Incentive - February 2009 - (Page 27) RETAIL CHALLENGES Conspicuous Consumption Is Out For that matter, so is inconspicuous consumption—according to the Consumer Confidence Index, which hit an all-time low in December—and the bottom line is being clobbered. Pink Slip Nation Massive layoffs and bankruptcies have left retail salespeople’s morale in the basement and injured customer service. And the economic picture is only getting bleaker—economists and analysts are starting to suggest unemployment could approach 10 percent. SOLUTIONS • Use loyalty program information. For years, consumer loyalty practitioners have been harping about all the information these programs gather about customers. Use it. Find out what individual customers want and target them with promotions accordingly, rather than slashing prices wildly and hoping for the best—which didn’t work too well during the 2008 holiday season. • Aggressively reach out to customers. Barry LaBov was impressed by the promotion run recently by a newly opened Dunkin’ Donuts franchise near LaBov & Beyond’s office. “They dropped off free donuts at our office,” he says. “They are out there trying to get business.” • Everyone’s a salesperson. Many community banks don’t have the toxic mortgage troubles and they are taking advantage of that by focusing on retail banking, Robert Dawson of The Business Group says. One community bank he knows used an incentive program to turn every employee into a salesperson—bringing in leads and letting others they do business with in the community know that the bank is open and ready to do business. • Use recognition and incentive programs to communicate with employees. Retail has seen a large number of job reductions, so companies are looking to engage and communicate with survivors, says Maritz’s Mike Spellecy. “It’s an issue of how you maintain customer service when you have had layoffs and financial constraints,” he says. • Focus on the customer’s needs. Rather than cutting prices, a better and more sustainable business model would be to focus on “products that will be attractive in this economy,” says LaBov. In the consumer appliance space, for example, he suggests pushing freezers, which allow consumers to make money-saving bulk food purchases. Incentive’s Editorial Advisory Board Weighs In Dennis Borst, president and COO, Patriot Marketing Group What do you think are the biggest challenges facing the industry (incentive providers and suppliers) right now and in the near future? It’s the same as always, “Why should I give my employees more for doing their job? I already pay them.” Same thing with customers, “Why do more when I already give them a good product at a fair price?” How do you think the industry as a whole can turn these challenges into opportunities? We need to show companies the success stories…how they are fending off disaster. We have been managing customer programs and employee programs for a customer with 62 dental offices in California, Arizona and Nevada. In 2008, they increased their patient base, of families, by more than 20%. They increased orthodontic sales by more than 40% with a program we put in place in 2007 and tweaked in 2008. We also do an employee recognition and a referral program. They are convinced that their sales successes and growth, coupled with their new hire programs, have helped in retaining a secure employee base while attracting better qualified applicants. Q: A: CASE STUDY The Eighth Category: Media Darrell Benning, manager of meetings and incentives for San Diego–based GlobalPoint Travel Solutions, says his company has focused on industries that reward third party sales like advertising and media, partly because the return-on-investment can be so clearly demonstrated. Yet Benning is seeing challenges in this area as well. One of GlobalPoint’s radio station clients saw the number of participants in its annual incentive trip for top advertisers drop from the average 80 to 30 this year. Part of that was due to reduced advertising budgets, but concerns about public perception also played a role. The general manager of an international car dealership canceled two weeks before the trip, concerned that his attendance might seem inappropriate. “He had more than paid for his trip with all the advertising he had done with the media, and was quite entitled to it, and had gone every year,” says Benning. “This year, he was concerned about the perception of him being away.” —A.P. Q: A: incentivemag.com | February 2009 | Incentive | 27 http://www.incentivemag.com
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