Incentive - February 2009 - (Page 23) BANKING/FINANCE CHALLENGES Walking the Plank Massive industry-wide layoffs, high-profile corporate failures like Lehman Bros., and the worsening financial situation of giants like Citigroup are causing management to consider cutting program budgets. Drowning Options Meanwhile, traditional cash incentives— bonuses and stock options—are nonexistent or far underwater. The AIG Effect Large banks and financial institutions have taken hundreds of billions of taxpayer dollars and are afraid incentive travel will lead to the perception among lawmakers and the public that they are wasting taxpayer dollars on luxurious junkets—causing many to cut programs. Incentive’s Editorial Advisory Board Weighs In SOLUTIONS • “Maintain rather than change or eliminate top-performer programs,” says Maritz’s Mike Spellecy. “They are self-motivated, but they crave recognition and will get it elsewhere.” For instance, from your competition. • Understand that the challenges that caused you to create your incentive programs in the first place still exist—if anything, they’ve gotten more serious. Maritz’s Mel Van Dyke notes that the company has clients that canceled programs six months ago coming back now saying, “We still have those needs.” • If you’ve accepted public money, lower the overt luxury quotient—switch from beach resorts to city properties, move to individual incentive travel for a year, run a points-based merchandise or gift card program. The latter two alternatives make it easier to tier programs so salespeople who won’t make their numbers have something to aim for. • Add business meetings. “We always encourage clients to have business meetings every day,” says Harith Wickrema, president of Willow Grove, Pa.–based Harith Productions. Aside from tax benefits, “you get to gather information from the best salespeople in your company,” he adds. • Before you start cutting, “Ask what is it you need to get done this year,” says Fay Beauchine of Carlson Marketing. “Are you still trying to engage loyal customers? Do you need engaged, knowledgeable and motivated employees? These are not going away.” Bill Boyd, president & CEO, Sunbelt Motivation & Travel How is this economic crisis different from the downturns of the ’80s and ’90s? Q: A: The speed with which this downturn has occurred has been unprecedented. In previous downturns we have been able to predict and take remedial action due to the slow progress of the effects, but with this downturn, it all happened in 30 days. Sunbelt had a good 2008, but going into 2009, who knows what is going to happen. What do you think are the biggest challenges facing the industry (incentive providers and suppliers) right now and in the near future? CASE STUDY Making a Charitable Choice When real estate services firm CB Richard Ellis decided to cancel its annual Recognition Conference over concerns that a luxurious incentive trip sent the wrong message during a time of economic challenge, the company had one big problem: The trip was already paid for. Instead of eating the cost of 225 room packages at the Hilton Los Cabos Beach and Golf Resort in Cabo San Lucas, company leaders—and the salespeople who had earned the trip—decided to give them to an even more deserving group of top performers. One hundred were donated to the Wounded Warrior Project, a nonprofit organization that assists men and women of the armed forces who have been severely injured in combat. The rest will go to charities chosen by the company employees. —Alex Palmer Q: A: With most incentive companies having fixed overheads, survival will be the greatest challenge in 2009. Q: How do you think the industry as a whole can turn these challenges into opportunities? A: By encouraging clients that now is the time, more than ever before, to offer performance improvement programs. The economy will improve and the companies that manage to keep their most significant assets— their best customers, their star salespeople—will be poised to excel. incentivemag.com | February 2009 | Incentive | 23 http://www.incentivemag.com
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