Author: Terry Manion – SVP, Business Development Canada, Creative Group


If you are a parent, you have likely been asked “are we there yet?” This question is usually aimed at the backs of our heads by tiny voices, and the peppering typically starts 10 minutes into a multi-hour drive. The question is repeated with precision at 10-minute intervals and often becomes louder as the anticipation of what awaits at the destination becomes more intense.

Of course, it would be virtually impossible to answer this pressing question if we weren’t aware of where we were going, or how long it should take to get there… perhaps it would help if we were more specific, and if we provided answers to a few questions in advance, such as:

  • Where exactly are we going?
  • How long will it take?
  • Will we be taking any breaks (bathroom, gas… sanity?)
  • How will we know when we are getting close?
  • How will we know when we are there?

From personal experience, I doubt the barrage of questions from our lovely little passengers would stop, but the analogy really helps set up this article… so indulge me, please!

Here’s my point: The same challenges we see in the above example exist when nebulous objectives are set for an incentive program. Generalized incentive goals such as:

  • Increase sales
  • Retain employees
  • Reduce workplace accidents
  • Sell more units of a specific product

With the generalized targets above, all stakeholders are left to interpret where we are trying to go.

So, let’s try this again. And this time, let’s add specifics such as:

  • We are going to increase sales by X amount
  • We are going to boost sales enablement by offering a training program
  • We are going to follow up with every lead at the 30, 60, 90-day mark
  • We will sell X units of product Y by a specific date

See the difference? The incentive goals are now laser focused. We have specified the “destinations.” In sum, we have provided each stakeholder a much clearer (and by extension, attainable) picture of what success looks like.

And now we can calculate the ROI.

Use the formula below while designing the incentive, determine the expected gains, and measure whether the anticipated results warrant your effort and investment.

 ROI = Incremental Increase in Profit / Cost of Program

 At the conclusion of the contest period, use the same formula to determine the true ROI of the campaign.

These steps are akin to pulling over the car, unfolding the map, turning around (so you can address your audience face to face – no more back-of-the-head business) and explaining the entire journey, step by step. For example: Here are the pit stops. This is how long it will take. Here are the signs to look for that indicate we’re getting close. And this is what you’ll see when we arrive at our destination.

There is far more involved, of course, in setting up an incentive program such as individual targets for achievement, percentages of funds being used for promotion, the rewards, etc.

That said, calculating ROI is not a simple process. There are many factors to consider and they vary with each client, product, margin, etc. Identifying the incentive goals clearly and specifically can make the process much easier.

Consider that your CEO and CFO are your kids (remember I asked you to indulge me!) and do them a favor by outlining the route so that they too can enjoy the ride.

Need help determining your incentive ROI?