by Leo Jakobson | September 30, 2013
Every year, Incentive gathers a group of experienced professionals from every sector of motivation, engagement, and incentives to talk about the state of the industry. On June 20, 12 participants gathered at the Ocean Reef Club in Key Largo, FL, for some sun, sand, and serious conversation. Topics this year ranged from government regulation and return on investment to gamification and the return of luxury. 

What follows is a more detailed and extended version of that discussion regarding the tracking of ROI for incentives.

INCENTIVE: Are clients still serious about tracking ROI?

LYNN RANDALL, Managing Director, Randall Insights LLC, and Education Director, Incentive Research Foundation (IRF): I think it’s not a concern. MPI did a study a couple of years ago on the business value of meetings. Less than 5 percent of meetings and events are measured for business value. The IRF just completed a meetings and incentive integration study where we asked the same question. Over 85 percent of [the respondents] said, ‘didn’t ask/anecdotal’ — that ‘I just talk to people and I figure it out or I send a ‘smile sheet’ survey.’ It’s a sad statement, when juxtaposed [with the fact that] we are trying to make a case, at the government level, yet we don’t have any data because no one’s really measuring it. 

CLAUDIA DAVILA, Tourism Director – USA, Proexport Colombia: When I ask meeting planners, a lot of them tell me, why am I going to measure it? Do we really need to measure how people feel? 

RANDALL: I recently started looking into positive psychology as a field, and I’m in the middle of reading The Happiness Advantage by Shawn Achor — watch his TedX talk (http://www.ted.com/talks/shawn_achor_the_happy_secret_to_better_work.html) on happiness. He directly correlates productivity and business success to happiness, which is huge for us — that’s where the value is. It’s very difficult to get to that financial measure of ROI without factoring in the emotional impact and the behavioral impact that an initiative has, and how that ends up truly having a pretty significant impact on the bottom line. 

PAUL GORDON, Vice President of Sales, Rymax Marketing Services: The way that companies look at it really depends on what business they’re in. The pharmaceutical business is much more demanding in terms of measurement than, let’s say, a consumer products company. 

What makes it a little bit dicey for us is that people no longer stay in companies as long as they used to. When there’s a change of management in any organization, the very first thing they’re going to attack and cut are the [incentive and recognition] programs. They’re going to see it as fat. We’re always a target whenever there’s a change and new management. You have to really keep that communication going to show what the value is. You’re always vulnerable to attack from that standpoint.

I think once budgets are set however, it’s fairly easy to get a program approved, executed, and implemented because the CFO and the financial people have deemed that this is the amount of money we’re willing to spend. But the biggest thing that we run into, as a company, is risk aversion. You’re dealing with a lot of people who aren’t doing their homework when it comes to programs like this, and what really works and what moves the needle. At the same time, they are very afraid of what their exposure is as opposed to trying to see what the investment is in getting that sale or that lift. 

MICHAEL DOMINGUEZ, Senior Vice President, Corporate Hotel Sales, MGM Resorts International; Chair, Meeting Professionals International; and Executive Committee Member, U.S. Travel Association: The CMOs and the CEOs will be the ones approving to spend the money. We need to figure out how to get this type of research and its importance into MBA programs. Your future CMOs and CEOs are all working through their MBAs right now, and nowhere in their curriculum do we talk about the value of incentives or the value of face-to-face [meetings]. We as an industry need to figure out how we go to the academic world and say, ‘This needs to be a part of the curriculum.’ It’s a given. If they’re taught about this in school, it’s a given that when they get to the top, they know that we have to have incentive programs, and this is why. We have to have face-to-face meetings, and this is why. We’ve kind of missed that opportunity. 

GORDON: For anyone who’s ever worked his or her way up through an organization, and has ever experienced being involved in a rewards program and gotten a reward, it’s an easy conversation because they remember.

We have clients in the pharmaceutical and communications fields. They run year-long programs that culminate in events. It’s almost impossible for them to get away from these programs because they work so well. The people who sign up truly become competitive and they move the needle. They look forward to that teambuilding environment 

JOE KELLER, President and COO, MotivAction: I’ve never seen the pressure for ROI be more intense. Sure, once the budgets get approved then the money gets spent. But the tough part is getting it approved. Part of that process — the default, more often than not — is ‘it’s not worth it. Prove to me that it’s worth it and then I’ll approve the money.’

MIKE MAY, President, Spear One, and Trustee, Incentive Research Foundation: I think that’s the very reason we’re seeing a little bit of decline in discussion about ROI. We all agree it’s important. It’s an easy math exercise. But the challenge is the complexity of business — what is the variable that’s moving it? Is it an incentive trip or a contest, or is it the brand marketing? Is it the product marketing? Is it just great research and development that made the product great? It’s hard to isolate that variable. 

Maybe a better term for us to try to come up with is EOI, engagement on investment. We tried ROO, return on objectives, because a financial return on the investment is just so difficult to calculate. And that’s even before companies start reorganizing, or changing management teams. I mean, Dilbert once philosophized that the reason we have so many reorganizations is so people can’t measure results.

[LAUGHTER]

ANNMARIE MOLINELLI, Vice President, Marketing Manager, M&T Securities, Inc: I think everybody is spot on. Corporations are really looking at ROI. It’s super important as we plan ahead. Everybody’s looking to build a three-year plan that covers where we are today and where we are going.

I just experienced a change of management. We were lucky to have MotivAction build us a program last year, and we looked at it. Everybody still talks about it in the field. [Editor’s Note: M&T Bank’s Super Silvers 21 program was the winner of the 2012 Motivation Masters Award in the sales incentive category; you can read more about it here (http://www.incentivemag.com/Resources/Motivation/2012-Motivation-Masters-Award-Category-Winners/).] It really comes down to engagement. Engagement is key. We could have meetings today, we could have incentive trips, but is it one and done or is it engagement? Where they’re going to come back and still be the key players, and maybe get a lift out of the middle 70 percent.

Working with MotivAction to prepare a program like we did last year gave us huge lift. We haven’t seen a program that successful because we haven’t run like it one for probably seven years. This was the first one that we did, and it was huge. So [when we met] with the new management, we reviewed what we can do and what we’d like to do. Now, we’re back to the drawing board, building another program similar to it. It’s great because [the new management are] believers. They can see the success that came from it. And we’re actually building other programs to keep employees engaged. We’ve seen our percentages and increase on return on investment going through the roof. We’re excited about it.

I think it comes down to the experience. If you offer a really great experience, [senior management] is more than willing to come back. If you have engagement with their staff and their management team, how do you sustain that? You bring [the incentive program] back again. And do we [try to] see the same success or do we up the ante? Those are the three things that we focus on.