Incentive - February 2009 - (Page 28) COVER STORY TECH/TELECOM CHALLENGES It Flows Downhill It’s getting ugly out there. While the telecommunications industry hasn’t been hit as hard as industries like banking and retail, trickle-down economics is trickling down. And some companies that invest heavily in enterprise technology, like banking, finance and insurance, will be investing less. Fear on the Front Line Retail channel salespeople have been particularly hard hit by layoffs and job insecurity—and they are the face of your brand. Incentive’s Editorial Advisory Board Weighs In SOLUTIONS • Focus on solutions that save customers money. A lot of high-tech innovation comes in economic downturns when corporate customers realize that they can’t live with the status quo. They become more willing to invest in change that will cut expenses. • Double down on recognition. A tech client of Globoforce had to eliminate merit pay raises and bonuses this year, but it is considering a 25 percent increase in the recognition program’s budget, says Derek Irvine. “Now is the time to rescue employee morale, urgently is what we’re saying,” Irvine says. “You look at the news headlines, the fear, the panic, the rumors going on in organizations, people wondering whether their job is going to be intact or not. That is where recognition comes to the fore…where recognition comes to the rescue.” • Make sure incentive sales goals are within reach. If you can’t reduce targets to achievable levels, consider switching to tiered programs with merchandise gift card awards as well as individual incentive travel. But don’t skimp on the top performers when it comes to travel. If the industry isn’t hurting as badly as others, they have better job prospects, too. • Add training components to channel programs focused on retail technology and telecom salespeople, so they can sell more effectively. Work with channel dealers to create promotions that fit their needs. • Focus incentives at customer service. Sprint Nextel, at the bottom of the most recent J.D. Power & Associates 2008 Wireless Retail Sales Satisfaction Ratings, announced in late January that it will cut 8,000 jobs; Verizon Wireless, at the top of those rankings, announced that its fourth quarter net income grew 15 percent over Q4 2007. Patrick Sullivan, president, PRA Destination Management-NY, and president of Site Q: How is this economic crisis different from the downturns of the ’80s and ’90s? A: With foreign currencies fluctuating up and down, this has definitely put corporations and their incentives on a spend-only-as-needed basis, with an increase in the sales required to win a motivation trip or product; and the number of attendees are down. CASE STUDY Trimming Incentive Travel Recently, One Smooth Stone, a Downers Grove, Ill.–based event planning firm, was informed by a client, a Fortune 1000 tech firm, that it was trimming a day off its three to four annual incentive programs, which range from a highly exclusive program with the 10 top salespeople and CEO, to a global program for up to 1,200. While the firm hasn’t eliminated any programs completely, “They’re trying to do it for less, and to some degree are okay with having it tangibly feel like less,” says Kevin Olsen, president and principal of One Smooth Stone. The incentive programs’ number of attendees and level of accommodations have remained on a par with past years, although some pure meetings have switched from fourto three-star hotels, he says. “It’s more the economy overall,” than any industry-specific pressure, Olsen says, adding that he expects incentive travel to remain a crucial part of the company’s strategy. “When you get involved with a large organization and you begin to see this side of their business, you begin to appreciate the value of incentive programs.”—A.P. Q: How are companies that offer incentive and loyalty programs responding to the economic situation? A: We are getting very-last-minute requests and definitely holding off on signing any contractual agreements until the last minute, but the good news is they are still operating. Q: How do you think the industry as a whole can turn these challenges into opportunities? A: While all we hear about is the economy, just remember to keep a positive perspective, a little bit of patience in our expectation and defiantly a determined outlook. So get excited again and get involved in your job, join an association that will provide you with great skills, and remember, it only happens when you participate. 28 | Incentive | February 2009 | incentivemag.com http://www.incentivemag.com
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