FEBRUARY 2009 ISSUE 1
MOTIVATION // INCENTIVES // PROMOTIONS // LOYALTY // RECOGNITION

Here we are in 2009 and already well through February, which sees the launch of our first issue of INCENTIVE BUZZ. This has evolved from our Motive8 newsletter and numerous requests to AD+INC for information on incentives.  We believe we can serve you best by combining the expertise from our two company's AD+INC and Motive8 with a monthly newsletter that will provide you with the latest insights into what's happening within the incentive marketing industry.

This year will certainly not be without its challenges and with so much doom and gloom everywhere you turn, we decided that the focus for this newsletter was to put some perspective on certain strategies and look at this time as one of opportunity. We have provided you this month with what we hope are some interesting insights that can be implemented in these challenging times and can positively impact on your business.

Each month we will focus on relevant news, trends and views from the incentive industry from Australia and around the world. To ensure this newsletter is as informative and relevant as possible we encourage you to provide us with your feedback and/or any questions by emailing us on info@ad-inc.com.au

Thanks for taking the time to read INCENTIVE BUZZ and we look forward to hearing from you.

Best Regards,

Angela Dillon
Managing Director
AD+INC

WHAT HAVE YOU GOT PLANNED FOR Q2?

For many businesses, February is when the year really takes off. New year strategies kick into action, and business demands focus on how to achieve 2009 objectives.

This certainly puts pressure onto managers with February being a short month. Before you know it, the end of the 1st quarter is here. Morale can quickly plummet if Q1 objectives are missed as the catch up in Q2 adds even more pressure to your team. 

Companies that launched incentive strategies during January to reach their goals are one step ahead as their expectations have been set and there is a clear commitment to reward those who perform – hence the motivation is there to perform.

It's not too late, and right now is the time to gear up not only for Q2 but also for the duration of 2009. There are two ways to look at it, sit on your hands, criticise the government over the economy and/or wait to see what’s next. Or you can think of January as a bit of a planning month, which revealed for some, what to expect and plan for in 2009.

The reality is that the reserve bank and the government have passed on five successive rate cuts since September last year, petrol prices are lower and now with $12.7 billion in bonus payments to middle income earners there is a lot of money out there.  Of course it is up to you as to how best to capitalise on these cashed-up consumers that are expected to inject funds back into the economy. What kind of motivation could you implement to draw benefits into your organisation?

First up is an understanding of how the market and the consumer are expected to operate when families and low and middle-income earners receive their bonus – where will the money be spent? Lets look at whats being spent:

• $6.4 billion in the housing package,
• $890 million for community infrastructure and upgrades; this money will flow through to all aspects of the building industry from the very large to the very small builders and all those that supply to them.  
• The individual bonuses of $950 for low and middle-income earners will no doubt filter through the retail sectors and the
• $14.7 billion allocated for building the education revolution package will certainly bring money back into communities.

This stimulus package is yet another form of incentive, although different to what we traditionally are used to. This is all about getting people to spend.  The key of course is how can you tap into it? So let's get off the doom and gloom merry go round and take a positive look at where funds are being released and what can you and your team do to tap into them. 

Don’t wait for Q1 to finish without planning a Q2 strategy. Planning will provide your organisation with the right opportunities to boost productivity and capitalise on those consumers that, if enticed well, will spend on your products or services.

SAVVY COMPANIES SAVE MONEY THROUGH INCENTIVES

How can companies cut costs and keep their employees motivated and in good spirits? This question is being pondered by many Australian companies currently.

Certainly there are many ways – it just takes a change of mindset. Some companies are in the planning stages or have already implemented strategies to address this issue.

The success of a business can easily be traced back to motivated and engaged employees. From productivity and profitability to loyalty and retention, hardworking and happy employees lead to solid successful companies which we know impacts in a positive manner on your bottom line.

So how do you cut costs in a positive way? More to the point, how do companies keep staff focused and motivated when in reality the message employees get from the media is doom and gloom. When a company starts reducing costs many employees ask themselves: are they letting staff go; will the next one be me? Indeed, no one should pretend that cost cuts don't send out negative messages. What we should focus on is how to turn cost cutting into a positive for employees and companies alike.

Although there may have been lay offs, projects put on hold or canceled, many companies have refused to look at this downturn in a negative way. Rather, the smartest, have figured out ways to adapt and recognise that it is now more important than ever to implement a strategy to motivate and promote a positive culture within their business. These companies have realised that these strategies can help them achieve not only their goals but instill a positive atmosphere within the organisation.

Smart companies are cutting costs by saving energy, reducing stationaries, travel or entertainment. They are doing this by communicating with their employees and getting them to come up with ideas on how and where money can be saved. Lets be honest they are the ones working in these areas on a daily basis.

The interesting thing is how to get the team on board and keep them in an optimistic proactive mood. For example, we have a company that wants to reduce their $2 million per year electricity bill, so a number of strategies that involve all employees have been developed to achieve a 15 per cent reduction. Tasks are allocated to individuals, teams and/or departments and on target achievement the company will pass on a percentage of the savings to the employees through rewards, team building activities and events.

What’s noteworthy is that this company understands that a positive culture and any cost reduction hinges on the participation and support of all employees and managers. 

So whilst incentive programs have traditionally been used in a sales environment they can be implemented in many areas of a business. It’s really about thinking outside the square and that's what we all need to do in this current environment. The challenge is not only cutting costs, but also rethinking the way we use incentives. Create a situation where the team feels secure and motivated and the company has a win-win solution that results in a cost reduction and an improvement to the bottom line at no additional cost.

IS YOUR GLASS HALF FULL?

The current economic environment has forced businesses to review all costs, with a view to reducing or eliminating where possible so that they may run in the most cost efficient manner.  Managers need to make decisions on where reductions can be made and some may put on their ‘not needed’ list incentive programs.

But before doing this, take a look at the long-term effects that this may have on your business.  Most businesses are in the same boat in regards to reductions, but those with the view that their glass is half full will see this time as an opportunity to gain market share.

Many businesses are battening down the hatches and reducing costs across the board. Generally trying to keep a presence, although reduced, in the market with some form of advertising.  This may be POS, mainstream advertising, direct mail, digital or a combination of all. These will keep their brand out in the market place but what these companies won’t be able to do is track its real result in terms of ROI and certainly won’t be gaining them market share.

The economic impact of an incentive is straightforward. There are low fixed costs to run a program and the variable costs are driven by performance. So it is very easy to see your ROI.  Another benefit of running effective incentives that have strong communication platforms is that your voice becomes louder and cuts through the clutter. This gives you the advantage to differentiate yourself and gain some valuable market share. 

This is particularly important when you have a distribution chain that you may not have direct control over. A well structured program enables you to speak to these people more regularly than your sales force call cycle may allow and position yourself with a real point of difference that impacts them in a positive manner.

Therefore this time definitely becomes a great opportunity for a well thought out incentive campaign that lets you be heard. By doing so, you can grab as much of the market by rewarding those on your front line that are influencing a purchase.

There is absolutely a place for advertising, as generally you need the push and the pull to gain maximum impact. In reality an incentive pretty much pays for itself, there is not much to be gained by reducing or eliminating them and when they go into the ‘not needed’ list the negative ramifications in the short and long term can be quite dramatic.

So make sure, when you are evaluating all areas that affect your bottom line, you can track your performance to results so that your ROI is something that you will toast with a half full glass!

If you have any news or feedback for INCENTIVE BUZZ, please email info@ad-inc.com.au Alternatively you can visit our blog www.employeeincentives.com.au