Incentive - January 2009 - (Page 9)

HEADLINES The Latin American Incentive Market An Argentina-based motivation company attempts to quantify the state of the Latin American incentive market BY LEO JAKOBSON W hen I first started this business in 1995, I could only talk about incentive programs to multinationals, to companies like Xerox, which was my first client,” says Alejandro Verzoub, president of AV Business & Communication, a full-service incentive and marketing company based in Buenos Aires, Argentina, that services all of Latin America. “In 2008, I [was able] to approach a lot of local companies and they would know what I was talking about.” Whether they would want to use an incentive program is another question, he says, but the idea has filtered out into the market. How much is a question that Verzoub has been trying to answer for the last four years with a survey of top-level executives from 10 countries, from Mexico to Argentina. This year 211 executives in firms in the retail, marketing, insurance, services and telecommunications industries filled out the surveys, with twothirds saying they used some sort of incentive program and a bit more than half saying they considered those programs effective. About 56 percent of the program users run sales and other incentive programs for their own staff, and a few less—though still more than half—do so for clients and channel partners, and for retail customers. While sales were the most heavily targeted overall, more than half of the internal programs reported included nonsales employees, such as distribution, administrative and production staff. As for external programs, consumer loyalty was number one, the target of 46 percent of those programs, followed by distributor sales forces (37%), distributors’ owners (29%) and retail salespeople (21%). Incentive travel was the most common award (53%) followed by gift cards and certificates (42%), awards catalogs (28%) and cash (24%). Interestingly, a slightly larger percentage of respondents consider cash the most effective award (28%) than actually use it. “There is an increasing awareness of non-monetary incentives,” Verzoub believes. “Everything goes in the same pocket as salary. Cash is a bonus, but it is not a real incentive,” a message that’s increasingly gaining traction in Latin America. As for the area respondents felt need the most improvement, ROI measurement was number one, although Verzoub’s experience is that many clients talk about measuring ROI, but fewer actually work very hard at it. External Programs’ Main Goals Increase Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . .68% Reward Best Performance . . . . . . . . . . . . . . . . . . .30% Increase Employee/Customer Loyalty . . . . . . . . . . .74% Improve Customer Care . . . . . . . . . . . . . . . . . . . . .45% Develop New Markets . . . . . . . . . . . . . . . . . . . . . .37% Encourage Teamwork . . . . . . . . . . . . . . . . . . . . . . .26% Increase Efficiency . . . . . . . . . . . . . . . . . . . . . . . .16% Incentive Programs’ Annual Budgets (in US dollars) Less than $10,000 . . . . . . . . . . . . . . . . . . . . . . . . .29% $10,000 to $25,000 . . . . . . . . . . . . . . . . . . . . . . . .13% $25,001 to $100,000 . . . . . . . . . . . . . . . . . . . . . . .15% More than $100,000 . . . . . . . . . . . . . . . . . . . . . . .17% No Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26% Incentive Travel Program Budgets (Per person, in US dollars) Less than $300 . . . . . . . . . . . . . . . . . . . . . . . . . . . .6% $301 to $400 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10% $401 to $600 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8% $601 to $1,200 . . . . . . . . . . . . . . . . . . . . . . . . . . .13% More than $1,200 . . . . . . . . . . . . . . . . . . . . . . . . .15% Do Not Use Incentive Travel . . . . . . . . . . . . . . . . . .48% | January 2009 | Incentive | 9 incentivemag.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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