In conversations we have with companies who are looking at using Snowfly to improve [something], we are often asked about the ROI of an incentives program.
It’s a logical question. If you are going to spend, say, $1,000 on an incentive program every month, you want to know that that $1,000 is well spent and beneficial, instead of just being a thousand bucks down the drain.
So, companies who are looking at automated incentive systems want to know that they will increase revenue or decrease costs. Perhaps this is done through better employee performance, or higher retention (which means lower cost of employee acquisition), or better employer branding (which decreases cost of new employee acquisition), or more efficient training, or better reviews on Glassdoor and Indeed, or, or, or… there are dozens of ways that an automated incentive system can increase revenue or decrease costs.
We can tell you what our customers have experienced, and how using the Snowfly automated incentives system to increase employee performance has impacted their companies. We can impress you with hard numbers or percentages.
But what we’ve found is that companies who focus on hard ROIs are missing the point. Not to discredit your fiduciary duty to make sure you are spending money wisely, but there are two significant issues with focus on hard ROIs.
First, if you want to know what ROI an automated incentives program will provide, you have to have a really good baseline of your existing KPIs.
Many call centers have KPI information, but some of the metrics you want to improve are either not being measured, or might have unique impactors (such as market, manager, season, timing with product launch, etc.). For example, if you compare two teams, one team might have a wonderful manager and the other managers has “room to improve.” Which team do you think will have better performance and retention?
When looking at the ROI of the Snowfly automated incentive program you might consider comparing new results (with Snowfly implemented) with either historic results or against a control group. Again, impactors will have a significant affect on the control group. If you are comparing historic data (for example, last quarter’s retention, or this month last year’s retention), what was the market like? Did you recently have a product launch, have you changed policies or management? Has the culture or makeup of the team changed? You really aren’t going to be able to compare apples to apples, and your comparison results will be biased.
If you compare two teams during the same time, the same impactors will have positive or negative influences. A bigger issue is that you don’t want to have one team earning incentives while the other team just watches them wondering why they don’t get any recognition. That sounds like a cultural disaster waiting to happen.
The second issue with focusing too much on ROI is that sometimes the R(eturn) or the I(investment) is just a cover up for real and deeper issues that have to do with management and culture.
Our Director of Client Services made a great point:
“You can quadruple the incentive budget, but if your real issue is your culture you won’t see real and lasting results.”
Sometimes the problem isn’t a metric that you have been measuring. Rather, it is a culture that is stifling or toxic. And throwing incentive money into that environment isn’t going to fix the root problem. As they say, you can put lipstick on a pig, but it’s still a pig.
When you want to change certain KPIs, or you want to show the ROI because of changes in KPIs, we question that. Not to be beligerent, but our role is to help you understand the whats and whys of an automated incentive program. If you use Snowfly just to put lipstick on a pig you’ll come back to us within the year and say “WHY IS IT STILL A PIG?” Or, why is our culture still bad? Or, why are we still getting bad reviews on Glassdoor? Or, why have none of our numbers improved?
Each of those questions shows, at their root, deeper issues. And throwing money or recognition at employees does not necessarily address your root issues.
So why use an automated incentive program for employee performance? Because it does actually work.
But the key is that your executive and management teams need to be on board with it. Not from a technical perspective, but from a philosophical perspective. Do executives and managers really care about their employees and culture? If they do they should see remarkable improvements in employee satisfaction and employee performance. Snowfly is simply a tool that magnifies the existing culture.
If executives and managers don’t care about culture or employees, Snowfly might help for a while. But eventually the excitement wears off and your team feels that culture and management isn’t really committed to improvement and change. And the whole gesture feels fake.
Can Snowfly help a bad culture?
Yes, if the executive team and management want to change it. It will take work. It will take effort. We know that when you are committed to improving, and do things that employees know are genuine, you can change. But if you don’t care, Snowfly won’t be successful. Nor will any other incentive system, automated or not.
What’s the ROI?
Like I said, we can give you ROI numbers. But the real ROI will be improvements in areas that are harder to quantify. Improved culture, improved employee sentiment, improved employee satisfaction, improved employee performance. Improved employer brand.
Each of these have a real and lasting impact on your top and bottom lines. You might not know exactly how to measure them, but the results should start to come in. And that is why our average customer stays with Snowfly for years and years instead of the industry standard, dropping off within the first 18 months.