This June at the Sheraton Hotel & Towers in New York City, our magazine was pleased to welcome 10 esteemed members of the incentive market to discuss the trends, challenges and current issues of today's industry. Below are highlights from the dynamic discussion that took place, covering topics from broadening recognition programs to meeting the motivational challenges of Generation Y.

Who's Who

Dan Calabrese
Senior Director, Northeast Global Sales
Starwood Hotels & Resorts Worldwide

Joanne Cuddeback, PMP
Vice President, Practice Integration Director, Employee Engagement
Maritz Inc.

Paul Hebert
Executive Director
Excellence In Motivation

Jon Von Rentzell
Vice President, Enterprise Engagement
Carlson Marketing

Chris FJ Lynn
North American Sales and Marketing Director
Visit London

Terry Markwart
Director & Assistant General Manager, Special Markets, Consumer Imaging Group
Canon U.S.A.

Eric Mosley
CEO
Globoforce, Ltd.

Michelle M. Smith, CPIM, CRP
Vice President, Business Development
O.C. Tanner
President
Incentive Marketing Association

Patrick Sullivan
President
PRA Destination Management, NY

Spencer Toomey
Vice President
The Corporate Marketplace, Inc.


Industry Trends: Moving Beyond Salespeople

Incentive Magazine: What trends are you seeing in the incentive industry?

Michelle Smith: I think we are finally garnering some C-Suite interest in this marketplace and industry. Clearly, the research [industry organizations have been doing] validates that incentives and recognition are good for business and good for the bottom line.

In tandem with that, the trend toward companies aligning internal branding with external branding has gotten a lot of traction, and branding is a C-Suite issue for a lot of organizations. Sales and marketing people are out there making one promise to their customers, but are their people back in the home office and in the trenches making another? C-Suite executives have to make sure that their promise keepers are, in fact, aligned with that branding message. For so long they would say, incentives are about [our] top sales people. Now there is an appreciation that there are 300 people supporting those top sales people and if you have them engaged, you are going to increase your productivity and your sales revenue. And if you disengage that group, they can adversely effect your bottom line.

Spencer Toomey: If you talk to any of your customers, they know your company by the customer service rep they deal with on a regular basis. The salesperson may be in there once in a while, but customer service is on the phone with them everyday, sometimes multiple times a day. I think that is where the focus really needs to get to—those people who really are the face and the voice of your company out in the public.

Dan Calabrese: If you look at hotel companies [like] Starwood, our goal is not so much to be in the hotel business, but to be in the experience business. It's all about trying to deliver guest experiences that are different, better and special, that separate us from our competition. But if we don't have the doorman or the person in the parking lot being recognized, or incented on the local level in some way, then we won't be able to deliver that type of experience. Because it does, obviously, motivate and engage. It does create a higher engagement level.

I can tell you that it is interesting to see how motivated, not only sales folks, but other people within the hotel can become when recognized on stage in front of their regional leadership and the senior leadership of the company.

Globalization

Calabrese: Years ago, Starwood started a global incentive program that included sales folks, catering and convention service folks. And it has created greater collaboration across the globe for us. In global sales, we are working with global clients so now we have better relationships with our colleagues over in Asia-Pacific or Europe.

Joanne Cuddeback: There is an unusual element in the global workforce in that they are not always your workforce. We offshored and we have outsourced, so you have people representing your brand that aren't your people, yet you want them to perform as if they are. Oftentimes, especially in a call center, they are the people that have a very strong touch point with your customer, and how they represent your brand is critical. So having the capability to reinforce all of those people that are part of your delivery system is key. That's where the global reward and recognition tools become very effective.

IM: I have a question. From a global perspective, is the business that you folks have a result of U.S. companies incentivizing their employees that are abroad? Or are you actually conducting business with international companies through offices that are over there as well?

Cuddeback: Ours, at this time, is primarily U.S. multinational companies. So our client, our buyer is here, but their workforce and their sales force is around the world, so their need is global.

Jon Von Rentzell: The U.S. tends to be kind of an early adopter. Most [incentive programs] tend to launch out of headquarters here and head abroad.

Mosley: I would say yes. We have customers that we have won and launched in Europe as well as here. But there is no doubt that there is a different cultural engagement there. In the U.S. there is not half as much evangelizing about the industry and the effect it can have. Whereas in Europe, there is a whole preamble of teaching and education and evangelizing that has to go first. You literally have to change attitudes before you progress. When [an incentive program] launches, it is just as successful there as it is in here. It's just that you've invested an awful lot more.

Incorporating Gen X and Gen Y

IM: How is the emergence of Generation X and Generation Y in the workplace changing things?

Spencer Toomey: I think we have a generation that is going to be incentivized very differently than we even know now. When my oldest [child] started the college search, we went to one [university] where the president said to the parents, "I just want to let you parents know now that your sons and daughters that are about to start college next year are probably going to change careers—not jobs, careers—three to five times in their lifetime. And half of those careers don't even exist yet."

IM: Do you think that for this generation, it is more important to have that Internet program where they can get their rewards immediately without the fanfare of group applause? For them, does the immediacy of the award have more of an impact than that of peer recognition?

Toomey: Yes and no. They like the instant [gratification], but deep down they are still human beings who like to be recognized.

Paul Hebert: You were saying, is it going to be different for this group, are we going to have to find different ways to motivate these people or recognize them or get some sort of behavior? I don't think that the baseline ever changes. What manifests itself at the end of the pipe might…Maybe part of the reward process is that it automatically sends a posting out to their MySpace account so that all of their network is linked in. Is that any different than having a stand-up recognition event? Because in their world, that is their network.

Cuddeback: Of course, it will be great when they actually move in and take over this industry, then they can solve their own problems.

Legal and Regulatory Environment

IM: Is the regulatory and legal environment going to continue to have a major impact?

Von Rentzell: Certainly, I think all of us have to be aware of it and how the landscape changes. [Look at the] recent trend to provide wellness programs. You have to be aware of what the HIPAA [Health Insurance Portability and Accountability Act] guidelines are. [Incentive providers can say], "Okay, you know what, we will just play the incentive end of this engine. Then we will align with a health wellness partner in this space. We will let them deal with the HIPA issues." But when you really dig into it, often, in employee programs, the type of data you are dealing with [means] you have to become compliant. As our industry evolves, it is an issue we need to be aware of and constantly tuned to. Especially when it gets into the global side of it—all of the regulatory aspect are different country by country.

Besides, the reality is, the client will ask, "Well why do I need you? Why would I hire you unless you are going to bring me that expertise? You at least have to have some knowledge that you can share. If you can't literally be giving the advice, you help guide. That's how to approach it.

M. Smith: I think some of this regulation actually helps us. We have seen an uptick since [the Sarbanes-Oxley Act] of companies being a little less willing to do it themselves. Now they realize that there are challenges and that they should engage some expertise in to this initiative around incentive and recognition.

Merchandise: What's Next in Electronics

IM: In electronics, the line between products used for entertainment and business is blurring: For example, mobile phones with video, music and camera capabilities. Is this going to change the incentive merchandise industry?

Terry Markwart: It's already changing it. Customers who are buying digital cameras recognize that it's not just a camera to take pictures of scenery and people and whatever—I can take a picture of a new product that I have and I can e-mail it to whoever I need to send it to. All of a sudden, it becomes a great tool, it is a fast way to communicate.

Smith: The question is really, how does the incentive industry begin to offer them? You have products that typically would not have been considered awards, but what is happening now is that you have multi-tasking products and they are so cool. It is your phone that you are doing your business on, it is your PDA that you are doing your business on, but it's also going to be a video game console and a digital camera. It's a product that everyone wants. Do you just ignore it?

Mosley: I think one of the big changes in the last ten years is that consumers now already have everything. It's this instant gratification culture. Infinite choice is the key. The bigger issue is being able to change the catalog so that it can provide them the instant gratification that they can get elsewhere.

Gift Cards vs. Merchandise

IM: Gift cards have been booming for years. Are they starting to reach the saturation point?

Toomey: One could only wish.

Markwart: They went from zero to sixty overnight. Now we are hearing that sixty percent of the marketplace is gift cards. I think it goes to this instant [gratification] society again. You hand somebody a gift card, you know what? You don't have to think about it, you don't have to worry about returns, you just give it to them and off you go. Well, if that is the way that you are looking at your service award incentive program, maybe you are wasting your money doing an incentive program. Obviously, I am giving a very prejudicial point of view on that because I have always been on the merchandise side. But I think there is some value in giving them something that they will be able to hold and touch and remember you by.

IM: One of the arguments that we often hear from gift card people as to why gift cards are better than merchandise is that you get a guarantee that the recipient is going to buy something that they really, really want. I was wondering if merchandisers are trying to come up with ways to compete with that?

Markwart: What we have to do as manufacturers is create products that create excitement in the marketplace, and that will find its way here to this channel. [Canon has] done it with the Elph [digital camera line], Apple did it with the iPod. Sony had an MP3 player for years. But why did Apple come along and make something that just blew everything off of the shelves? It's styling, something unique and different.

Travel: Feel-Good, Extreme and Green

IM: What travel trends are you seeing? What do clients want now in a destination?

Patrick Sullivan: I have been a meeting planner for many more years than [I have run] a destination management company, when I first started in the business 18 years ago, it was all about sand and sun and beach Olympics. But the young people that are out there in the sales force and working for employee incentives, those are the ones that we have to start thinking about, how do we gear our markets towards these people? The thirty-, forty- and fifty-somethings love the spa. But the twenty-somethings, they want to go paint an orphanage, give something back to the community—and that's the new buzz word.

Chris Lynn: To your point of the experience, London has always been renowned for theater and cultural aspects. But it's being taken a step further, so rather than just going and watching a play, why not get to meet with the cast afterwards? They want to remember having a chef class with Gordon Ramsey—probably with a hard hat.

What we are seeing with London—one of the original incentive destinations—is to a degree we have had to reinvent ourselves, because people that have been there and done that. Who would have thought that rather than visiting Big Ben, for example, [incentive groups are] now doing speed limit races down the River Thames, James Bond style.

IM: What about extreme sports and activities?

Sullivan: When European incentives group come here, they come to us and say, "Well, we don't want a tour. We want activity, we want to have challenges. And we just most recently did this with a [European] cell phone company, they wanted true activity. Rowing the Hudson River and doing the trapeze school [on the New York City waterfront]. Yet the American groups' planners and companies won't allow their people to do this. We are much more concerned about liability issues in the U.S.

IM: Are environmental issues important?

Lynn: There are hotels that are promoting green issues and have a whole green process built into them in doing that. Actually it's more of an emotional point that people ask about. Until the dollar finds it feet, that's a bigger issue to me than the green issues. But absolutely. [London is making its 2012] Olympic Games the eco-friendly games.

Calabrese: As far as environmental concerns, I think hotel companies are certainly more proactive in their approach to developing new products and re-imaging products. You get no smoking. You look at hotel companies—we're one of the them— that have a new brand that will be an entirely green hotel experience. Companies are defining their brands by core values and finding signature services that bring them to life.

Up and Coming Destinations

IM: What are some destinations you are excited about?

Calabrese: I would say Beijing, China, India.

Smith: Dubai. [As for gaming destinations], if you build it they will come. It's just amazing that there is such an appetite and it continues to grow. And the casinos don't seem to be cannibalizing each other. We have not reached the saturation point by a long shot.

Sullivan: Having just been to Poland, I was quite amazed how the eastern block countries are really going towards tourism [and] how they are trying to attract the meeting and incentive business. And the quality and the service level is coming up and that's amazing.

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