Incentive - February 2009 - (Page 26) COVER STORY PHARMA/HEALTH CARE CHALLENGES Take Advantage of the “Good Times” For the first time in many years, the pharmaceutical industry’s problems are less severe than other manufacturing sectors’ woes. But restrictions on drug pitches to doctors are still getting tighter, and longterm problems remain. Beware of The AIG Effect The pharmaceutical sector hasn’t been hit with the AIG effect yet—but then, it had a serious public perception problem long before insurance companies or banks did. Hold ’em Tight Recruitment and retention problems are as severe as ever in the hospital industry. Lots of experienced bankers may be job hunting, but they can’t fill nursing jobs. SOLUTIONS • Use the breather wisely. Both of Carlson Marketing’s major pharmaceutical clients have pared down spending a little, Fay Beauchine says. But both are also moving aggressively to replace many duplicative programs run by divisions around the globe with larger global programs that offer economies of scale. • Consider adding daily meetings to incentive travel programs, and try smaller regional programs that top executives can join by teleconferencing technology. Cutting group travel makes it harder to learn from top pharmaceutical reps what doctors are actually saying about your products—and your competitors’ products. • Loyalty now. Nurses and radiology techs may not be afraid for their jobs, but they are still experiencing the fear of the economic crisis. Home values are plummeting, mortgages are unattainable, 401(k)s are shrinking and spouses are being laid off. A recognition program pays double benefits in a time when employees are afraid. • Think about recruiting. If your competitors are laying low, you may be able to find experienced people for some of those hardto-fill jobs. • Don’t forget the basics: Top performers are still the source of the vast majority of your sales—and they know it—so recognize them or risk losing them; focus sales incentive programs on customer retention, account acquisition and building market share. Incentive’s Editorial Advisory Board Weighs In Ira Almeas, president, Impact Incentives and Meetings What are you recommending your clients do to respond to the economic situation? Corporations need to be bullish in a down economy when it comes to yielding the best ROI. Incentives and loyalty programs are dynamic marketing tools that can produce enormous returns if structured properly. Clients need to take their heads out of the sand and reevaluate their current program rules structure. A professional third-party incentive company can evaluate the current structure and design an exciting program based on today’s economic situation. Yes, the bar needs to be raised, but it’s important to understand that the goal needs to be obtainable by at least 20 percent or more of the participants. What do you think are the biggest challenges facing the industry right now and in the near future? Communication. Plain and simple. Clients and third-party incentive companies need to reinforce that these incentive and loyalty programs are profit centers and not cost centers. These are not boondoggles. Q: A: CASE STUDY Direct Sales: Love the Downturn? One intensive user of incentive programs, the direct sales industry—pioneered by firms like Tupperware and Mary Kay—generally does better as the economy gets worse, says Sunbelt Motivation & Travel’s Bill Boyd. “I have been in the incentive market for 30 years, and in the last two downturns, direct sales did very well,” says Boyd, who is a past president of Site, the leading incentive travel association. “I’m not sure why that’s not true now.” It doesn’t seem to be happening this time. “I had lunch with the director of incentives for one direct sales client, and he said the company was doing okay,” Boyd relates. “He said, ‘We expected to be doing better. But we’ve had no decline, so we consider that an upturn.’ ” Still, the company has increased the frequency of its incentive program from annual to every six months, so business certainly isn’t getting worse. —L.J. Q: A: 26 | Incentive | February 2009 | incentivemag.com http://www.incentivemag.com
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