The Performance Executive: Maximizing Financial Results Through Customers and Employees

E-mail a Colleague E-mail a Colleague

To subscribe to this free e-bulletin, visit www.incentivecentral.org (click on “Subscribe Today”). To submit people performance story ideas, please e-mail Bill Keenan at bkeenan@sellingcommunications.com.

2007 Incentive Federation Study Tracks Growth of Incentive Marketplace
Motivation Show Results Point to a Promising 2008
Promotional Products Drive Trade Show Traffic
Gift Cards Overtake Cash as an Employee Incentive
Circle of Excellence Awards Showcase Results-Oriented Incentive Programs
Reggie Awards Highlight 2008 Integrated Marketing Conference
Promotional Products Expo Delivers Tools to Work Smarter, Not Harder
PMA Offers Help With Promotion Marketing Basics

End Users Want Fresh Ideas from Incentive Suppliers

Recognition and Rewards Are Only Part of the Performance Equation

PPAI MARKETShow in Orlando Focuses on Wearables

2007 Incentive Federation Study Tracks Growth of Incentive Marketplace
A total of $46.1 billion was spent by U.S. companies on incentive travel and merchandise in 2006, according to the "Federation Study 2007: A Study of the Incentive Merchandise and Travel Marketplace," sponsored by the Incentive Federation and conducted and prepared by GfK, the fourth largest marketing research organization in the world. That total represents a significant increase from the just-under-$30 billion figure that was reported in the Federation's last comprehensive survey in 2000. It also represents $32.7 spent on incentive merchandise and $13.4 billion on incentive travel.

In addition to budget figures, the report looks at how merchandise and travel incentives are being used. According to the study, some 34% of U.S. companies overall used either travel or merchandise incentives last year, with 31% using merchandise and 10% making use of travel incentives. The average budget for travel incentives in 2006 was $164,271, with more than three-quarters of incentive travel end-users spending between $100,000 and $500,000. The typical budget for merchandise incentives was lower - $119,008 – and just under half of merchandise incentive users spent between $100,000 and $500,000.

Other highlights of the study:

  • Incentive travel is seen as an investment by 85% of all end-users in the study.  Merchandise incentives are seen as an investment by more than three-fourths of respondents.

  • Close to half (48%) of companies with revenue over $100 million use merchandise incentives and just under a quarter (23%) of these companies take advantage of incentive travel.

  • The most common incentive travel application is for sales incentives. Other applications are non-sales employee recognition and consumer/user promotions.

  • Merchandise incentives are most often used for non-sales employee recognition and business gifts.

More than half of the respondents in the Federation study also believe that spending for incentive travel will go up over the next two years, while 37% say it will at least stay the same. On the merchandise side, some 34% expect budgets, at minimum, to stay the same, while 59% expect budgets to increase.

"What's particularly exciting about the results - besides the dollar figure," says Frank Katusak, Incentive Federation board chairman, "is that incentive end-user executives view incentives as an investment rather than a cost because they can quickly and easily measure the financial return of these initiatives as compared to other types of business development programs." 

For a more detailed look at the "Federation Study 2007," click here.

Motivation Show Results Point to a Promising 2008
Preliminary verified attendance at the 2007 Motivation Show totaled 13,500, including 7,500 buyers and 6,000 exhibitors, according to the show organizers. Altogether there were 1,900 exhibiting companies occupying nearly 250,000 sq. ft. of exhibit space.

While those numbers were down somewhat from 2006, many exhibitors indicated that they got to see the decision-makers they wanted to see, and that the Motivation Show is still the best place at which to find and meet serious buyers. In addition, two new show offerings received very positive reviews.

"We are very pleased with the success of our new seminar series," says Donna Oldenberg, conference director. More than 600 paid registrants attended the new "Executive Leadership Series: Strategies to Motivate, Empower and Reward" – where end-users from companies like Microsoft, DHL, Gap, John Deere, and Red Roof Inn talked about best practices for improving employee performance and customer loyalty. "In fact," Oldenberg says, "more than two-thirds of the conference registrants were first-time attendees, indicating that this is what attracted them to the show."

Another successful innovation was "MotivationConnect," a suite of revolutionary web-based tools that matched attendees with the most relevant people, products, and events at the show. According to Peter Erickson, manager director of the show, "More than 3,600 registrants used the online portal an average of 2.6 times to plan their show participation. They conducted almost 14,000 searches and bookmarked companies, services, or products nearly 20,000 times."

For additional information about the 2007 Motivation Show or for details about exhibiting or registering for the 2008 Motivation Show, go to www.motivationshow.com.

Promotional Products Drive Trade Show Traffic
Tradeshow professionals find promotional products to be very effective in drawing attention to their tradeshow exhibits or events, according to a survey by the Promotional Products Association International (PPAI) of attendees at TS², an industry show for exhibit and event professionals that took place in Washington, DC in July.

A survey of show attendees found that more than 95% of respondents report using promotional products at their tradeshows and events, and nearly 72% say that promotional products are either "effective" or "extremely effective" in meeting their goals.

The most common uses for promotional products by tradeshow professionals include:

  • Increasing name recognition – 79%
  • Increasing booth traffic – 64%
  • Generating goodwill – 37%
  • Attracting new customers – 35%
  • Generating interest in products – 34%

The three most commonly used promotional products used by tradeshow professionals include writing instruments; wearables – including t-shirts, golf shirts, and logoed shirts; and bags – primarily totebags.

For more information about PPAI, go to its Web site at www.ppai.org. For additional information on the survey of tradeshow professionals, contact Anne Lardner at AnneL@ppai.org.

Gift Cards Overtake Cash as an Employee Incentive
According to research sponsored by First Data Corp., companies who currently use gift cards as employee incentives spend nearly half (49%) of their incentive budgets on gift cards, compared to only 32% spent on cash incentives.

The study used an online survey to poll 501 decisionmakers at companies with more than 100 employees. It also found that the median incentive budget for respondents was $50,000 and that 33% expect to increase the share of their budget allocated to gift cards.

When respondents were asked to identify what influences purchasers most when selecting gift cards as incentives, the top choices were:

  • Ability to choose card denomination (71%);
  • Ease of ordering (66%); and
  • Volume discounts (58%).

Performance recognition, cited by 88% of the all respondents, and sales incentives, cited by 64% of all respondents, are the most popular occasions for giving employee gift card incentives.  And while volume discounts are highly preferred, many merchants have yet to provide programs to address this desire, according to the study. Less than half (48%) of gift card purchasers say they receive a discount off the face value of the incentive gift card.

According to Mark Herrington, president of First Data Prepaid Services, "The market potential for the use of business incentives continues to grow. Gift cards as incentives appeal to businesses because recipients can purchase what they want, the cards are easy to distribute, and they have a high perceived value among recipients."

For more information, visit www.firstdata.com.

Circle of Excellence Awards Showcase Results-Oriented Incentive Programs
The Incentive Marketing Association (IMA) Circle of Excellence Award recognizes outstanding examples of incentive programs that are successfully used to motivate employees and customers. This year, American Express Incentive Services, Sovereign Bank, Allied Waste, BMW Financial Services-Spain, and Singtel Optus-Australia received the prestigious Award for developing and implementing incentive campaigns designed to help drive their businesses in a variety of ways.

The winning programs included:

  • American Express Incentive Services (AEIS) – for its Employee Recognition Initiative, "Max! Reward and Recognition."

  • Sovereign Bank – for its Employee Referral Program, "Sovereign Referrals and Rewards."

  • Allied Waste – for its Safety Incentive Program, "Dedicated to Safety."

  • BMW Financial Services-Spain – for its Sales/Channel Initiative, "10 Series - Dealer Distributor Incentive & Sales Incentive Program."

  • Singtel Optus-Australia – for its Sales Incentive, "007 – Sales R&R Challenge."

For more details on each of these Circle of Excellence winners, visit the Incentive Performance Center at www.incentivecentral.org.

Reggie Awards Highlight 2008 Integrated Marketing Conference
The Annual Integrated Marketing Conference, April 8-9, 2008, put on by the Promotion Marketing Association (PMA), is the association's national event – at which global brands and retailers will provide crucial insights on the latest developments in promotions and integrated marketing. From this two-day event, attendees can gain actionable insights into the latest trends, strategies, and tactics that are essential to maintaining a competitive edge in today's marketplace.

This year's theme is "Accountability in Action!" and in addition to tackling top-of-mind issues for integrated marketers, the conference will feature breakout sessions on Shopper Marketing, Green Marketing, Interactive, Experiential, Entertainment and Marketing Law.

The REGGIE Awards Reception & Gala, a key component of the Annual Conference, will be taking place on April 9th, 2007. For further information please call the PMA at (212) 420-1100, or visit the PMA Web site at www.pmalink.org.

If your company has been involved in creating an effective promotion marketing program, especially if it was part of an integrated marketing strategy to build brands, then you may have a shot at winning one of this year's REGGIE awards. The official deadline for entries is January 11, 2008. To enter your program, click here.

Promotional Products Expo Delivers Tools to Work Smarter, Not Harder
The Promotional Products Association International (PPAI) will be holding its 2008 PPAI Expo at the Mandalay Bay Convention Center in Las Vegas, January 14-18, 2008. Committee meetings and Education Day will take place January 14-15. The tradeshow will be open January 16-18. The theme of the 2008 Expo is "No Comparison." Education sessions should provide participants from all levels of experience (from basic to senior) with new and creative ideas and tools to use in their own practices.

Ten different paid workshops will be offered this year. Each of these workshops is designed to allow time for an in-depth analysis of the subject matter. Topics will include guerilla marketing, financial planning, effective referral generation, niche marketing solutions and strategies for Web site success. In addition, luncheon sessions will allow attendees to learn and be inspired by industry influencers:

  • "Developing a Comic Vision", Tim Gard
  • "The Seven Deadly Sins of Strategic Implementation", Stan Slap
  • "Jump Start Your Marketing Brain", Doug Hall

"These in-depth workshops provide an ideal venue for the peer-to-peer interaction that is essential to adult learning and that our members value," says Rick Merrill, PPAI director of professional development. "It is our hope that our members will leave The PPAI Expo 2008 having been challenged, pushed beyond their comfort zones and equipped with a renewed sense of confidence."

For information or to register for the PPAI Expo and workshops, go to www.theppaiexpo.org.

PMA Offers Help With Promotion Marketing Basics
"Basics of Promotion Marketing," a two-day seminar offered by the Promotion Marketing Association (PMA) should be seen as a career-development necessity. It's designed to develop attendees' skills in all aspects of promotional marketing, including strategy, law, and all tactical elements of promotion. Small classes taught by experienced marketing executives analyze real-world promotions and promotional campaigns. Then, in small teams, participants design and develop their own integrated marketing promotions based on detailed industry case studies. The next seminar will be held at the Club Quarters in Chicago on January 29-30, 2008. For information, visit the Promotion Marketing association Web site at www.pmalink.org.

End Users Want Fresh Ideas from Incentive Suppliers
The new Corporate Advisory Board for the Incentive Marketing Association (IMA) recently met in Chicago to discuss how incentive suppliers can better meet end-user needs. The six participants on the board, all from large companies representing diverse industries, are responsible for developing and implementing employee engagement and training initiatives; two also plan sales and channel incentive programs, according to Karen Renk of IMA. 

The board members agreed their greatest challenge was convincing senior management incentive and recognition programs are not "a waste of money." Another key challenge they discussed was "motivating the middle," Renk says. "Moving the needle by just 1% can have dramatic positive impact on the bottom line. We need programs that will engage the average performer," end-users were reported to say. They also want new ideas. All were interested in how programs could be built around a charitable cause.  And finally, says Renk, "They want their incentive suppliers to bring them innovative concepts for fresh programs."

Recognition and Rewards Are Only Part of the Performance Equation
A U.S. Department of Labor study indicates 64% of working Americans quit their jobs because they feel unappreciated, and Gallup research estimates that seven-tenths of Americans complain about no recognition or praise at work.

But do recognition and rewards adequately address those issues? Rick Tate, senior managing partner for Impact Achievement Group Inc., a performance management company, suggests that in some cases they do not. He cautions that:

  • Managers often take a leap of logic that more recognition and rewards will improve productivity and increase retention, and

  • Managers make profound mistakes in how they approach employee motivation by taking the easy route through extrinsic reward and recognition programs. 

Research indicates that there are many more factors to consider regarding employee motivation, which erode the impact of recognition and rewards when they are missing, says Tate. In People Leave Managers…Not Organizations, Tate and co-author Dr. Julie White expose many motivational myths and ineffective morale-boosting methods traditionally thought to improve employee performance. The authors state that the primary motivation to perform comes from a work environment which allows employees to be productive, to achieve, and to participate in a meaningful manner.

PPAI MARKETShow in Orlando Focuses on Wearables
MARKETShows, produced by the Promotional Products Association International (PPAI), is a series of newly designed promotional products tradeshows created to combine two profitable promotional markets — promotional products and imprinted wearables — into one successful business venture with education, products and services. The Orlando PPAI MARKETShow, February 8-9, 2008, is co-located with Imprinted Sportswear Shows (ISS), a leader in the imprinted sportswear marketplace.

Research shows a growing number of decorated apparel professionals are selling promotional products, and access to products and education are significant factors in driving business growth. Additionally, PPAI's 2005 distributor survey states that many distributor members are active in providing goods and services outside of traditional promotional products, including embroidery and screen printing, both of which are core elements of the imprinted sportswear market.

With the co-located shows, promotional products suppliers will benefit by gaining access to those UPIC-qualified and -verified ISS attendees who will cross over to the PPAI MARKETShow floor. Likewise, PPAI tradeshow attendees will have access to the newest products, apparel and equipment showcased on the ISS exposition floor.

For more information about Promotional Products Association International (PPAI), visit the PPAI Web site at www.ppai.org; for information about PPAI's MARKETShow in Orlando, go to http://www.ppaimarketshows.com/.