Ideas, Information, Inspiration
Ammunition
Cross-Cultural Study Examines Incentives’ Emotional Impact
Firms that operate globally may be interested in newly published research that looks at how different cultures react to what researchers call “pleasant surprises” (i.e., unexpected gifts like premiums, in-store coupons, spot awards, promotional products, etc.). Although unexpected marketing incentives can have powerful effects on consumer behavior, not all consumers react to them in the same way. This article investigates cross-cultural differences between the emotional reactions of East Asians and Westerners when presented with unexpected incentives. The study found that for Westerners, an unexpected gift may reinforce feelings of control over their current environments. For East Asians, however, an unexpected gift may indicate imbalance and prophesize bad fortune. These findings have practical implications for international marketing strategies, since marketers often use pleasant surprises to influence consumers’ brand evaluations and purchase decisions. While the marketing literature emphasizes the role of consumer delight as a source of competitive advantage, unexpected marketing activities must accommodate cross-cultural differences. Westerners are delighted with an unexpected gift offered as a token of appreciation for a prior action. East Asians are delighted with an unexpected gift when it’s offered as a lucky sign of good fortune. Promotional programs that include unexpected offerings should adopt either effort-based or luck-based formats, depending on the cultural orientation of the target consumer.
To view an abstract of the article, go to: www.journals.uchicago.edu/doi/abs/10.1086/605592
Resources
Catalyst Announces ‘Engagement ROI’ Partnership
Catalyst Performance Group has formed a strategic partnership with The ROI Institute that is designed to bring credible results measurement to engagement programs. Armed with ROI data, companies can defend existing programs, justify future spend and fuel evidence-based continuous improvement of incentives, meetings, events, rewards, recognition and loyalty programs. “Motivating people with well designed engagement programs has never been more important, yet today these programs are being scrutinized by board members, stockholders, the media – even elected officials,” says Todd Hanson, President of Catalyst Performance Group. “During the past 12 months a firestorm has erupted surrounding engagement programs and has led to the cancellation of billions of dollars of programs. We will help reverse the trend!” The ROI Institute has developed and refined a globally-accepted method of measuring ROI that includes isolation techniques and strict guiding principles, all in an effort to create results that are credible with C-Level executives.
For more information, go to: http://catalystperformancegroup.com/news.148.html
Book
In Celebration of Collaboration
Every year numerous business books and magazine articles are written about collaboration in the workplace. It’s hard not to be in favor of collaboration, but why do some organizations do it so well and other fail at it? Is it the company culture that makes a difference or perhaps the skills of those who endeavor to collaborate? Could it be the tools used to collaborate?
Take a moment and make a list of the tools that your organization currently uses to foster collaboration among coworkers. It’s a bit challenging for many businesses because collaboration is viewed as a pathway to a result rather than a result itself. Many people think of collaboration in terms of a process to be managed rather than a set of tools to be engaged. Thus, you might say that brainstorming sessions, conference calls and company strategy retreats are among your current methods of collaboration. You might even argue that the telephone and the office copy machine facilitate collaboration. Indeed, these may be effective methods for your company, and they may lead to desirable results, but what if the process of collaboration itself became a highly valued product?
Is it possible or even advisable to get your customers and prospective customers to engage in some form of collaboration that will benefit your company? The answer is yes, but the concept can be a bit counterintuitive. After all, imagine what kinds of things your customers could say about you if you were to enable that conversation through one or more social media tools that allow them to interact with and influence one another. Talk about the good, the bad and the ugly. Ask yourself this, however: Do you gain more by sponsoring or at least endorsing this kind of conversation than you do by running from it?
Excerpted from The Social Media Bible: Tactics, Tools & Strategies for Business Success, by Lon Safko and David K. Brake. John Wiley & Sons. 2009.
Education
Travel Leadership Summit Convenes in DC September 16-17
The recession is taking its toll on the incentive travel business, and the problem is compounded by the aftermath of the Swine Flu outbreak and the attacks on the meetings and events business earlier this year. The industry has lost billions of dollars in cancellations, and communities across the U.S. have lost jobs. The U.S. Travel Association is fighting back by focusing on the economic impact of travel. The Travel Promotion Act (S. 1023/H.R. 2935) is once again on the move, advancing through both the House and Senate, and has the support of President Obama and Cabinet officials. Things are slowly improving, but the industry needs your help. Register now for the U.S. Travel Association’s Travel Leadership Summit on September 16-17 in Washington, DC and join hundreds of your colleagues who will call upon Congress to enact the Travel Promotion Act and underscore the importance of the travel business to our economy. Attendees and delegates will meet face-to-face with members of Congress, receive legislative briefings and hear from policymakers and guest speakers. Summit events will be held on September 17 at the Hyatt Regency Washington on Capitol Hill. Optional caucus and delegation events are traditionally held the evening prior.
For more information, contact Melissa Gong at (202) 408-2137 or mgong@ustravel.org
Technology
Industry Veteran Hadlow Heads New Tech Initiative
Michael Hadlow, a leader in the incentive field, is President and Chief Executive Officer of Engagement Technology LLC, a new company founded to operate the Corporate Rewards Exchange and Incentive Business Exchange online reward and engagement services.
As President and Chief Executive Officer, Hadlow will be in charge of all aspects of the company’s development and operation based in Atlanta, GA, and will have a major equity stake in the new firm. Engagement Technology operates two related technologies – the Corporate Rewards Exchange, an online bulk-buying service for the corporate rewards business; and the Incentive Business Exchange, which includes the Solata Engagement Manager platform for supporting sophisticated communications portals for incentive programs and the Universal Rewards Platform to help incentive and marketing companies maximize the effectiveness of their rewards programs using the vendors of their choice. These systems are designed to significantly increase the effectiveness of engagement strategies for companies large and small by creating a more efficient and effective marketplace for the sale of rewards and by providing a powerful communications platform organizations can use to better engage their target audiences.
“I believe that the emerging field of engagement provides a significant opportunity for the incentive business, and that technology will play a critical role in helping organizations of all sizes build closer relationships with their key customers, distribution partners and employees,” says Hadlow. “This new company is being formed not only to make it easier and more efficient for incentive and marketing companies to provide their customers with powerful solutions, but also to help educate corporate America about a relatively unknown field that can play a key role in helping businesses improve financial performance.”
Hadlow has extensive experience in the incentive industry, most recently as President and Chief Executive Officer of Atlanta-based USMotivation. He has also served as a trustee of the Incentive Research Foundation (IRF). During his ten-year involvement with the organization, he has chaired the Research Committee, served as a two-term President and currently chairs the Marketing Communications Committee. He was also a founding trustee of the Forum for People Performance Management and Measurement (affiliated with Northwestern University) and served on the board from 2000-2007.
Branding
Engagement Index Drops 15%, Luxury Brands Remain Strong
The 2009 Most Engaged Customers annual study, conducted by PeopleMetrics, reports a 15% drop in overall customer engagement, showing that companies are having a harder time engaging their customers. Luxury brands are best at engaging customers, but low price providers like Wal-Mart and Radio Shack are showing the biggest engagement gains since last year.
Despite discount brands making big strides, luxury still prevails. Brands like Ritz-Carlton, The Four Seasons, Cartier, Armani and Coach are among the top ten companies when it comes to customer engagement. These top-ranked companies respond quickly and effectively to service issues and understand the central role employees play in engaging the customer. For the most part, winning companies have fewer service failures, but the true differentiator is the ability to resolve problems successfully. Customers who feel their problem was handled well are nearly as engaged as customers who never had a problem in the first place (49% vs. 52%, respectively).
Top-ranked companies also outperform the rest by acquiring high percentages of customers through recommendations. The 2009 Most Engaged Customers study is the first to reveal that the power of recommendations extends past the initial sale. The study shows that a referred customer is more willing to forgive a service failure if they chose that company on the strength of a friend or family member’s recommendation. Nearly two in five customers who experienced a problem, and were referred, remain engaged. Conversely, only one in four non-referred customers remains engaged after experiencing a problem.
To download a free Executive Summary of the 2009 Most Engaged Customers Study, go to www.people-metrics.com
Industry Events
IRF Invitational Blooms in the Desert
The 170 buyers, 145 sponsors/hosts and 85 reporters, guests and event organizers in attendance at the 2009 IRF Invitational would seem to indicate rosier times ahead for the incentive industry. By any measure – but especially during these challenging economic times – the 16th Annual Invitational was a stunning success. Held May 13-17 at the Westin Mission Hills Resort & Spa in Palm Springs, the Invitational is the foremost fundraising event for incentive industry research, as well as a key networking opportunity for attendees. As usual, the Incentive Invitational’s two Roundtable sessions were well attended, offering registrants a chance to openly discuss issues of concern and importance. The first, Incentive Travel: Making the Business Case for the ‘New Economy,’ kicked off with some sobering words from IRF Chief Research Officer Rodger Stotz, who noted a few facts from the latest IRF Pulse Survey, performed in March and released in Palm Springs. “We’ve allowed others – the media, the government – to establish our brand,” Stotz said of the incentive industry, adding that when the survey’s respondents were asked how to best communicate the value of the industry’s offerings, the top answer was explain and educate about the value and return on investment of incentive programs. The second roundtable, 2009 – The Year of Change (and Adaptation) for the Incentive Industry, focused on adapting to the new realities of a changing marketplace and economy. One participant said he had been “meeting with executives I’ve worked with for 15 years to toughen them up,” and suggested reminding them that “those 20 people going to Monaco kept us from having to lay off 50 people.” Other conclusions included the need to educate without being defensive, the need to avoid the competitive bloodletting of a race to the bottom on price and the need to focus on educating procurement departments.
For more on the IRF and the Incentive Invitational, go to: www.theirf.org
Ammunition
Whitepaper Connects Engagement with Economic Recovery
One of the greatest opportunities to increase corporate profits – and subsequently boost the economy – lies in motivating workforces to improve performance, drive greater customer engagement and ultimately increase revenue, according to a new report from the Enterprise Engagement Alliance (EEA) and the Human Capital Institute (HCI). The Enterprise Engagement Alliance is a coalition of companies and associations dedicated to promoting the importance of engagement, founded last year by the Human Capital Institute, Peppers & Rogers Group, 1to1® Media and Selling Communications, Inc.
Entitled The Economics of Engagement, the report provides a comprehensive analysis of research in the field of Enterprise Engagement and offers how-to information on benchmarking tools that can quantitatively measure the benefits of employee and customer engagement. These measurement tools are critical to demonstrate the bottom-line impact of enterprise engagement, both to corporations and to the economy as a whole, using financial language that senior executives, investors and economists are accustomed to.
“One of the most encouraging findings of this report is the revelation that vast reserves of overall performance potential are essentially hiding in plain sight,” says Bruce Bolger of the Enterprise Engagement Alliance. “Engaging the people that companies deal with on a day-to-day basis – both internally and externally – in a comprehensive, compelling and connected way will create a result that is more than just the sum of its parts. Naturally, as with any such investment, the return needs to be demonstrated to decision makers, and there’s a growing body of evidence in the engagement arena that does just that.”
For a copy of the report, go to: www.incentivecentral.org/pdf/Final_Economics_of_Engagement.pdf
People
Hebert Named Social Media Editor at SCI
Paul Hebert, principal and Managing Director of I2I, an incentive industry expert and early practitioner of social networking and related engagement strategies, has been named Social Media Editor for Selling Communications, the Enterprise Engagement Alliance and its Engagement Strategies print and online information service. As Social Media Editor, Hebert will be responsible for helping to grow and engage the organizations’ targeted audience and identify, distribute and make available, useful content related to all aspects of engagement. Those interested in engagement across all audiences can opt-in via e-mail, RSS, Twitter, Linked-in, or at EnterpriseEngagement.org, the portal of the Enterprise Engagement Alliance which will go live in August, as well as through EEA’s Engagement Strategies print and online information service. In addition, Hebert will provide social-networking consulting services to SCI’s customers in both the field of engagement and other areas of business-to-business or business-to-consumer marketing.
Hebert is a pioneer in social-networking strategies, realizing early on that social-networking provides an ideal way for people to connect and keep each other informed about the latest news and developments in areas of common interest. His firm, I2I (http://www.i2i-align.com), provides engagement consulting services based proven motivational theory, behavioral economics and social psychology – enabled by technology - to companies seeking to increase performance by engaging key audiences.
“We believe that social-networking tools provide an ideal way for organizations to keep their customers and prospects informed about the latest developments in their areas of business,” said Bruce Bolger, president of Selling Communications Inc. “When you combine Paul’s passion for engagement and social-networking, we believe he provides our readers and customers an ideal means of keeping track of the latest developments in our field by pointing them to information coming from all credible sources.”
Enterprise Engagement can be followed through:
- Wikipedia – provides a definition and history of Enterprise Engagement can be viewed at: http://en.wikipedia.org/wiki/Enterprise_Engagement
- Linked-in – The Enterprise Engagement Alliance professionals group, where members can keep up to date with the latest links, news and research. Contribute, discuss and participate at www.linkedin.com/groups?gid=1926267
- Twitter –get immediate updates on interesting and valuable news and research at @EEA_Org
Education
Forum Announces October Think Tank
On Wednesday, October 14, the Forum for People Performance Management and Measurement at Northwester University will hold its 2009 Think Tank at the Union League Club in Chicago. The Think Tank will explore the impact the shifting economy has on the value of human capital. High-level corporate executives representing a wide range of industries and academics interested in researching people performance will gather to:
- examine how people performance strategies can have a positive impact on organizations
- create networking opportunities for individuals who have a shared commitment to strategies that support people in the workplace
- initiate a dialogue that allows participants to explore areas of interest and concern in order to accelerate resolutions and generate new insight
- focus on navigating people performance issues in this changing economy
Keynote speaker at the Think Tank will be Michael Lee Stallard, Co-founder, President and CEO of E Pluribus Partners, a consulting firm that specializes in helping leaders create “Connection Cultures” to form strong bonds among the management, employees and customers of an organization. Stallard, formerly Chief Marketing Officer at Morgan Stanley and Charles Schwab, is the primary author of the book Fired Up or Burned Out, and a contributing author to What Managers Say, What Employees Hear.
If you are interested in receiving additional information regarding this event, please contact Annalisa Jacobs at annalisa@performanceforum.org.
Trends
Major Firms Discuss Their Engagement Efforts
A recent study by Hay Group and WorldatWork confirms that the recent erosion of financial capital has led to a renewed focus on managing human capital, viewing employees as assets rather than just costs. Researchers found reward executives focused on the “here and now,” first getting labor costs aligned with the new economic realities, then preparing for future growth. The Reward Next Practices report revealed five key trends:
- From benchmarking to alignment. Firms have become less focused on what the market is doing and more concerned about aligning reward with strategy and performance. Amway International is trying to “find the right balance between employee motivation, cost control and market competitiveness in our reward programs.”
- Taking the employee’s perspective. Employee needs and wants are becoming more important as organizations seek to maintain motivation in a tough climate. According to McDonald’s Corporation, “We design our reward programs, invest in new programs and beef up current programs based upon the feedback we receive from our employees.”
- Strengthening ties between pay and performance. Organizations in the study are looking much harder at the design of short- and long-term variable pay programs. Comments from Heineken reinforce this: “We ensure that the objectives in our STI program are broad, simple, quantifiable and measurable and that they accurately reflect the key performance fundamentals of our business.”
- Total rewards. Employers are looking to intangible rewards in their quest to keep the workforce engaged when budgets are tight. Collective Brands plans to “provide much more focus on non-monetary forms of rewards and recognition. In tougher economic times, there will be a focus to provide recognition through non-monetary vehicles.”
- The key role of the line manager. As firms tighten their belts, they are realizing how line managers can help reinforce the pay-to-performance link and communicate the value of the reward program. Microsoft is looking for “better support for managers to be able to better explain the reward programs and how they link to individual and company performance.”
To download a copy of the complete 24-page report, go to www.haygroup.com
Research
Learning Executives’ Confidence Rebounds in 2nd Quarter
Learning executives are more optimistic than they have been in almost a year, according to the latest measurement by the American Society for Training & Development (ASTD). The Learning Executive Confidence Index (LXCI) for the second quarter of 2009 posted a significant rebound in all indices, building on the stabilization recorded in the first quarter of 2009. The current LXCI surveyed 193 learning executives about their expectations in four areas: impact on corporate performance; ability to meet learning needs; status as a key strategic component; and availability of resources. Learning executives revealed a more positive outlook in all areas, the first time in a year that index has risen. When the four different measures are combined, the overall LXCI for second quarter 2009 was 59.4, compared with 55.2 for first quarter of 2009. The 4.2-point change shows an overall rebound in optimism and indicates that collectively learning executives expect their learning functions to remain the same or marginally improve over the next six months.
To find out more about the LXCI, go to www.astd.org/content/research/LXCI.htm
Industry Insider
Internationally known handbag, luggage, stationery and eyewear company Vera Bradley is kicking off its corporate incentive and gift program, offering Vera Bradley merchandise to corporations and industry distributors for use as premiums, incentives and business gifts. As part of the new program, Vera Bradley will be working exclusively with Top Brands in Oshkosh, WI, who will represent them in the premium and incentive marketplace. Items included in the program will include handbags, cosmetic and eyeglass cases, travel gear, business bags and accessories….Boost Rewards, a division of Shumsky Enterprises, recently announced the launch of Boost on Demand, a program that offers company managers the ability to reward employees at the moment of achievement and provides an immediate trophy “token” to the recipient called Cogz. Cogz rewards carry points which are deposited into a reward bank by the employee once they achieve performance benchmarks set by their organization. Points can then be redeemed for products or other rewards. Boost Rewards has teamed with Amazon.com to provide incentive and employee reward fulfillment through purchases of Amazon.com sourced inventory and by leveraging their fulfillment services….David’s Cookies and Giftback.com recently announced plans to merge. Ken Schiliro and Harris Beber, co-founders of Giftback, plan to use their expertise to help David’s enter new areas of business with a strong focus on business-to-business sales, promotions, incentives, affinity programs and wholesale drop ship. Despite the merger, both businesses plan to continue to operate as separate entities, while sharing resources….Effective June 15th 2009, former Sony National Sales Manager James Beyer has joined Helix Global Solutions Inc.’s executive team. With 30 years of experience in the consumer electronics industry – the last 20 with Sony – Beyer has been very active in the Incentive industry, as both an active member of IMRA and IMA. He is currently in his fourth year as a member of IMA’s Board of Directors and second year as a member of the Executive Board, having served as Secretary and currently as Executive Vice-President. He can be reached at jbeyer@helixglobalsolutions.com.... Rymax Marketing Services, Inc. recently sponsored Samsung’s Four Seasons of Hope Gala for the fourth consecutive year. Samsung’s Four Seasons of Hope supports community-based foundations and charities headed by legendary sports figures. Donations from the Four Seasons of Hope Gala will support the Jimmy Johnson Foundation, the Safe at Home Foundation, the Boomer Esiason Foundation, the Arnold Palmer Hospital for Children, the Dan Marino Foundation, and many others….Chase Card Services recently announced the launch of Ultimate Rewards, available on Chase Freedom card and the new Chase Sapphire card. Cardmembers can view rewards activity, earn bonus points for shopping, redeem points, book entire travel itineraries and search for and reserve a restaurant through a single, comprehensive website that provides maximum simplicity and ease of navigation. Through its provider relationships, Chase is purchasing Amazon.com sourced inventory and leveraging Amazon fulfillment services….The Promotion Marketing Association has announced a major victory for the industry in a decision handed down June 2 by the United States Court of Appeal for the 9th Circuit. The Court reversed a lower court decision which had held that California’s Gift Certificate law applies to on-pack proofs of purchase issued by Philip Morris in connection with its Marlboro Miles loyalty program. The lower court held that the Marlboro Miles were gift certificates, and therefore should have had an expiration date printed thereon, as required under California law. If not reversed, the lower courts decision would have had far-reaching consequences for the promotion industry and the ability to offer loyalty programs where “points” are obtained through purchases of products.
