by Leo Jakobson | March 18, 2013
While there is some optimism that business conditions will improve over the course of 2013, top executives who run incentive programs are still expecting this year to be dominated by political uncertainty and scaled-back programs. 

Incentive's "2013 Top Executive's Viewpoint IQ" survey, conducted in February 2013, queried readers within the C-suite and those with president and vice president titles to get a snapshot of how the incentive industry is doing, what factors are affecting it, and what high-ranking industry players are doing to improve it. A total of 43 executives responded.

In the short term, 37.2 percent of those executives predict that business conditions will improve by the middle of this year, compared to just 18.6 percent who feel that they will be worse. Forty-four percent predict that business conditions will have improved by he end of the year, while 23.3 percent feel they will have gotten worse. In last year's survey, which ran in July 2012, the predictions of better or worse conditions at year's end were tied at one-quarter each.

One of those predicting worse conditions is an executive in California's high-tech industry. To combat those conditions, he says, "We should get in front of our customers and prospects with two objectives: retain our existing customer base and grow market share."

The percentage of executives who saw low budgets as the factor having the greatest impact on their ability to engage employees, sales channel partners, and consumers dropped to 14 percent from 21 percent last year.

The two factors having the biggest impact this year were uncertainty about the U.S. economy and a loss of confidence in U.S. political leaders. Nearly 42 percent of respondents cite American economic uncertainty as a main factor, compared to 32 percent last year.

Given last fall's tough election and an increasingly divided Congress, the number of executives who cite loss of confidence in U.S. political leaders as the No. 1 impediment to employee engagement nearly doubled from last year to 32.6 percent. While global economic uncertainty was a major concern in 2012, cited by nearly one-third of respondents, that number was just 11.5 percent in 2013.

One result of this uncertainty, according to executives, is a substantial refocus of incentive programs on consumers at the expense of in-house sales programs, compared to last year.

When asked which segment of their employee and consumer incentive and engagement strategy they consider most mission critical at this time, 36.9 percent of respondents said consumer incentives, compared to just 18.4 percent who selected in-house sales programs. In 2012, only 24 percent said consumer programs, compared to 29.1 percent who were focusing on employee sales incentives.

"I think that we should be focusing on consumer retention so that we can hang on to the existing business that we have," says one respondent. "Put a clear plan together with those clients and follow through with all the different types of contacts we make."

Channel sales programs remained relatively stable, while non-sales programs dropped to 15.8 percent from 20.3 percent.

"Build confidence with the employees to encourage them that business is/will be getting better in the second quarter," says a proponent of non-sales employee programs. "Provide an incentive for superior work and attitude toward the company, the customers, and fellow employees."