Why you need to pay more attention to your incentives
Most school fundraising companies offer the same type of incentive program. They make the cheap prizes easy to win and the better prizes much more difficult to obtain. This makes financial sense for the company; however most students end up only winning the junky prizes.
And it's no wonder that with more and more parents complaining about low prize quality, these types of prize plans are beginning to fall under greater scrutiny. Many sponsors feel that these incentive programs are the only option so they simply accept any complaints as normal. But do you really have to settle for the status quo? Are there viable alternatives?
The Cost of Cheap Fundraising Incentives
One of the first questions sponsors want to know is what percent profit they'll make. It is obvious that they want the highest profit possible, and why not? What sponsors don’t realize is they're giving up a lot in exchange to get the higher profit. Companies can offer more profit because they are giving away less in terms of prize quality. The effect of cheaper prize incentives is lower student motivation, and the result is lower gross sales. On the other hand, better prizes typically bring in more total dollars because more students tend to participate.
Familiarity Breeds Complacency
Another reason the traditional fundraising incentive program is less effective in motivating sellers is that most people are already familiar with how it works. This usually has a negative effect on participation. Companies do a good job of initially raising the excitement level by emphasizing the higher level prizes because they know that students will focus on them. As a result, students are initially excited. In the end, the majority will only sell enough to win the cheaper prizes. This is a major reason schools typically only average about 15-20% participation.
Improve Participation with Better Prize Programs
If you could offer better incentives at even the lowest prize levels, this would have a profound effect on gross sales. The result would be more students participating because they wouldn't have to sell as much to receive a more exciting prize. In exchange for a slightly lower profit, there are higher quality prize incentive plans available that have been proven to outperform the more traditional ones.
Remember, money is made off of gross sales. Instead of asking which prize plans offer the highest percentage of profit, ask which one will best motivate our students to get out and sell.