Incentive - February 2009 - (Page 19) COVER STORY The Road to Recovery By Leo Jakobson / Illustrations By Olaf Hajek n the face of the worst economic crisis since the Great Depression, it’s probably worth remembering that the incentive industry began in earnest in 1929 when James Maritz, son of the founder of what was then a wholesale jewelry and watch firm, saved the family business by selling watches wholesale to corporations to hand out at service anniversaries and to reward top salespeople. By 1930, the company had created the first incentive catalog, the Maritz Prize Book, and would soon rename itself Maritz Sales Builders. It was a business model that allowed the firm—and its clients—to not just survive the 1930s, but to grow throughout those difficult years. Which is the point of any well-managed incentive program: to help a company survive and thrive, regardless of the state of the market. That is why every sales executive, human resources manager and CEO should ask themselves three questions before cutting or eliminating an incentive budget—regardless of the state of their bottom line. These questions are very simple, says Fay Beauchine, executive vice president of global engagement and events for Minneapolisbased Carlson Marketing—which is, along with Maritz, one of the biggest incentive providers around. “Ask what is it you need to get done this year,” says Beauchine. “Are The right incentive program will save your company. Incentive experts discuss the challenges corporate incentive managers are facing, and the solutions you still trying to engage loyal customers? Do you still need motivated, engaged and knowledgeable employees? These are not going away.” None of which changes the fact that, with CEOs laying off employees by the tens of thousands, the incentive budget is a mighty tempting target for the budget axe. Especially to a CEO who watched the chiefs of American Insurance Group (AIG) handed their own heads during a congressional hearing over an incentive program held at the St. Regis Resort, Monarch Beach in California a few days after being really, but there’s been some intensity around it now, particularly in top performer travel,” says Mike Spellecy, corporate vice president, managing consultant, of St. Louis–based Maritz. “How do I justify taking these people when our volume’s down?” Aside from showing how many dollars the company is earning for each incentive dollar it spends, Spellecy points out: “Your top performers…crave recognition, and if you don’t give it to them they’ll find it from someone else.” In good times or bad, the top 20 percent of incentive participants will always qualify for I “Do you still need motivated, engaged and knowledgeable employees?” —Fay Beauchine, Carlson Marketing bailed out of insolvency by the taxpayer to the tune of $85 billion. Just as Incentive went to press, IBM reportedly canceled all of its programs and Smith Barney, the retail brokerage arm of Citigroup, canceled three recognition trips for its financial advisers. Even for companies that have not canceled programs, “There’s been a focus on ROI that’s increased over the last five or six years, recognition. The “Road to Ruin” map on the previous page details exactly how we ended up in a situation where businesses can’t get credit to grow markets and consumers are afraid to spend. Both are crucial to giving the middle 60 percent the chance to earn incentive awards. Reaching that core audience, no matter where they may fall in the channel, is necessary for businesses to thrive and incentivemag.com | February 2009 | Incentive | 19 http://www.incentivemag.com
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.