slowdown.

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