IN THE EVER-CHANGING WORLD OF INCENTIVES, one thing is constant: “Companies will always use incentives to change the way people behave,” says Jim Bufton, vice president of sales and marketing for Top Brands Inc., a premium company based in Oshkosh, Wis. “They'll use merchandise to try to make their customers change their brands, to keep their employees accident-free, and to get their sales reps to sell one insurance policy over the other.”
That said, Bufton has seen great shifts recently in the merchandise side of the incentive business. And by keeping with the trends — or ahead of them — Top Brands has been able to stay in the game.
Here are five of the major ones:
- A NEW BREED OF WINNER — A NEW KIND OF SUPPLIER
Just as corporations have become more global and winners' tastes have evolved, merchandise incentives have had to become more sophisticated.
In order for incentive companies to stay competitive, they are going to need a global network of incentive suppliers, explains Michael Arkes, president of Hinda Incentives, Chicago. “We did an incentive program for a financial services company that had multiple audiences throughout the world,” says Arkes. “Now, we can give a Simpson washer and dryer to a winner in Singapore, and food and wine to winners in France. Basically, we want the correct type of product, with local delivery and local customer service.”
Suppliers need to evolve to serve this new, more global, more sophisticated winner. For example, says John Jack, senior vice president of Minneapolis-based BI Worldwide, “Not only do we have Web-based catalogs, but we produce a series of merchandise catalogs — seven to eight different merchandise offerings in print. We even have an Internet auction site, Q-Bid.”
- MORE PAT-ON-THE-BACK AWARDS
Allison Wooten, premium sales manager of All Star Incentive Marketing in Sturbridge, Mass., reports growing use of spot awards. “We're seeing the biggest trend is peer-to-peer recognition, for those who go above and beyond,” she says. “These are discretionary awards that employees can give to other employees they work with.” She also reports that companies are asking for products from $25 to $100 in value “that can be given to employees as a ‘thanks for being a great team player’ award.”
- GIFTS THAT GIVE BACK
Not only are more companies choosing to give indigenous products as teasers and pillow gifts when they hold a program at a particular destination, but they're also choosing items from local companies that are making a difference in their communities. For example, Chicago's The Enterprising Kitchen (www.theenterprisingkitchen.org), a company that employs welfare moms, makes soaps and other bath products. Philadelphia's Jubilee Chocolates (www.jubileechocolates.com) supports school garden projects to increase access and awareness of healthy foods for urban schoolchildren.
- CUSTOM PRODUCTS ON THE HORIZON
In the past, award winners who redeemed products for a certain number of points could easily go to retail stores and see what their item was worth. Jim Feldman, president of James Feldman Associates Inc., Chicago, believes that in the future, merchandise vendors will focus on custom or exclusive products. “This is so winners cannot quickly identify the worth of the award,” he says. “If they can't readily see the value, they are going to accept the value that has been given to them.”
- PROBLEMS WITH CASH ALTERNATIVES
Feldman considers stored value cards to be “a fad that's fading. They're not that popular anymore, because companies are realizing that the slippage, cost, and convenience of these cards aren't any better than cash in many cases.”
Also, recent lawsuits brought by St. Louis — based Meridian Enterprises, a company that patented the stored value card (MeridiCard), are expected to increase the cost of cards offered by those incentive companies, including Carlson Marketing Group, that lost in court.
Even gift certificates have lost their luster, Feldman says. “Companies are tired of paying more than face value for the certificate. If I want to give out a $100 certificate, I have to pay $2.50. That adds up in a big program.”
Whatever you want
A recent program for Sharp Electronics' salespeople let winners choose what they wanted — anything. And choose they did: One winner had a deck built on his home, another had new aluminum siding installed, and another chose a horse trailer — along with a new horse!
The program was facilitated by InMarketing Group, a Mahwah, N.J. — based incentive company that specializes in online programs. “In addition to our regular online catalog, we have a personalized shopping service where participants suggest items they would like. We do some research and get them for the participant,” says David J. Weiss, president.
“Over the last few years, people are earning a lot of money in points,” he says. “It's not uncommon for someone to have $30,000 to $40,000 worth of points, and they are looking for unique ways to spend it.”
Merchandise grows up
THE HOT GIFTS
CD players PlayStations laptop computers
flat-screen TVs MP3 players iPods