Feature Article - July/August 2011

Incentive Evolution

What's New in Sales Incentives?

By Fred Jerant

Long ago, a sage remarked, "The only constant is change."

That certainly applies on a grand scale. Economies grow and contract, geological forms shift over time, political alliances form and re-form.

But change occurs on a smaller scale, as well. Even incentive/awards programs evolve, sometimes in large ways, sometimes in small ones.

In the crush of daily business, it's tough to keep up with the latest thinking in the field of sales incentives. That's why PIP invited several industry leaders to discuss the topic.

What's New?

So what's new in sales incentives? Quite a bit, actually. For starters, international group travel rewards seem to be coming back.

"For about a year, this kind of program suffered from what I call the 'AIG effect.' That was some fallout from the bailout," said Scott Siewert, vice president of sales at USMotivation in Atlanta. When the public learned that, despite receiving billions in public funds, AIG seemed to maintain a lush incentive program, there was considerable backlash.

"Companies became reluctant to implement flashy incentive programs," he continued. "Some kept them to a low profile, by referring to them as 'President's Club' trips or something similar. Others scaled back. Instead of a flight to Paris with dinner at the Eiffel Tower, the award became a trip to South Beach.

"The good news is that companies are coming back to offering substantial-destination award programs," he concluded.

That seems almost counterintuitive, doesn't it? Not so, Seifert said.

"Over time, a lot of the stigma has faded. People have moved on to other things. Plus, there are no more free lunches in incentives," he explained. "Performance metrics are commonly CFO-certified, and those officers are involved in decisions about the programs. Sales reps aren't going to Paris just because they sold four widgets. Now they have to sell 4 million. Executives are more aware now of the need for better incentive governance and cost-justification."

Demographics are playing a role, too, said Thomas Wessling, executive vice president of business development at Performance Plus Marketing in Roswell, Ga. "When you are working with members of Gen X and Gen Y," he said, "rewards must be more reflective of their core values. There's no sense of rampant consumerism."

One of those values is an endorsement of the corporate social responsibility (CSR) concept.

Melissa Van Dyke, president of the Incentive Research Foundation, St. Louis, said that IRF's last polling survey indicated that more than 70 percent of respondents sometimes or always receive requests for CSR-related awards programs, "and that's a trend we're tracing closely," she said.

In terms of travel, these can include "helping hands" events. Participants travel to an elite destination, and then engage in an activity that benefits others.

"For example, one group of attendees arrived at their locale, and was given a box of parts with instructions to assemble them," Van Dyke said. "At first, they didn't know what it was—but they gradually realized they were building prosthetic limbs for landmine victims."

Wessling also cited the case of a young employee who had already used all of her vacation time, but asked for additional time off so she could volunteer for a disaster-relief effort. He said the company not only granted the extra leave, but also paid her for it, and then gave her extra personal days to decompress from the experience and prepare to return to work.