by Leo Jakobson | July 26, 2016
Dittman Incentive Marketing will celebrate its 40th anniversary with a new name that better reflects the solutions it provides now. 

On Aug. 1, the New Brunswick, NJ-based incentive and recognition firm will rebrand as Next Level Performance, a Dittman Company. The goal, says Jim Dittman, its founder and managing director, is to better reflect the changes the industry has undergone in that time. Here are his thoughts on where incentives have been and where they are going:

What was the incentive business like in 1976? 

[Incentive houses] created programs for one purpose: to motivate salespeople to sell more and dealers and distributors to buy more. Incentive merchandise programs had been in use for many years, but incentive travel was still in its infancy. It took a dedicated, passionate group of people who started the Society for Incentive Travel Excellence (SITE) to create an awareness of incentive travel as a powerful management tool that generates extraordinary results. 

What are the biggest changes to incentive sales and channel sales program strategy? 

On the sales force side, the focus 40 years ago was primarily on the top 5 to 10 percent -- getting more from those who are [self-motivated]. 

Thirty-five years ago, I wrote a column suggesting that the real growth comes from "moving the middle" -- motivating the people just below the top performers. Do that, and the top tier will also move up because it is in top performers' nature to always be the best. The idea is now an operating principle in many sales incentives. 

As far as channel programs, it was a widely held belief that "a man is loyal to his inventory:" dealer-loader programs tie up a dealer's capital and forced him to sell your product. Now, dealers and distributors demand that you partner with them by helping them to sell through [to their customers]. Additionally, consolidation has created many distributors who are so large and powerful that they insist on running their own incentive programs with manufacturers' marketing dollars.

Broad engagement and loyalty programs didn't really exist 40 years ago. How have they changed the workplace, and the incentive industry?

When you have a recognizable company name with 40 years of built-up equity, you don't change it casually. The change from Dittman Incentive Marketing to Next Level Performance reflects the broadening of the products and services we provide our clients. 

The "do this/get that" nature of incentive programs -- usually tied to sales goals -- is just one segment on the motivation spectrum. To really deliver on the brand value, it takes the efforts of every member of the workforce, from the newest call center employee to the top leader in IT. A long-overdue realization by management that every person in the organization affects the Total Customer Experience has made it clear it is necessary to motivate, recognize, reward, and engage the entire organization. The very best sales incentives will not work over time if the customer experience disappoints or the quality of the product isn't there. 

Constantly evolving technology, new competitors in a global marketplace and the velocity of change have forced leaders to recognize that the only enduring competitive advantage they can hold onto is an engaged, quality workforce, which produces an engaged and loyal customer base. The war for talent will be won by companies whose values inspire their people.

You've won 13 SITE Crystal Awards. How has incentive travel changed from the first to the last?

What's changed? The sense of wonder and awe is harder to achieve. People have been to many of the "faraway places with the strange-sounding names" -- and nothing in the world is far away anymore. 

What's the same? Travel continues to rule as the ultimate motivator. Young people want to see the world. Place travel in a soundly constructed incentive program, with the golden thread of recognition running through the experience, and you can produce exceptional results. You are linking personal aspirations with your brand and your program, and that's a powerful motivator.

Is it harder to "wow" people on incentive trips now?

In one respect, it's harder; in another, it's easier. As more and more people earn and experience travel, they can become blasé -- "been there, done that." But as more companies come into the [incentive travel] business, claiming to be practitioners without ever learning how to apply imagination to the creation of the travel experience or special touches in the delivery of it, it is easier for real professionals to stand out in a crowd. It takes specialized knowledge to manage the logistics, to connect to the brand, and to craft flawless individual experiences for often hundreds of guests.

Looking ahead, what are some changes you foresee? 

Predicting the future is risky business, but I do believe in the continuing evolution of some trends that have begun:

1. In sales incentives, qualifying rules that focus on sales processes as well as quantitative results.  
2. In channel partner incentives, the expansion of "pressure-point" motivation programs that integrate rewards at each step of the distribution chain.
3. In enterprise engagement programs, the use of data from the recognition software platform as a tool by human resources for people performance management and measurement.  
4. The increasing adoption of social recognition by organizations that prioritize their human capital and understand that momentum is generated by involving the entire organization in the practice of recognition. 
5. The expansion of experiential rewards.
6. In talent management, the increasing emphasis on retention, as Baby Boomers retire and Millennials gain experience.

Gift cards have been around for a while now. Looking back over the last decade or so, have they proved to be as effective an award as merchandise?

Gift cards have proven themselves. As an incentive "purist," I dislike the fact that they are earned, used, and forgotten. They should NOT be used in lieu of other forms of rewards, but can work effectively in a points program as one of the award choices, especially when the earning potential of some participants is not that high. 

There is a very engaging element in the immediacy of electronic gift cards, where a participant can redeem points for an e-card in the afternoon and take his or her family out to dinner that night. It's a feature that keeps a program at the very top of mind.

Has the industry made a real dent in the idea that "cash is king" over the last four decades?

We have made progress in deflating the "cash is king" argument. In fact, the Incentive Research Foundation recently reported that in 1996, only 26 percent of companies were using non-cash awards, but in 2015 that number had jumped to 84 percent. 

Even though research clearly shows that it is not as effective, in a choice between cash and tangible [non-cash] rewards, too many program owners still believe that money moves people. 

One reason we don't hear the that argument as often is that the cash camp can now go to gift cards as the next best thing. The underlying danger is that when gift cards are the only form of reward in a program, everything is equated in dollar-for-dollar terms, so in the end it really is nothing but cash. We still need to educate some in the buying community that there is a top 10 list of why cash is not in their best interest, either as a motivation tool or a long-term engagement solution.

How have merchandise awards programs changed? What's stayed the same?

What's changed is the greater importance of awards matched to a multigenerational audience, the speed of award delivery, and the branding of the delivery moment. Also, the more recent preference for experiential rewards has changed the landscape at the higher end of the merchandise rewards ladder.
What has remained the same is the fact that most people will be moved to action by competition -- when the trophy takes the form of a tangible object that they desire.

Are Millennials really different, or will they mirror Gen X and Boomers as they get to later stages of their life (have children, buy a house, etc.)?  

All generations begin with the excitement of radical, world-changing ideas that, over time, are tempered by reality and each person's adjustments to their self-view and worldview. Thirty-five years ago, Gail Sheehy wrote a valuable book called Passages in which her research showed that we all make "values calibrations" about every seven years, which is why none of us is the person we were a decade or more ago. Millennials will find the same is true of them. 

Research shows that every generation entering the workforce in the last 100 years has been met with frustration and skepticism that fades as newer workers learn the ropes. All generations value meaningful work, career opportunity, recognition for a job well done, and balance between work and home life. The relative importance shifts as our lives change, but our essential drivers are not so different across generations. 

Millennials outnumber other generations so the impact of this generation's priorities will affect workplace culture in ways that benefit all workers, including tolerance of differences, greater awareness of options in life and in business, and a greater expectation of recognition at every turn. They also demonstrate less long-term loyalty to an organization unless that organization shares their values.