Research

Incentive Industry Strength Indicator: Wait Until Next Year

By Leo Jakobson
November 12, 2012

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This summer, Incentive surveyed 85 C-suite executives, presidents, and vicepresidents to get an accurate snapshot of how the incentive industry is doing, what factors are contributing to it, and what high-ranking industry players are doing to improve it. 

The “2012 Incentive Industry Strength Indicator — Top Executive’s Viewpoint” survey found that while nearly half of the top executives who responded expect business conditions to remain about the same through the end of 2012, the rest are split pretty evenly on whether conditions will improve or worsen looking ahead. Slightly less than one quarter feel they will be better by the end of the fourth quarter, while slightly more than 25 percent think business conditions will be worse. 
That pessimism only lasts until the end of the year, however. By the end of the first quarter of 2013, a full 45.2 percent said they believe business conditions will be better than they are now, while 40.5 percent expect them to remain the same. Just 14.3 percent expect business conditions to worsen. 
  
One of those who sees business stabilizing in 2013 is David Gordon, president of Channel Marketing Group, a Raleigh, NC-based marketing consulting firm that works with manufacturers and 
distributors in the construction and industrial supply chain. Gordon, who is focused on channel partner incentive programs, says he believes the economy will get worse by 
the end of the year, but will stabilize in the 2013. 

Gordon says the most important thing that the companies he works with can do to improve their results this year is to make sure their incentive programs “reinforce that their programs are designed to take market share and ensure that they pay solely on incremental growth.” He adds that another key factor is “identifying how the program helps minimize margin erosion.”
Other respondents said that the best way to improve results would be to utilize the following strategies:
• “Praise my employees’ accomplishments and victories. Compensate them for their contributions as if nothing were wrong with 
the economy.”
• “Make sure your service and quality are the best possible. You can’t give anyone a reason to postpone or, worse, not to do business with you again!”
• “Continue to determine/analyze the return on investment (ROI) for incentive and engagement programs. If a program has a positive ROI, the C suite will approve it!” 

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