In tough economic times, it's easy to cut budget items that aren't perceived to directly drive sales. Typically, that starts with employee engagement programs like rewards, recognition and incentives. Yet there is a relationship between happy employees and happy customers: employee loyalty and customer loyalty. Employees who are well cared for take great care of customers, creating a better customer experience that drives word-of-mouth referrals and revenue.

So what can you do to safeguard your programs in tough times?

1. Tie incentive programs to the bottom line. To drive business results, ensure that programs link employee and partner behavior to key performance metrics that matter to customers and the business. Whether it's sales quotas, retention, quality of service or other measures of productivity, move from nomination-based programs to those that reward individual and team behavior. There's a much more direct bond to the bottom line when programs measure and reward tangible results against goals. That's not to say attendance, good standing and embodying company values aren't important. In fact, those are great measures for eligibility to earn rewards based on performance.

2. Spend your organization's money wisely. I always operate incentive programs under the philosophy of creating an experience that participants wouldn't otherwise get on their own—a private concert, a behind-the-scenes tour or exclusive access at a theme park. That way, the reward is something they will remember and talk about with coworkers, creating word-of-mouth buzz and motivation to improve performance.

Spending doesn’t mean writing blank checks. Instead, challenge yourself to cut your own budget by 10 percent, 20 percent or more, depending on your organization's health. Achieving the same or better results with less will earn your leadership's respect along with greater degrees of freedom within your programs. Besides, it's always better to find cost savings than have someone find them for you. Here are some suggestions to consider:

• Eleven is the new 10. Raise the bar on the performance for which you incentivize. Regular increases to the performance scale encourage participants to strive higher while reducing payout amounts.

• Renegotiate contracts with vendors, hotels and travel providers, who are facing the same economic slowdown. Booked business for suppliers, even at lower-profit margins, is better than empty banquet space and unoccupied rooms due to canceled programs.

• If your incentives team operates independent of your corporate travel team, ensure that you are maximizing your purchasing power and leveraging volume discounts. In many organizations, teams don’t collaborate, resulting in air travel and hotel rooms purchased for a reward program not getting credited under broader corporate contracts. Make sure your travel spend gets the credit it deserves, and that any associated rebates go toward your incentives budget versus a corporate fund.

• Make small cuts that add up but go unnoticed by participants. On award trips, leverage refillable water bottles and dispensers rather than bottled water. It's cheaper and promotes eco-friendly practices. Provide two drink tickets per guest versus an open bar to limit alcohol consumption and save money. And select second-tier destination cities to save on hotel room costs (e.g., Myrtle Beach instead of South Beach, or Orlando in May instead of February). Be sure you don't lose such savings to additional air costs in reaching less-accessible destinations.

3. Stay true to your company's brand. If you are the value player in your industry, make sure your incentive programs reflect it. If you own the "green" field among your customers, ensure your efforts reinforce environmentally friendly practices. If you are striving to be a leader in service, overwhelm your participants with service so that they do the same for customers. By living your brand promise in your incentives, you cast a shadow of the behavior expected with customers and show senior leadership that your programs are aligned to the company's vision, strategy and goals.

4. Stay nimble and evolve with feedback. Solicit feedback from leadership and participants to ensure ongoing relevance of your incentive programs. Stay up on trends through industry associations, publications, blogs and social networking sites. Proactively implement program changes that yield greater ROI, reduce cost and reinforce your brand.

5. Promote the success of incentive programs. Share the ROI and impact on business results with leadership to create your own positive press. Take advantage of industry awards to gain external recognition for your programs. And share best practices and successes with peers internally and in the industry. The more others see your role as a thought leader and expert, the more valuable you will be to the organization and the more your programs will be valued.

Remember, tough economic times don't have to mean tough times for incentive professionals. By tying incentives to the bottom line, spending company money wisely, constantly improving incentive programs and staying true to the brand, reward and recognition professionals can demonstrate how their programs drive business results and a strong return on investment—both of which are valued regardless of the state of the economy.

Greg Perotto is an integrated marketing, communications and incentives leader. He has worked for T-Mobile and can be reached at www.linkedin.com/in/gregperotto. This page is protected by Copyright laws. Do Not Copy