Capture the attention of your distribution channel with reward and recognition programs designed based on the principles of behavioral economics. The goals of the manufacturer and those of the uncontrolled distribution channel are often at odds. The channel wants to focus on high-margin products and increase total sales, while manufacturers want channel partners to promote the whole line and increase market share for the manufacturer’s brands. Channel partners want more autonomy and exclusive access to end users, while manufacturers want more control and their own access to end users. Your uncontrolled distribution channel has a lot of places to focus their attention. Reward and recognition programs have long been used to engage the channel and align their activities with manufacturers’ goals. Applying behavioral economics to your reward and recognition program designs can cut through the clutter to capture more than your fair share of your channel’s discretionary focus and effort. Here are ten best practices to follow that use behavioral economics principles to design the most effective reward and recognition programs. Follow these ten best practices to apply the science of behavioral economics to your next program design. You’ll get the attention of your distribution channel and ultimately increase sales.

1. Get more
than your
fair share
of attention
in your channel
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2. manufacturer
The goals of
a manufacturer
and an
uncontrolled
distribution
channel are often
distribution
channel
at odds.
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3. The channel wants:
n To focus on high-margin products
distribution
channel
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4. The channel wants:
n To focus on high-margin products
n To increase total sales
distribution
channel
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5. The channel wants:
n To focus on high-margin products
n To increase total sales
n More autonomy
and exclusive
access to
end users
distribution
channel
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6. While
manufacturers
want channel partners to:
manufacturer
n Promote their whole line
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7. While
manufacturers
want channel partners to:
manufacturer
n Promote their whole line
n Increase market share for their brands
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8. While
manufacturers
want channel partners to:
manufacturer
n Promote their whole line
n Increase market share for their brands
n Give them their own access to end users
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9. Applying behavioral
economics to your
reward and recognition program
can engage your channel and align
their activities with your goals.
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10. Here are ten best practices
to follow to design the most
effective reward and recognition
program for your channel partners
using behavioral economics.
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11. Mix it Up
Build a calendar with new rules structures
every few months to keep things fresh.
As participants become
eager to move to the
next level, they will
become more engaged
in your program.
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12. Too Much
of a Good Thing
Rewarding with too much cash actually
results in a reduction of sales.
Hedonic rewards, like travel, merchandise
and entertainment,
are highly emotional
and make people feel good about
what they have accomplished.
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13. Obey the Rules
A program’s rules structure is almost
as important as the
awards offered. Make
the rules
sure the rules structure
is aimed at getting the
right audience to perform
the desired behavior.
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14. Less can be More
Choice architecture offers carefully
selected and often limited options
which allows
participants
to choose
their own goal
and be
goal 1 goal 2 goal 3
rewarded if they achieve it.
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15. Say-Do-Gap
A variety of studies have shown
that when asked, most people
say cash will change their
behavior – but when it
comes down to it,
more people perform better
when motivated by a non-cash
reward.
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16. Give 'Em
a Chance
Don’t heavily rely on the 80/20 rule.
Building rules structures to engage all
levels of performers generates better
results. Create competitive groups
that segment your participants based
on performance levels.
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17. Jackrabbit Start
Those who hit the ground running
in an incentive program end
up being the top performers.
Why not apply this principle
to everyone by offering
a fast start bonus to
get things started?
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18. B-I-N-G-O
Create illusionary goal progress
by giving participants a head start.
This convinces them
they’re already well on
their way toward
achieving their goal.
They will work harder
and faster to get there.
free
space
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19. Me It's All
About
The spotlight effect says that people
will do amazing things just to earn the
right to brag about it. Social recognition
takes advantage of this by creating a
currency of bragging rights through
badges, public recognition and
non-cash rewards.
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20. Maybe,
Maybe Not
When there’s a probabilistic element
of a chance for a big reward,
participants will do
what it takes to get
another opportunity
to achieve it.
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21. Learn
more about
how you can use
behavioral economics
to capture the
attention of your
sales channel.
Download
our article
now!
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22. follow us...
BI WORLDWIDE uses the principles of behavioral
economics to produce measurable results for our clients by
driving and sustaining engagement with their employees,
channel partners and customers.
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