Incentive - February 2009 - (Page 25) MANUFACTURING CHALLENGES Inconspicuous Consumption Both individuals and businesses are spooked by the economy and/or having trouble getting credit. The end result is that neither are spending money, and orders are drying up. Engines Idled Broader economic trouble is rippling back through the manufacturing sector: Just in the last week of January, heavy machinery maker Caterpillar eliminated 20,000 jobs and iconic motorcycle firm Harley-Davidson cut 1,000 workers. And even among survivors, layoffs mean fear and anger. If You Build It They Can’t Come The credit crunch has made home mortgages almost unattainable, crippling one particular manufacturing sector: home building. Incentive’s Editorial Advisory Board Weighs In SOLUTIONS • Focus dealer channel incentives around cash flow, The Business Group’s Robert Dawson recommends. In a bad economy, wholesalers and retailers pay their bills later and later. Only give points toward incentive awards for orders paid for within the contracted terms—30 days, not the 60 or 90 most buyers actually pay in. • Make qualifying possible. “All of our [home building] clients have canceled their programs, or the number of qualifiers is so low it’s ridiculous,” says Bill Boyd of Sunbelt Motivation & Travel. “One company had 250 qualifiers last year. This year they had 40.” Noting that people are a firm’s most important asset, Boyd suggests temporarily relaxing qualification numbers from 90 percent to 75 percent. • Your brand is in their hands. Find out what channel partners need and focus programs accordingly. Manufacturers can’t afford to ignore performance improvement programs, because competitors could offer them, taking away sales when they are most needed. • Don’t lose sales unnecessarily. Customer satisfaction is more vital than ever, and the temptation to commoditize products is higher than ever. Remember that the salespeople working for your dealers are your connection to the market. • With layoffs rippling through the sector, and more likely to come, loyalty and engagement programs are more important than ever. “We have some significant manufacturing clients,” says Derek Irvine of Globoforce. “Their human resources departments see an opportunity to step in and keep morale high.” Patty Saari, vice president, client services, engagement & events, Carlson Marketing What are you recommending your clients do to respond to the economic situation? Don’t panic. Stay focused on the purpose and objectives of the program (which may be even more critical in the economic downturn). Work with us collaboratively to determine what aspects of the program are most important and what areas might be reduced. When significant change is happening in the environment, this is also a time to consider program change…maybe it’s time to completely rework rules engines, for example, since people are now expecting big changes and will be more willing to try something new. What do you think are the biggest challenges facing the industry right now and in the near future? We need to ensure that overall engagement of our collective workforces is viewed by lawmakers as a primary avenue to rebuild the economy. Q: A: CASE STUDY Polaris: Invest in Employees In November, as the economy was crumbling, Medina, Minn.–based ATV, snowmobile and motorcycle maker Polaris started spending money on a new peer recognition program for its 3,200 employees, the Polaris Star Awards. Organized around the company values and goals— specifically going above and beyond expectations—the Globoforce-run program shows employees “we recognize their value and will continue to, even in trying times,” says Andie Johnson, Polaris’ senior compensation specialist. And in fact, Polaris was able to turn in record sales and earnings in 2008. Q: A: incentivemag.com | February 2009 | Incentive | 25 http://www.incentivemag.com
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