Utilising Professional Incentives Expertise in a thriving Market Economy: A view into FMCG’s and their GTM (Go to Market Strategy): Nigeria
The success of many FMCG’s depends greatly on its marketing strategy. One of its GTM strategy (Go to Market Strategy), is the use of Sales force/team/channel for an optimised, personalised, and wide market reach.
The Sales team are the mediums to get direct market information on market growth, products appraisal or evaluation, and service sustenance in a competitive economy. As a result of the role they play, the Sales force of these companies are a lifeline in the value chain process to achieve success.
It therefore cannot be overemphasised that an equipped and motivated Sales force/ team is pertinent to organisational growth, their increase in performance translates to productivity, ROI and achieved set targets. Their success is parallel to the success of the organisation.
Study by IRF Incentives Research Foundation, 2012
Aberdeen group survey of 312 companies correlated organisational success to Sales effectiveness practice and accomplishments. Where the top 20% companies in the survey; had 16% higher average sales quota than others, 10% average year over year increase in percentage of Sales reps reaching quota versus a 6% decline for laggard organisations and 88% customer retention rate versus 14% for laggard organisations.
A large part of effective planning in companies, involves exploring avenues to have a Sales force that are driven, motivated and achieve set targets. To achieve Sales and productivity targets which are aligned to organisational goals. In view of this, Incentives and Rewards programs are introduced as motivators. Rewards which are offered to incite specific actions for increased productivity.
Organisations have evolved with the trend of giving Incentives, Rewards and Recognition, in addition to remuneration. It is commonplace to see the average Nigerian Sales employee indicate being ‘Incentivised” for sales achievement on enquiry.
Usually as extrinsic and intrinsic rewards such as cash, merchandise, awards, and recognition from their organisation but primarily in cash in the Nigerian market. These incentives plans are usually managed by the HR departments of their employers.
While this progressive approach to motivation and employee engagement by organisations are commendable, they tend to wane overtime in how they are perceived and received by sales employees’, which leads to dissatisfaction. It results in a churn for employers, constantly losing their top performers and sales teams to competition regularly in the market.
It leads to the big question; “Are Incentives not enough to retain and motivate employees anymore?”
The answer is Yes, Incentives are still the strongest tools for motivating, retaining, and rewarding employees. The application of it however is what is key. Incentives are programs which are systematic and market-oriented interventions. To achieve desired outcomes through integrated motivational strategies. It goes beyond ‘giving something to someone for doing something’.
Uri Gneezy, Stephan Meier, and Pedro Rey-Biel, in their study (When and Why Incentives (Don’t) Work to Modify Behaviour) Journal of Economic Perspectives—Volume 25, Number 4—Fall 2011—Page 206
Suggests that “when economists discuss incentives, they should broaden their focus. A considerable and growing body of evidence suggests that the effects of incentives depend on how they are designed, the form in which they are given (especially monetary or nonmonetary) how they interact with intrinsic motivations and social motivations, and what happens after they are withdrawn. Incentives do matter, but in various and sometimes unexpected ways”
It takes a qualified, trained, and certified Incentives professional to know, what Incentives to apply to a select audience, how to design same incentives and when to apply the Incentives to a Sales team for measurable outcomes.
The ‘paint brush’ or ‘One size fit all’ approach of what incentives and type of incentives to motivate Sales teams for FMCG’s in Nigeria will be counterproductive, for both the organisation and the sales teams. The goal to be achieved for every organisation, is a key requirement to identifying the type of Incentive program it needs.
Where Sales performance is failing, it can be driven by the right mix of Incentives and Rewards programs. “Poorly designed rewards, recognition and incentives programs can produce poor results, lack motivational appeal or cause unintended consequences” (IRF, 2018).
An inspiring and effective Incentive/s program must:
- Have Goals
- Develop Program Rules that inspire
- Communicate effectively
- Make use of technology for effective program monitoring
- Educate the Sales team
- Provide meaningful Rewards
While all these components are key to a successful program, it must be monitored and adjusted duly for it to succeed, or else it would be financially draining to the organisation, monotonous in application to the Sales team and yield no result. The expertise and time required to sustain these programs is often non-existent in most FMCG’s, as such they keep revolving the same type of Incentive plan which loses its effectiveness over time.
However, utilising professional Incentives experts cannot be underrated. It gives organisations the bonus of having their motivation and performance programs implemented, managed, and monitored by the professionals. Benefits of; Type of Incentives, Reporting, Program Updates and Program adjustments are given from a professional assessment point of view.
The primary focus of an IE (Incentive expert) to the organisation will be to:
- Increase business sales and grow profits
- Establish a bond between the business and its customers
- Change buyer’s behaviour
- Motivate the Sales Team
On the long run, the aim and duty of an IE is to provide organisations especially FMCG’s with a teeming sales force numerous opportunities to succeed and grow in both short term and long term. While it builds and maintains relationships between business and customers, as it increases sales growth over a period.