Incentive - March 2008 - (Page 10)

IN THE NEWS based on increasing salaries.” So over the past two years, he adds, the rapidly growing economy has made it easier for employees to find new jobs with better salaries. Thus, companies are turning to “noncash incentives with creative communication, individual and group rewards and motivational activities,” to differentiate their retention programs, Verzoub says. Which means more business for incentive houses. From 2006 to 2007, the number of respondents who say they use an incentive house jumped from less than 16 percent to nearly 30 percent. The number of companies hiring promotional marketing agencies more than doubled from 9 percent to nearly 20 percent. “Companies believe that incentive activities are easy and start the first year on their own,” Verzoub says. “Once things get more ambitious, they understand the need and advantage of working with specialists and professionals.” He adds, “On the other hand, they also understand that outsourcing means paying fees and increasing their original budget.” Even so, users seem to be opening checkbooks. Respondents say their firms have increased merchandise award fulfillment outsourcing somewhat, and incentive travel awards are up dramat- ically. Merchandise fulfillment jumped about five percentage points, but incentive travel outsourcing has tripled. There is a downside to the report: Satisfaction with incentive programs has decreased. While the survey report didn’t break out those outsourcing programs from those running them internally, respondents who call their programs very or rather effective dropped from 87 percent to 69 percent. In 2007, the areas most in need of improvement were ROI measurement (55 percent), communication with participants (47 percent), proposal creativity (38 percent) and budget size (32 percent). As for ROI, Verzoub says, “Unless a general manager is behind the incentive program and requires an ROI measurement as part of the project, many sales managers and other stakeholders prefer not to measure too much,” says Verzoub, attributing that reluctance to the risk of demonstrating “that your incentive program wasn’t successful, or that your original goals were not fulfilled, or worse, that your overall program bud-get couldn’t be covered with incremental revenues. It is politically correct to mention ROI as the field to improve, but I don’t see efforts in Latin American companies in that direction yet.” s Primary Objectives 2006 2007 Increase Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .86% . . . . . . . . .81% Recognize Best Performance . . . . . . . . . . . . . . . .44% . . . . . . . . .40% Increase Employee/Client Loyalty . . . . . . . . . . .40% . . . . . . . . .64% Improve Customer Service . . . . . . . . . . . . . . . . . . .18% . . . . . . . . .22% Develop New Markets . . . . . . . . . . . . . . . . . . . . . . . . .25% . . . . . . . . .26% Encourage Teamwork . . . . . . . . . . . . . . . . . . . . . . . . . .30% . . . . . . . . .27% Improve Certain Activities . . . . . . . . . . . . . . . . . . . .N/A . . . . . . . . . .24% Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9% . . . . . . . . . . .3% Annual Program Budget (in US$) 2006 2007 More Than $100,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . 15% . . . . . . . . .18% $25,001 - $100,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6% . . . . . . . . . . .11% $10,001 - $25,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21% . . . . . . . . .15% Up to $10,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25% . . . . . . . . .16% Channel/Client Programs Percent of Respondents Who Run Channel/Client Programs Is Down 65% 2006 55% 2007 Recipients of Channel/Client Programs: 2006 2007 Distributor Sales Force . . . . . . . . . . . . . . . . . . . . . . . .50% . . . . . . . . . 43% Distributor Owner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22% . . . . . . . . . 33% Wholesaler . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11% . . . . . . . . . 18% Retailer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22% . . . . . . . . . 20% Franchise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3%. . . . . . . . . . . 8% Salesperson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31% . . . . . . . . . 30% End User/Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . .56% . . . . . . . . . 35% FROM “RESEARCH ON INCENTIVES AND MOTIVATION MARKETING IN LATIN AMERICA” BY AV BUSINESS & COMMUNICATION. ALL PERCENTAGES ROUNDED TO NEAREST WHOLE NUMBER. NEW ONLINE COLUMNIST w Incentive magazine welcomes Paul Hebert, executive director of Excellence In Motivation, Inc. as a new monthly columnist. This month, Hebert examines the truth about ROI. www.incentivemag.com/ROI 10 | Incentive | March 2008 | incentivemag.com http://www.incentivemag.com/ROI http://incentivemag.com

Table of Contents Feed for the Digital Edition of Incentive - March 2008

Incentive - March 2008 Contents Editor’s Note: Delivering on Diversity In The News Cover Story: Leveraging Diversity in the Workplace Incentive Interview: Paul Levesque on Why Awards Fail Case Study: AEIS’ Max!-imum Incentive Program Mine Employees’ Creativity with Innovation Incentives Incentive Must-Reads The Third Annual Gift Card Roundtable My Turn: Motivation or Bribery? Everybody Get Together In Her Shoes: Why Bosses Should Be Flexible Incentive Primer: Passport Problem-Solving potentials Here and Now Is CES Electronics Heaven? China and Crystal: More Than a Pretty Face Travel News Florida: What’s New on the Beach? Smooth Sailing for Incentive Cruising Come To Hawaii And Take It Fast Last Word: But Enough About You

Incentive - March 2008

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