Incentive - January 2009 - (Page 37)

MY TURN is a consultant, facilitator and speaker in the meeting and incentive industry, and the author of The Complete Guide to Selling Meetings, Incentives & Corporate Events, available at www.joselyntepper.com. Contact Bruce at bbtepper@joselyntepper.com BRUCE TEPPER, CITE, CTC Procurement Possibilities S tarting my industry career as a buyer for an auto parts manufacturer almost 30 years ago, I first encountered the dreaded “purchasing department.” Today we call them procurement, but the focus remains the same—commoditize the purchase and go for the lowest price. My responsibilities included trade advertising for our company, managing our trade show exhibit, the annual sales meeting and our various company incentive programs. Working closely with purchasing turned out to be, surprisingly, a very positive experience. On our first meeting, the pur- How do you do applesto-apples comparisons on factors like ambience and environment? chasing manager said, “ I understand steel and raw materials thoroughly, but I have no idea what you folks in marketing do. Just tell me which incentive company, hotel or supplier should receive the business, and if it’s not the lowest bid, give me the reasons why you feel they are the best choice.” In my entire time with that company, no one in marketing had their decisions challenged. incentivemag.com | January 2009 | Incentive | 37 Illustration: Mark Brewer However, that was 30 years ago. In this era of tight cost controls and dependence on technology to provide precise analytical answers, there has never been a greater desire on the part of CFOs to “commoditize” every purchase. Procurement professionals sometimes believe technology has provided the tools to comparison shop any product or service and lay out the results on a spreadsheet. Perhaps hotel rooms should be priced per square foot, food sold by the pound (fresh lobster or canned tuna; what difference does it make?) and ground transportation priced per seat-mile traveled. The problem, of course, is that not all hotels, meal venues or motor coaches are identical. How do you do apples-to-apples comparison on factors like ambience and environment, reputation and image, or reliability to deliver what’s promised? There are a number of reasons Motel 6 has lower rates than a Four Seasons Hotel, McDonald’s charges less for lunch than Morton’s and chartering a city bus is less costly than an air-conditioned coach with reclining seats, reading lights and a video system. Can you imagine your top performers working hard to go on an incentive trip that included a two-star hotel, Happy Meals and an old school bus to transport them? Do you think they’d be thrilled and motivated to earn the experience? It behooves everyone in our industry to remind procurement departments about some realities that defy pure numerical analysis. Incentive travel and merchandise awards involve more than a product or basic service purchase—they are about perceived value, image, quality and a variety of intangible factors. Collectively, those factors can turn an award into an insult if lowest price is the deciding factor. Unlike real commodities, hotels, cruise ships and venues come in a variety of shapes, sizes and quality levels. There are even differences within a given brand to consider. Great incentive programs factor in the emotional and intangible elements, and great procurement managers give those elements some real value on their spreadsheet. An organization’s bottom-line performance depends on a lot more than cost control and always buying on price alone. Great incentive programs are more than the sum of their parts and nothing like buying raw materials. I http://www.joselyntepper.com http://www.incentivemag.com

Table of Contents Feed for the Digital Edition of Incentive - January 2009

Incentive - January 2009 Contents Editor's Note: Rewards Must Be Sustainable Headlines Cover Story: Responsibility's New Role Incentive Interview: Patrick Lencioni Family Rewards: Who They're Working For Primer: Working Design Leap of Faith: Religion in the Workplace Cook Up Engagement: Kitchen Teambuilding My Turn: Procurement Possibilities Motivation@Work: Hard Times Recognition Legal Ease: The Tax Facts on Corporate Gifts Travel News: Where to Go and What to Do The Bahamas: Islands in the Sun Field Reports: Four European Destinations Golf: Around the World in 18 Holes Potentials Here and Now Watches and Clocks: Strike the Pose Golf Merchandise: Awards with a Solid Swing Computers: Digital Delights Retailers Band Together for Gift Card Market Gift Cards: The Prepaid Reward Spectrum Advertiser Index On the Web www.Incentivemag.com

Incentive - January 2009

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