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 state of the incentive industry.

INCENTIVE: Are incentives coming back with the economy?

JOE KELLER, President and COO, MotivAction: I think it’s fair to say that the incentive industry is trending positively, but I also think it’s coming back with a whole new set of fundamentals that I’ve never dealt with before, and that I don’t know that anybody in this room has dealt with before. Clients are smarter than they’ve ever been and they expect more for less. Procurement is playing a much more significant role in every decision. If the CEO wants to use this supplier — what does procurement say? I feel very good about where we’re going. But again, it’s not exactly like we’re clearing a big hurdle from last year or the year before. We’re definitely on our way back, but we’re not where we were in 2007, before the recession. 

MIKE MAY, President, Spear One, and Trustee, Incentive Research Foundation (IRF): What is encouraging is the trend of sentiment, not even necessarily what’s really happening. Corporate America is amazing. They run in herds. They want to see who goes first. So, what’s encouraging is that increase in sentiment, and it’s a very positive year-over-year uptick. 

ANNMARIE MOLINELLI, Vice President, Marketing Manager, M&T Securities, Inc: From the end-user’s perspective, I think a lot of corporations are keeping a close eye on what others are doing. We started to see some corporations going on trip incentives or having some other types of [incentive] contests for their best people. From a corporation standpoint, you’re going to see a lot of people that will come out of the woodwork.

From an incentive standpoint, we’re definitely in the market. We’re starting to run those again. I also think that it takes a good educator to help management understand that things have changed — that it’s not ‘cash is king’ anymore. It’s what is going to get people more motivated, involved, and engaged; it’s all about behavioral planning. 

IAN O’BRIEN, President and CEO, GiftCertificates.com: What’s interesting is, especially with a number of our large clients, they’re looking to figure out how to become more enterprising in their incentives. Whatever the program was, they’re really looking to try and build upon it. Those are trends that set the foundation for continued growth in the industry for the coming 18 to 24 months. 

MICHAEL DOMINGUEZ, Senior Vice President, Corporate Hotel Sales, MGM Resorts International; Chair, Meeting Professionals International; and Executive Committee Member, U.S. Travel Association: I always like to say it’s relative. Compared to 2007, we’re not there, but compared to 2009, 2010, and 2011, we’re doing really, really well. I think there are a couple of facets, from an economic standpoint, that sometimes get overlooked: This recovery, unlike other recoveries, has been driven by efficiencies more than revenue growth. Traditionally, it’s the revenue growth that’s driving corporate America. That hasn’t been the case. It’s been ‘steady as she goes,’ which isn’t common in a recovery. I think that really impacts incentives. 

I always joke that when incentives fell off the face of the earth, [it was because] there was nothing to incent. There weren’t any revenues. There weren’t any sales. You’re starting to see that come back. But the sales look very different. Even your top performers look very different from how they looked during their peak years. 

From a bigger economic standpoint, we see that luxury has come back full force. You see it in retail. You see it in luxury hotels. It is the middle that is still suffering, and that has a lot to do with the 5 million people who are still unemployed that weren’t unemployed in 2007. So, consumer spending is a part of it. That impacts Corporate America. That impacts what we do, and I just don’t think it can be overlooked. So, I’m very positive about where we’re headed because, even with all that and all of the government issues, we’ve been able to continue to grow this economy. We’ve been able to move it and I think that’s a real positive, but there’s a lot of headwind.

PAUL GORDON, Vice President of Sales, Rymax Marketing Services: Actually, since 2008, our business has grown year over year. What happened is that people who downsized needed to reward people that were there. They needed to have peer-to-peer recognition. They needed to have programs in place to make sure that the good people stay, because good people are always going to find jobs, even in a tough economy.