YOUR BABY'S UGLY

Forget the Lunch, Your Staff Would Rather Be Recognized with Something Else!

noreply@blogger.com (Ley Borlo) — Tue, 29 May 2012 11:30:00 +0000

It’s always fun to look at research that shows us the views on certain subjects from a management perspective and then from the staff. Often these views are very dissimilar begging the question does management really know what their staff is thinking?

The following is a recap of a recent study conducted by OfficeTeamin conjunction with International Association of Administrative Professionals. While it looks like everyone is pretty much in sink, don’t let the close numbers fool you. Working in tenths of percentage points can mislead you. There are a lot of misconceptions of the bosses out there about what their staff really wants.

In this survey, the question for administrative professionals was simply “On a one-to-five scale, how much do you value the following types of recognition? Managers were asked, “What forms of recognition do you believe administrative professionals value most.

A recap of the answers (in ranking order by administrative professional responses) is as follows:

Reward	Administrators	Management
Boss relates your achievement to senior management	4.47	4.19
In-person thank you	4.47	4.16
Promotion	4.46	4.45
Membership in a professional association	4.32	2.45
Registration in a business conference or seminar	4.29	2.63
Paid time off	4.21	4.26
Handwritten personal thank you notes	4.07	3.74
Cash	3.99	4.27
Recognition at staff meetings of company newsletter	3.85	3.83
Award nomination	3.76	3.51
Recognition on Administrative Professionals Day	3.74	3.22
Gift cards	3.67	3.99
E-mail personal thank you	3.58	3.25
Lunch	3.08	3.67

Some observations:

· Interesting to note that having your achievements related to senior management and a personal thank you was on a par with getting a promotion. Frankly we had a hard time believing this, but as long as this is the case, it would surely be easier telling upper management how good your people were performing than to have to promote them. Or does it mean that many don’t want promotion, that they’re satisfied where they are?

· The largest deviations between staff and management were in joining a professional association and registration in a business conference or seminar. Our guess is that management does not put much stock in these two things; we guess they see these as more work related.

· The only tangible awards mentioned were cash or gift cards, and they were close to each other in how they were valued…gift cards are the #1 award in the recognition industry which obviously correlates to this finding.

· It is surprising that traditional recognition merchandise awards or plaques, trophies and the like were not present in the responses…this most likely gets into how they asked the question. By sheer numbers, plaques and trophies have been used as a staple in recognition for years.

· It would seem that managers would rather go to lunch more than their staff…but only a little more. Could be that the staff doesn’t really want to be around the manager in the first place!

Bottom line is are you doing enough to recognize your staff and are they satisfied with the type of recognition they are receiving? Many of the values listed here by the administrative professionals (actually more than half) don’t require any or much money to implement. Your staff can get a great deal of personal satisfaction out of some vey common sense things that you can do.

And, if gift cards are a part of your overall employee engagement process, you might want to check out AwardofChoice, the only no fee gift card award system in the industry.

Employee Recognition Will Drive Success - Why Don’t We Use It?

noreply@blogger.com (Ley Borlo) — Tue, 22 May 2012 12:00:00 +0000

More and more research is showing us that employee recognition programs produce results. As mentioned Incentive Magazine, one survey showed that non-cash reward and recognition programs have annual revenue increases averaging 9.6% vs. just 3% for all other companies.

Yet, the majority of companies seem to heed the data, or at least their management doesn’t understand how important recognition can be to the company’s success. A recent survey conducted by OfficeTeamin collaboration with the InternationalAssociation of Administrative Professionals looked into how administrative staff viewed employee recognition.

Some interesting findings include:

· Forty-two percent of support staff said their supervisor fails to recognize them even on Administrative Professionals Day^®…you’d think if there was one day that managers would remember this is the one.

· Thirty-three percent said that they receive "not enough" or no recognition throughout the year…that’s just management being lazy!

· Two-thirds of administrative professionals would leave their current position if they did not feel appreciated by their manager….unless you don’t mind losing them, why would you take the risk?

· More than 70 percent of support staff said that an organization’s recognition programs would factor into their decision to accept employment with that firm….it’s just good hiring fodder.

· Twenty-five percent of managers surveyed said they never ask employees if they are satisfied with the recognition they receive…what are they afraid of?

· Support staff wants managers to be specific when giving recognition. Fifty-five percent of respondents said the feedback they receive is merely "somewhat specific" or "not very specific”…if they don’t have the time to do it right, do don’t it at all. Poor recognition is often worse than none at all.

· Challenging assignments and a feeling of accomplishment/satisfaction are top factors that motivate administrative staff to do a good job…take the time to develop and challenge your staff.

Implementing a well-designed employee recognition system does take some effort and time. It also takes a budget commensurate with the results you are trying to achieve. Those results can provide an ROI dramatically greater than the cost and the effort expended.

Because of the tough economic times, there will continue to be negative pressure on recognition budgets. But now is not the time to hold back. Retention of your best employees will be critical to your future success. Recognize their performance now! It could be the one thing that keeps them on the job when the business climate changes.

Non-Cash Incentives- More Popular Than Ever

noreply@blogger.com (Ley Borlo) — Tue, 15 May 2012 11:56:00 +0000

For as long as we can remember there has been a strong argument from many in the corporate world, especially in the C-suite, about non-cash v. cash incentives. They almost all felt that cash was the only award to use to improve performance, especially if they were using large budgets. They were so sure, that the vast majority of Compensation and Benefits Manages when confronted with an issue to improve performance, almost always thought of cash as the award to use. Many HR and Sales managers disagreed, but when push came to shove, the financial executives always seemed to get their way.

While many organizations did use non-cash awards like gift cards, merchandise and travel to accomplish specific short term goals, cash was still the king. The incentive industry vainly tried to convince companies to use non-cash, but it always seemed to be an uphill battle. Over the years incentive companies weren’t armed with any data or analysis to support their argument. They used philosophical arguments from behaviorists like Mazlow, Hirshberg and Skinner, when competing forces in the companies wanted cash. It was a tough sell. Until now!

The best part of what is happening today is that the data being published is not coming from the industry but from giants in business world like McKinsey & Co in conjunction with the Harvard Business Review, The Aberdeen Group and Price-WaterhouseCoopers, and World at Work compensation and benefits association.

In the last year or so, several studies on the subject have been published. While the research doesn’t specifically cite travel, gift cards or merchandise, they do speak of the same types of motivational techniques such as recognition and about showing appreciation, all great vehicles for non-cash incentives.

Conclusions from a few studies were:

· Pay-for-performance has not been effective as the expected

· Performance management in sales found that organizations that used non-cash spiffs outperformed the ones that didn’t use them.

· Best-in-class firms were more than twice as likely (21% vs. 10%) to use non-cash incentives as industry average or laggard firms

· Year over year increase in annual revenue for firms that used non-financial rewards and/or recognition was triple that of firms that didn’t use them (9.6% vs. 3%)

· For people with satisfactory salaries, some non-financial motivators are more effective than extra cash in building long-term employee engagement

· In a global CEO survey when asked to what extent they intended to change their strategies in nine human-management categories the biggest change they planned was to use more non-financial rewards to motivate the staff…47% planned some change and 18% planned significant change

Decades of experience by the incentive industry has shown that non-cash awards like gift cards, merchandise and travel are both more motivational and cost-effective than cash. Now the C-suite is starting to realize the same thing.

What Is the Most Powerful Workplace Motivator?

noreply@blogger.com (Ley Borlo) — Tue, 08 May 2012 12:16:00 +0000

I happened across this article from the HarvardBusiness School that I had set aside from last fall to review. I thought the title was intriguing and having been deeply involved in employee and sales incentives and recognition for many years I was very interested to see what the highest in academia had to say. You can’t get much better than the Harvard Business School.

I didn’t have to wait long to learn the answer to the question, the executive summary jumped out at me immediately with the following:

“The most powerful workplace motivator is our natural tendency to measure our own performance against the performance of others. “

And

“Salespeople will actually give up the chance to make extra money if doing so will actually garner positive recognition from their peers.”

Wow, sure wish I knew that back in the 70’s when I was learning how to develop and implement incentive programs. Didn’t know it was that simple! My life and the communications challenge of these types of programs would have been so much easier!

I continued with the article anxious to see how these conclusions were developed, and the more I read the more I realized that the assumptions made stood on some very shaky ground, at least from all that I have learned and understood about incentive programs over the years.

I was just about to get into all the things that I found fault with in the article, when another blog post crossed my desk. This one came from an incentive and recognition professional that I respect, Paul Hebert from i2i. Paul sheds a far better light on the inherent problems of this Harvard piece than I could have ever done. Take a look at it and you’ll see what I mean. Thanks Paul for the heavy lifting.

The Harvard article goes a long way to prove that while the art of designing and implementing a solid successful incentive campaign may not exactly be “rocket science” as they say, but it is certainly more complex than the tertiary review and deductions that were derived by this author.

It’s a great country where everyone’s got an opinion and is free to share it. It’s just nice sometimes to see that even the lofty Harvard Business School can get too far out on the edge and write about something with woeful knowledge of their topic.

Rewarding Only 5 Out of 65000 Employees??!!

noreply@blogger.com (Ley Borlo) — Tue, 01 May 2012 12:15:00 +0000

I’ve read and re-read this article about the wellness effort at the Campbell Soup Company and every time I did the same thought came to mind. Other pertinent data notwithstanding, did they really only recognize 5 employees for maintaining healthy lifestyles? With a total of 65000 Campbell employees at last count that would be one out of every 12800 employees was recognized! Surely that can’t be true? If you looked at as a % it would be .0000769% !!!

Now I’m not saying that’s all the employees that were recognized by Campbell’s, but it certainly reads that way…

“Campbell Soup recognized the achievements of five North American employees Friday with the company’s “Healthy Lifestyles Award”. Presented annually for the last five years the award celebrates employees who live (you guessed it) healthy lifestyles.”

What a sterling example of an employee engagement effort! How motivational is that? I assume they want all of their employees to take part in this worthy wellness effort, but 5 out 65000 recognized?? Tell me they’re kidding us? This might the absolute worst example of an employee recognition effort I have ever encountered, which is saying something. I honestly hope that the program did in fact have some additional stair step type structure that recognized many more along the way. You know, the kind that chooses one employee per month, per each of the 13 North American sites? That would have at least brought the recognition to a grand total of 156 worthy recipients, and increased the % of winning employees recognized to a whopping .0024%. How motivational would that be?

But as stated,

“They are taking actions to improve their health and motivating their peers to be healthy too.”

At the rate of 5 a year, it might take a while. Why do I get the feeling that several thousands of Campbell Soup Employees aren’t really engaged in this effort? Do you think?

When I first thought of a name for this blog a few years ago, this kind of award program is exactly what I was thinking about. I won’t even comment on the awards, I’m sure the $500 came in handy, but you’ve got to know that a...

“gift basket of Campbell's healthy products, including Campbell's Healthy Request soups, V8 juices and Pepperidge Farm whole grain breads”

…really hit the spot. Now that is special!

Why give your Employees a Choice of Gift cards?

noreply@blogger.com (Ley Borlo) — Tue, 24 Apr 2012 11:45:00 +0000

This article from Lucky Magazine caught our attention not so much for the subject and what it said, but for what it didn’t say. It talks about giving a gift card, the pros and cons and whether we are a “lazy” shopper if we do. Wouldn’t it be nice if we could offer several gift cards to choose from and then let the recipient pick the one that suits their needs? But you can’t realistically purchase a dozen or so cards, let them choose the one they want and then bring the rest back, can you? That’s just not practical.

The ubiquitous gift cards from Visa, MasterCard or American Express are popular because they have true choice. They give the recipient the option of using them where ever they choose to shop. But for that flexibility you have to pay exorbitant fees, (sometimes as much as 10-20% of the face amount of the card (a $25 card with a $4.95 fee is almost 20%). That’s not practical when you’re trying to manage your budget.

But with new technology that’s all changed. There are systems now that do provide a service without fees that allow anyone receiving gift or award to choose from hundreds of different gift cards making them almost as flexible as a bank card. Programs like Array Gift for consumers and Award of Choice for employee recognition offer over 500 of the most popular cards and give the recipient a tremendous choice.

Gift cards have become the number one gift year after year and they have become the number one employee award as well simply because they are the least expensive to use, provide a tremendous value to the issuing person or company and do provide a much greater choice than simply giving them a gift that you choose yourself. Because of this, hundreds of thousands of businesses, small and large alike use gift cards as employee recognition awards. That’s what the employees want.

Unfortunately the majority of businesses have not caught on to the new systems that offer so much choice. They simply purchase a bunch of the same gift cards and assume that will do the trick. Unfortunately, they’re wrong. It may be easier for them to do that and just supply one card, but one size doesn’t fit all and never will. Sure if you give them a gift card from Wal-Mart or Home Depot or Best Buy, they’ll probably try to use it at some point, but it won’t be the one they really wanted.

An entire new industry has sprung up around buying and selling unwanted gift cards. Places like Plastic Jungle will give you a discounted rate of cash in exchange for your unused card, the rate determined by the popularity of the card. Then they sell those cards at a lower rate than what they paid for them. It’s simple arbitrage. But it starts with folks receiving a gift card that they didn’t want.

So, as mentioned in the blog, you can spend lots of time thinking of what card to give like the little boutique they really love, a spa or a manicure close to the office, or a credit to those things that they really need or want (sounds like cash to me). Or, you can give them gift card systems like the AwardofChoice where they can choose the card that really fits their own lifestyle. What would you rather have?

Paying Income Tax on Employee Recognition Awards

noreply@blogger.com (Ley Borlo) — Tue, 17 Apr 2012 11:19:00 +0000

As we mentioned in last week’s post, there are tax consequences associated with all employee award programs. Over the years, different clients have chosen to handle these tax consequences in different ways. Some, believe it or not, simply choose to ignore them entirely; not a good idea unless you don’t care about being audited. Others choose to pay tax on 100% of anything given to the employee 100% of the time and don’t even bother with the tax codes. They are obviously very conservative on the subject.

But there are occasions when recognition awards would not be taxable and these are mentioned in section 274(j) of the Internal Revenue code. By and large most award companies quote this section of the code and try to convince their client that their program is not taxable, and by and large almost all of these award companies forget to tell their clients that to really qualify they must not give awards in the aggregate to more than 10% of their employees. As many of these programs are for years of service they assume that the non-tax issue holds true for any recognition effort, but that’s not the case. Somehow that point is often conveniently left out of the conversation, and consequentially that client is vulnerable to IRS audit when they start to issue awards to many more than just 10% of the employees.

Actually if years of service awards were given to more than 10% of their employees there could be tax consequences as well. The non-taxability of recognition awards as espoused by the traditional merchandise award companies has been one of their top selling points. Forget whether the program produced results, just by saying it is nontaxable is good enough for some buyers. It should be noted here that gift cards can be included as awards that qualify for favorable tax treatment if they are “non-negotiable certificates conferring only the right to receive tangible personal property.” Of course the same aforementioned merchandise companies never tell you this.

The tax argument between traditional merchandise awards companies and gift card award companies regarding taxation has been around for a while. Frankly, from our perspective it is a conversation that is a waste of time. In fact, the actual tax that might have to be paid on gift cards, even if you think it is taxable, is often minuscule. And your employee will always receive far more value from gift cards than a traditional merchandise award, not to mention far better choice.

Let us explain. For awards to be taxable in the first place, the recipient who receives the award must be in a taxable situation. Did you know that 46% of working Americans don’t pay any Federal Income tax at all? This article from USA Today shows how few folks actually pay income tax, and that number is growing. Having done research on many of our past clients we have seen that the vast majority of employees who are in safety sensitive jobs in the country are usually in the lower effective tax brackets or might not be paying taxes on the awards anyway.

But let’s just say they will be paying taxes, what then? Interesting data from this article from the Tax Policy Center shows that the effective tax rate for individuals for the last 20 years or so has been hovering around 10%. So if you awarded and employee a $100 gift card they would pay $10 in tax for that award. Of course the sponsoring company can decide to pay that tax for them which would increase their program budget, but would that make sense?

We have research that shows that traditional merchandise awards are ridiculously overpriced. We have shown client after client that their merchandise awards are at least 50% more than retail, and often much higher than that. Even paying their own taxes your employee gets a much better deal with gift cards than the actual merchandise item. With gift cards, the sponsoring company can reduce their budget by 25% and still give their employees a much better overall value.

Look at it this way. What good does it do for your employees when they receive a traditional merchandise item tax free award that cost you $200 that they can find at everyday retail for $95? What will the employee think when they see the disparity? With the internet finding that disparity is not hard to do. Don’t you think your employees would much rather have gift cards valued and priced at $150, than the $200 item? What would you rather have?

Paying Income Tax on Employee Recognition Awards Part 1

noreply@blogger.com (Ley Borlo) — Tue, 10 Apr 2012 11:05:00 +0000

Did you read about the latest debacle of the GSA spending almost a million bucks on a 3 day boondoggle to Las Vegas for 300 folks, inclusive of fortune tellers, clowns and a team building bicycle making event? And on a similar note, that same GSA region implemented a points based award program that gave away $200,000 worth of IPods and other merchandise to a bunch of worthy participants. We haven’t as yet seen the details of that program so we can’t really comment on its viability, but we can guess that there was a lot more “give away” and lot less “earned” awards than exist in similar programs implemented in the private sector.

Concerning the travel program, it was reported that Jeff Neely, the acting GSA administrator at the time, told the event organizers to make the conference “over the top!” Having been in sales of those types of travel programs for years, with hundreds of trips sold to Las Vegas, telling a supplier to make the event “over the top” was like telling a cat he was free to stock up on as much of the most delectable and expensive catnip he could find and someone else would pay the bill.

Now let’s make sure we don’t beat up on Las Vegas for doing what they do best. In our opinion there’s not a greater place in the country to host such an affair. They can design and implement and flawlessly execute an event with virtually any theme imaginable, and conduct a business meeting that has folks dancing in the aisles. It’s what they do, it’s what the great event and meeting planner do, and they do it every day for hundreds of the best companies in the U.S. And they should keep on doing it because these meetings can produce very significant outcomes and help those companies achieve incremental bottom line results.

Unfortunately, the GSA is not a privately held company using their own profits to put on an event of this magnitude. They don’t have profits to spend. They don’t really have a bottom line, just a top line that just seems to keep increasing. It’s not unlike the rest of the government that just keeps growing and never seems to stop! At economic times like these to spend tax payers money like this, in our estimation, is indefensible. Some heads have rolled, and we have no doubt that more will be on the block.

The interesting thing about all this is not one word (at this writing) has been mentioned about the income tax consequences of programs like these. And there are consequences. Our guess is that there are hundreds if not thousands of event planners and buyers of these types of trips and prizes that are now scrambling around and diving into old files to see how the taxes were handled in current and even past programs. We are certainly not tax experts and always advise our clients to consult with their tax attorney before they decide on whether you should or shouldn’t tax the employee for events like these.

That being said, here’s one simple factual point…according to the IRS, all awards you give to your employees are considered taxable income. End of point. Of course there are times and circumstances written into the tax codes when income tax might not be pertinent, but these codes are interpretive. Do you think that the IRS might just look into these GSA programs to see if they created a taxable event for the employees? And will this lead to more far reaching searches of the IRS into like expenditures in other parts of the government? And how long will it take the IRS to look into corporate America where these kinds of programs are routine? The consequences of what the GSA did can be far reaching. Our guess is that we haven’t heard the end of this saga.

Want to Keep Your Employees Happy??

noreply@blogger.com (Ley Borlo) — Tue, 03 Apr 2012 11:27:00 +0000

Here’s an article from Incentive Magazine that I found very interesting. It’s about ten ways of keeping your employees motivated, engaged and happy. You know, all those motherhood and apple pie type things that the author says are so important in business these days. Far be it from me to argue with such admirable management talents such as,

“being nice, caring, mindful, helpful, courteous, sensitive, present, happy, responsive and grateful.”

but after I read it I felt like I just came out of being dropped into a syrup bowl. It reminds you of a Boy Scout motto for business, doesn’t it? I’m sure that if more of those things happened in the business worlds, the workplace would be better for all concerned, and I’m sure there are businesses where little of this is ever the norm. And that’s a shame.

As we have been in the employee recognition world for many years we certainly applaud any attempt to make the workplace a better place to be, but feel that there is another very important side to this.

Certainly an employee’s happiness has something to do with the company they work for, but is that the responsibility of the company? Happiness has many facets, and while work environment does have an effect on it, some has to be the individual’s responsibility. Maybe it’s the job of management to do all the above niceties, but how about the other important things that are involved without which happiness would be pretty shallow?

What about teaching employees how to be responsible? What about fairness? How about not providing the pabulum of the moment when dealing with annual or other performance reviews? How about telling the truth about performance? How about teaching them how to be accountable for their actions? What about extoling honesty and integrity? How about measuring performance accurately and taking out the subjectivity? What about teaching them how to set personal and business goals and then how to achieve them?

I’m all for appealing to employees through the pleasant touchy feely things, but they need to go hand in hand with the realities of business and why employees are there in the first place. You could have a department full of happy souls doing marginal work and barely achieving their objectives. But standing around in the afternoon holding hands and singing Kumbaya won’t cut it when you’re faced with competition who are eating you alive because their employees are hungry to be the best.

Happy, caring, helpful etc. employees are fine, but they are so much better when combined with a winning attitude shared by hard working no nonsense winners!

Non Redemption in Gift Card solutions Not a Problem

noreply@blogger.com (Ley Borlo) — Tue, 27 Mar 2012 12:10:00 +0000

As mentioned in our last post, I do get a kick out of some of the discussions about employee awards on LinkedIn. They are often self-serving and designed to sell a product or point of view instead of opening an honest debate on the different sides of a topic. At least most of the ones I’ve seen seem to be that way.

Here’s one I saw recently that attempted to call attention to a big negative of using gift cards as incentive or recognition awards. It was written by one of those ‘dyed in the wool’ traditional recognition merchandise companies who have been selling their awards for such high prices that they make Neiman Marcus blanch blush.

In this instance they were discussing award point programs as well as voucher programs and the fact that clients typically pay for these systems on issuance. This brings into question the breakage or non-redemption of the vouchers/points. For sake of this post, it is important to delineate vouchers that are redeemable for merchandise or for gift cards, as the financials of each are substantially different, and the writer actually has some valid statements regarding vouchers redeemable for merchandise.

We will tackle the discussion of vouchers redeemable for gift card solutions first, as the discussion of points programs is an entirely different value discussion and one better taken up separately.

To begin the writer asserts that the voucher programs have expiration dates which drive non-redemption (breakage.) In reality that’s not true these days as almost every one of the top gift card voucher solutions do not have expiration dates. That kind of squelches his argument right out of the gate.

Then he takes the conversation from merely mistakenly assumptive to the ridiculous when he implies that the breakage is as high 25%. That’s really high and in fact the industry pretty much knows through experience that non-redemption will average around the 10% mark for all types of programs. When you do the math and compare merchandise pricing of these award companies with retail (what you’d pay with a gift card) the 10% is a pretty good deal. You see, the merchandise in traditional award programs average over 50% higher than retail and can even go much higher! But they won’t tell you that.

Lastly, our friendly writer wants you to look at the bottom line financials of companies who use systems like these. He intimates they are making a killing on these kinds of systems. Unfortunately, almost every one of these companies is privately held and you can’t even see their financials. Of course you can take the gift card companies out of that discussion as they are the lowest profit margin award companies in the business…by far!

Interestingly, the company the writer works for is one of the leading recognition and service award companies in the country. These folks have been using smoke and mirrors pricing called “group delivered sell” a pricing scheme that contains some of the highest profit margins in the business. They can also have breakage in these types of systems, but that’s a dirty little secret that is very closely guarded. Disingenuous? You decide!

Beef Bourguignon for your Girlfriend…Priceless!

noreply@blogger.com (Ley Borlo) — Tue, 20 Mar 2012 11:41:00 +0000

Some of the best discussions about rewards and recognition practices appear on LinkedIn. Here’s one about a subject near and dear to my heart. I would have commented on the discussion itself, but frankly wouldn‘t have been able to do it without attacking someone else’s opinion, and I didn’t want to drag it down to that level.

The discussion in question emanated from the UK and had to do with vouchers (gift cards in our award world). The person starting the discussion made the point (somewhat myopically) that vouchers didn’t work as staff awards. Evidently he had spent years as a senior manager in the call center industry and thought that incentives and rewards that had been used in the industry were not producing results. He thought there was a much better way.

He went on to say that vouchers were more about convenience they offer the giver then giving the recipient the choice. His point was that the cards lacked three things that the prizes have, the first of which is trophy value. In his opinion having a prize sitting in front of the participants that they could aspire to earn was the best type of award. It offered memorable value when presented in front of peers.

Next he felt that vouchers don’t differentiate themselves from regular pay because they are used for necessities like diapers. Essentially he says the vouchers or gift cards are just like cash.

Finally he maintains that you should make the award “priceless,” or at least hard to put a price on it. In other words use an award whose value is hard to determine. Instead of a gift card valued at $25, his example was...

“an enamel roaster pot, with a book on ‘one pot dishes’ and a handful of artisan pastes, spices and herb mixes. This still has a company cost of £20, put when an agent cooks his first beef bourguignon for his new girlfriend, well, it’s priceless.”

While reading his discussion I couldn’t help but think that he sounded just like the traditional merchandise award peddlers in the US. Those three arguments have been around since gift cards started to be used in the award industry and they are just as erroneous here in the USA.

For one, the trophy value is not in the gift, it’s in the presentation. Second, pending on the gift card solution you use, you never have to see them redeemed for everyday necessities, and they can’t be redeemed for cash. And lastly, trying to find that one item to motivate everyone is a completely lost cause. It didn’t work 50 years ago and it certainly doesn’t work today. It is simply foolish to think that you can hide the price of anything from your employees…with the advance in technology and digital solutions anyone with a computer, knowing the price of anything is only a click away. Let’s don’t be disingenuous, your hiding the price because they are hiding the high profit margins contained in that kind ofprcing.

And, by the way, at the end of the discussion we did find out that the senior call center manager was now selling a small group of very high priced award items and I’m sure his main competition is gift cards.

The Popularity of Gift Cards is Declining!

noreply@blogger.com (Ley Borlo) — Tue, 13 Mar 2012 12:37:00 +0000

Really? Well, from the standpoint of this article, I suppose they are correct. They are after all the vaunted ConsumerReports that is always fighting for truth, justice and the American way. Of course as with all statistics they can be analyzed and reported on in a variety of ways. Here’s another way of looking at it.

Nearly half of adults said they received gift cards for the holidays last year. Unpopular, no! Less Popular than 2007 holiday season, yes! About 80% of consumers bought gift cards in 2011, up from 77% last year. Unpopular, no! Gift cards have been the top item on consumer’s wish list for five years in a row. That doesn’t sound too unpopular to me. Gift card sales are approaching $100 Billion, almost flat from 2010, but isn’t that a rather significant number? Unpopular? That decision is up to you.

Other stats on gift cards, specifically what happens to them after people receive them, might be a more interesting subject to review.

According to a survey conducted Consumer Reports, the top reasons for not redeeming gift cards are:

· 37% have not found anything they wanted to buy

· 36% haven’t had the time to use it

· 34% forgot about it

I suppose looking at just those figures alone could lead the reader to assume that 35-40% of all gift cards aren’t used which is just not correct. The non-used figure according to most sources is less than 10% and that number is a guesstimate. Most gift cards today don’t have an expiration date because of the legislation that went into effect in 2009. That being the case we will never really know how many gift cards will go unredeemed. But around 5% would be a good enough guess.

Of more concern should be “have not found anything they wanted to buy yet. That has to have something to do with the card that they received. While gift cards aren’t a cure-all for those who don’t know the right gift to give, there does have to be some thought put into it about the recipient’s likes and dislikes. But there is some help on the way. Now there are companies like Array Enterprises who introduced the Array Gift Card last holiday season. When you give it, your participants can redeem it for over 500 of the most popular gift cards in the country. They’ll sure to find something they want to buy. This is a sister card to the Award of Choice which does the same thing for the incentive industry. Check them out, they are as close to giving the perfect gift card gift as you’ll get.

Reward Programs Don’t Fix Employee Engagement Problems!

noreply@blogger.com (Ley Borlo) — Tue, 06 Mar 2012 11:54:00 +0000

Please read this post by Paul Hebert of i2i. Paul just may be the best consultant in the incentive and recognition awards industry, partly because he doesn’t get caught up in the award side of things that drives the profit for all the award companies and potential income for him; partly because he has the experience to learn a client’s needs and construct the kind of program that will produce results; and partly because he’s not afraid to tell it like it is, even to the detriment of his income.

Can you imagine any incentive or recognition award salesperson advising a client against implementing an employee recognition award system? I’ve only seen a handful of these types in over 40 years in the business, and today they are even rarer.

There is only one thing about this article that I didn’t like. I didn’t like the fact that I didn’t come up with the idea myself. Even if I did I wouldn’t have been able to position it as eloquently as Paul did.

When reading this, I harkened back to the time when the industry did have these types of folks, and companies that were more concerned with programs that produced results rather than ones that were avenues to just “sell more stuff!”

The subject of employee engagement is a prominent topic in the area of employee recognition and awards these days. You’d think that rewarding employees would be the cure-all for disengaged employees all over the world. But as Paul says…

“You don’t have poor engagement because you don’t have a reward strategy or system. You have poor engagement because your management (read managers - read the people around the table you so want a seat at) all suck at engagement.”

Some of talking heads in the recognition companies in this industry will undoubtedly take offense with what Paul says. He should be praised for saying it!

Comparison between Incentive Sales Reps and Political Presidential Candidates

noreply@blogger.com (Ley Borlo) — Tue, 28 Feb 2012 12:04:00 +0000

It’s only the beginning of March, and frankly I’m already sick of the presidential politics. This time around it seems like it is even nastier than in the past with more distortions of fact, half-truths, innuendoes, backbiting, misleading and negative advertising and all kinds of endless pundit drivel. Wouldn’t it be nice if in every conversation or discussion or debate we had a little box on every TV screen or news media article where a “truth icon” would appear on every statement made that would immediately show whether the statement was absolutely true, an out and out lie or something taken out of context? Wishful thinking? Probably!

As I watch all of these word games I’m taken back to so many selling situations of the past in our industry where the truth was never a necessity to make the sale, and smoke and mirrors pricing was the gold standard for the incentive sales reps that made a substantial living on clouding the issue with unsuspecting buyers. It seemed that the more you told the truth, the more the buyer didn’t believe you and the more you lost the business. It seemed that buyers bought what they wanted to buy, with little consideration of their own facts. The incentive program graveyard is loaded with programs that cost a lot of money, produced nothing for the client and put more of the program budget into the hands of the award supplier than the participants of the program. It’s was not uncommon for a program buyer to pay $500 for an award that could be purchased at retail for $200, or spend a million dollars on a travel program that might motivate 2-5% of their participant base and convince themselves that truly 100% of the participants were motivated to improve their performance. Unfortunately that still happens today.

So can the incentive reps of today be compared to all those presidential candidates who will say and do about anything to get elected? Sure they can, and they do. But it’s not really their fault that they do it, they‘re just trying to make a living the best way they know and the whole truth be damned when it lies in the way of making the sale.

Does the fault lies with the buyer? Should they be in a position to buy incentives before they understand all the nuances and principles of the award industry? Should they know when to use what kinds of awards at what times and in what variation to motivate performance pending all the facts at their disposal? Should know exactly what they want to accomplish and how they intend to measure that achievement before they begin? Should they know how to communicate their objectives and use communications to bolster their efforts? If they are going to buy fulfillment should they know what companies are the best at fulfilling that need? If they don’t really have a clue of how to structure their program should they know what consultants to call upon to provide that assistance? Unfortunately, in all too many cases the buyers don’t. And in those cases they end up with programs that wind up in the incentive graveyard mentioned above.

The industry at one time had many terrific consultative types who had the expertise to guide clients in the right direction. Those kinds of folks, like our friend PaulHebert of i2i who still provides that expertise, are unfortunately harder and harder to find today. “Caveat Emptor”, or Let the Buyer Beware” is a saying that has been around for years. It applies in spades to buyers of incentive award programs, but it shouldn’t preclude them for knowing all they can about what it is that they are buying. If they don’t want to take the time to learn they will be fair game for those incentive reps who revel in the game and “truthfulness” of presidential politics.

Poorly Developed Goals Will Hurt Your Incentive Program

noreply@blogger.com (Ley Borlo) — Tue, 21 Feb 2012 12:17:00 +0000

If you have used incentive award programs, are using incentive award programs, or are planning to use incentive award programs, this postby Paul Hebert of i2i Incentive Intelligence is a must read.

The fundamental challenge for anyone designing incentive awards is to have a program that will produce results. The essential element to achieve this challenge is to establish the proper goals for your participants. Then and only then can you spend the time necessary to determine the right rules to make it all work successfully.

When considering what types of goals to establish, there are three different types of goals that you should consider:

1. Focus on the behaviors that you want to influence to reach the outcome

2. Focus on what you do want to achieve vs. what you don’t want to achieve

3. Focus on specific details to achieve, not a vague generalized outcome

Unfortunately, there are many incentive program planners who fail to understand these types, and do not structure programs that have the best chance of success. Programs designed with poor goals are legion. We see them all the time and they keep on coming. They make the outcome not the behavior the goal, are not specific and detail exactly they want to achieve and are very universal in their definition.

The “prize” you use in your award program won’t drive lasting results unless you take the time to structure your program properly. And worse, when goals are poorly assigned, you run the risk of spending large budgets with little to show for it.

Simple Employee Recognition

noreply@blogger.com (Ley Borlo) — Tue, 14 Feb 2012 12:05:00 +0000

The following ideas on praising and recognizing employees were stolen shamelessly from this post on CBS Money Watch written by Jeff Haden. Jeff has ghost written many non-fiction books for some of the smartest CEOs in business and we believe has a prescient understanding of employee engagement and recognition. You can view his works at www.blackbirdinc.com

Jeff’s premise is not to create a special program to praise your employees, you don’t need one. And we wholeheartedly agree! Too many companies in the award industry think you need those elaborate electronic programs with points allocated for certain employee performance improvement. They hold the points in a bank account and then redeem them for the latest espresso machine or electronic gadget of the moment, all of which are usually way overpriced. Using simple recognition as outlined here will cost you a lot less money and often give you a lot more recognition where it will do the most good.

Try some of these practical and simple steps to make sure you are giving your employees the recognition they deserve:

“Treat employees like snowflakes.”

Everyone is different; recognize each in the way that gives them the greatest impact.

“Never wait”

Recognizing as soon after the performance has occurred is never too soon. When you wait you lose the impact of the recognition.

“Be specific.”

Telling someone they did a great job without telling them will often fall on deaf ears and you will lose the moment. When you’re specific it tells the employee that you are paying attention and you know what they did and they’ll also know what exactly to do the next time.

“Be sincere.”

Insincerity will hurt more than help and will be taken negatively. Don’t waste your time if your not going to be sincere.

“Leave out the ‘constructive’ stuff.”

Don’t use recognition as a “teaching moment”….ever. You greatly lessen the effect of the recognition in the first place.

“Be proactive.”

Focus more on employees doing things right than doing them wrong.

“Try the “just because” flowers approach.”

A spring bouquet that is a surprise often has a bigger impact than Valentine’s Day roses. A surprise visit from the CEO to thank someone can be priceless.

“Always seek a balance.”

It’s easy to recognize the best, but look for reasons to spread the wealth. A little encourage to an average or poor performer can help them become your best performers.

“Recognizing effort and achievement is self-reinforcing: When you do a better job of recognizing employees they tend to perform better — giving you even more achievements to recognize.”

Jeff Haden

Another Reason Gift Cards Make Great Awards

noreply@blogger.com (Ley Borlo) — Tue, 07 Feb 2012 12:57:00 +0000

We are often asked by prospective customers why we feel that gift cards make the best employee awards. The simple reasons are that they provide the best value and choice than any other merchandise award, mainly because with gift cards you can get just about any kind of merchandise available in the incentive industry, but your choices of just the right one will be dramatically greater, and the cost will be dramatically less.

In our daily surfing of the net on the subject of awards we come across many articles, this one, giving us another reason why gift cards make great awards, caught our eye. It relates a new shopping event for the after holiday season designed to entice those who received gift cards for Christmas to come in and spend them on a certain weekend…the GCW or Gift Card Weekend Sale. Many partner companies have used this concept to drive incremental sales in January. The gift card recipients can redeem their gift cards from participating retail partners and receive extra value through special deals posted on the GCW website that will be offered that weekend only.

As a very large percent of the incentive and recognition awards budgets are paid out to participants at the end of the year, having sales like the GCW actually increases the value of the award to the participant. If they earned a $100 gift card, it could be worth $125 to $150 on these sales.

For years, the traditional merchandise award companies have used “sale” pricing on a few of their items to entice participant redemption, unfortunately most of the awards in the typical incentive catalogs are so overpriced that even by offering a discount the prices are still quite high compared to the sales that a gift card holder can take advantage of.

If you want to give your participants the items they really want, let them have the gift card that they want. Let they choose from over 500 of the most popular gift cards in the country by giving them the Award of Choice card.

Effective Employee Feedback Combined with Employee Recognition

noreply@blogger.com (Ley Borlo) — Tue, 31 Jan 2012 12:05:00 +0000

Employee feedback is important, so is recognition of positive performance. They should go hand in hand.

Over the years I’ve been amazed at the stories I’ve heard about managers that don’t know how to give feedback to difficult employees. So, they just avoid it entirely or just give them average feedback thinking that average is bad. In many ways it’s like what some teachers do with their students just to get them passed and on to the next grade.

No one wants to deal with negative performance issues. No one wants to be the bad guy and tell it like it is, so they sugar coat things, they aren’t direct and they don’t tell the truth. That just delays the issue and pawns the employee off to the next person who has to manage them.

Unfortunately giving feedback and is more subjective than objective. Everyone looks at employee feedback through their own eyes and appraise employees accordingly. What one sees as an inadequacy, another might see as average performance or even as strength? As much as companies try their best to appraise the performance and provide feedback objectively it’s not always easy to do.

Of course when you do have a very difficult employee you won’t always be able to salvage them. In those cases, it’s ok to cut your losses and recommend that they might want to look for a position that is more suitable to their own needs. If not, they will likely become disengaged, or worse yet actively disengaged, and before you know it will have brought down some other less that engaged employees to be totally negative.

In the meantime, do your best to know and utilize the ways to effectively provide feedback, positively or negatively. If it is negative, when they make a concerted effort to change and improve their performance, but sure to recognize that change with positive reinforcement. Of course when it’s positive performance and the employee’s accomplishments are particularly noteworthy, then by all means praise them and recognize them for that performance.

Many folks have written about all the ways to give effective feedback. We came across thisarticle from last year that we feel is well done and provides all you’ll need to know to start an effective feedback campaign for you employees.

And, if the feedback is very positive and you are so inclined and want to give them a small reward along with the recognition, think of the Award of Choice card (a shameless plug). It is a terrific system that gives the employee terrific choice with no administrative fees for you.

Incentives or Recognition – They Never Seem to Learn the Difference

noreply@blogger.com (Ley Borlo) — Tue, 24 Jan 2012 12:30:00 +0000

Will corporate award planners every truly understand the difference between an incentive program and a recognition program? Try as some of the experts in the industry might to educate them; these two terms are constantly being interchanged.

The EmployeeEngagement Alliance defines the two types of programs as this…

“Incentive programs are used to drive behaviors conducive to practically any business objective. Recognition programs are used to recognize individuals whose accomplishments were particularly noteworthy.”

We’ve addressed the issue on several occasions but many folks still persist on confusing them. Here’s an excellent post from our friend PaulHebert at I2I Incentive Intelligence that will give you one way of looking at a difference between the two. Another great way to differentiate them is by reading this post from the Compensation Café on the Right vs WrongIncentives. As this article comes to us from a well-respected blog on cash compensation, it gives us a good look at the same things we need to consider when discussing incentives or recognition to improve performance.

The key paragraph in this compensation piece is the discussion of a financial rationale and these questions…

“What will the company receive in return for the increased costs of an incentive program?" and “If you are planning to increase your targeted compensation costs of an affected group, how will you answer the ROI question?

All well planned non-cash incentive programs follow the same methodology. They plan for an ROI. This is the single largest difference between incentives and recognition!

The award industry has struggled for years to apply any sort of meaningful ROI to a recognition system. They haven’t figured out a good way to do it and never will based on the metrics and fundamental structure they use for these types of programs.

And as mentioned in the Compensation Café article…

Caution: You had better provide a business rationale, and not subjective phraseology like “survey says” or “everyone else is doing it" or even “it’s the right thing to do.’ Management tends to frown on such trivial rationalizations.

So for all corporate award planners, please get your definitions straight. Regardless of what all the prize peddlers in the industry tell you, you won’t change behavior and drive significant results with a recognition program. Recognition programs can provide you with a whole different set of benefits. You can drive results with an incentive program that is well designed and implemented, but it won’t necessarily recognize specific behaviors of employees whose accomplishes are particularly noteworthy.

The Disadvantages of Sales Incentive Programs

noreply@blogger.com (Ley Borlo) — Tue, 17 Jan 2012 11:50:00 +0000

This is the kind of article that is written by those who think they understand incentive programs, but is what he says correct? Unfortunately much of it is correct all too often, but it is not the norm, nor is it what happens when the incentive program is designed and implemented by professionals in the industry. While the author offers a list of disadvantages of sales incentives, they are not disadvantages of using sales incentives them; they are disadvantages of how they are used. Let us review the points mentioned in the post and how they differ from ours.

Rewards for Top Performers

“Most sales incentives tend to reward only the top performers ...some of these representatives may already be selling at a high level. They do just enough to collect their bonuses or trips”

Most top salespeople will be the top salespeople regardless and will always work to be the top. For them it is intrinsic. If historically only the top salespeople earn, the objectives and rules structures were not set properly to include 80% of the universe, not just the top 20%. A properly designed system will motivate the majority to better their own performance. In essence, they should compete with themselves.

Narrowly Focused

“Many sales incentives are also narrowly focused on just sales. This causes sales representatives to focus only on revenue-generating activities.”

Absolutely! That is as it should be. If you want them to focus on something else then incent that objective as well, but good salespeople are success driven. And that’s where you want them to be. The best programs will be those that are narrowly focused with qualifications to avoid other issues.

Costly

“Sales incentives also have high associated costs. Small companies which fail to tie incentives to the right performance variables may needlessly be paying tens of thousands of extra dollars per year for bonuses, trips and impromptu rewards.”

This should never really happen. Before you implement any sales program, enough time and due diligence should be spent so your measurements and objectives are tested against historical averages, taking all current marketing conditions into consideration. Any client who spent tens of thousands of dollars needlessly did a poor job of planning.

“The best sales incentives should be equally tied to increases in new business and sales of specific products and services. Some products or services may be ignored for higher-priced products or higher volume sales. “

Not necessarily. You can’t solve all problems with one program, but there are ways to tie them all together with one program using combinations of these other objectives as qualifiers or bonus earning opportunities when the main goal is achieved.

A professional incentive salesperson has the experience to turn these perceived disadvantages into advantages that will make your program the best it can be. As they say, you wouldn’t go to foot doctor to fix a heart ailment, would you? For one of the best incentive consultants in the business, check out Paul Hebert at I2Iincentive Intelligence.

What Happened to Employee Engagement in 2011?

noreply@blogger.com (Ley Borlo) — Tue, 10 Jan 2012 12:08:00 +0000

Employee engagement, you know that catch-all buzzword that speaks to how well employees are feeling these days? Well it seems like it wasn’t all that rosy in employee land last year.

AonHewitt, the consultancy that specializes in HR services along with a raft of other fun stuff like health and benefits, compensation, talent and organization, mergers and acquisitions, investing etc. has released data from their 2011Employee Engagement Database showing that engagement is still lagging. Given the state of the economy and the fact that we have a very dysfunctional government running things, I’m kind of surprised that employees aren’t tearing their hair out by the roots. Disengagement might be the least of our worries.

But nonetheless, the 5700 employee database which represents over five million employees worldwide, reveals …

“an engagement level of 56 percent for the end of 2011, which is the same as 2010, but lower than 2009 (60 percent) and 2008 (57 percent). Traditionally, engagement levels between 65 percent and 100 percent represent a high-performing culture; 45 percent to 65 percent indicate the workforce is indifferent to organizational success or failure; and anything lower than 45 percent represents a serious or destructive range.”

It seems that the largest drop in engagement comes from employees’ perceptions of how companies manage performance. Or in other words, employees think their bosses have not provided the proper level of management that leads to better productivity. They also don’t do a very good job of connecting the employees performance overall to company goals.

Sounds reasonable to us, not being in the corporate world anymore we really wouldn’t know that businesses out there don’t do a very good job of connecting performance to goals. Frankly, that sounds like a communication problem to us.

The report goes on to state that significant numbers of employees are not motivated to work beyond job requirements and are thinking of leaving in the near future. Not sure what “significant” means, maybe over 50%, but the way that the majority of employees have been treated in this bad economy, I’m surprised it wasn’t higher.

When discussing what drives this engagement, they point to many things but as always “appropriate recognition beyond pay and benefits for employee contribution” is high on the list. Recognition has been on this list for years. When will the guru executives every really understand and practice it? It’s surely the easiest fix of anything else they can do.

Happy Employees Aren’t Necessarily Productive Employees

noreply@blogger.com (Ley Borlo) — Tue, 03 Jan 2012 11:42:00 +0000

Just in time for the New Year comes this research that attempts to negate the value of employee recognition programs. Well at least it tries to negate it and is otherwise written supposedly to “challenge existing assumptions and provide an impetus to further exploration.” They probably should have said “provides an impetus for further clarification” as the research was not very evident nor clear and certainly provided no evidence to support conclusions drawn.

Frankly this piece is nothing more than a compilation of re-occurring thought on the values of recognition awards to change behavior in the workplace and is more self-promotional than anything else. In addition they throw in some thought dredged up from the works of Herzberg in the sixties as if to authenticate their position, all of which makes for a hodgepodge of creative deductive reasoning that leaves you a tad baffled. Hey, we’re not saying their conclusions are wrong, just a little confusing.

As is often the case, the Impact Achievement Group, who did the research, doesn’t seem to have a clue about the difference between an employee recognition program and an employee motivation or incentive program. The also hang their case on “happy employees” not being productive, but productive employees are “happy.” Not sure where the “happy” came into to picture, we’ve always heard “engaged” as the buzz word of the day. We’ve been designing and implementing recognition or incentive programs going on 40 years and have never used “happy” as the objective of the program.

We believe the issue here is who is best equipped to assist companies in improving employee performance. There are many who claim the high ground on this, not the least of which is the consultant types as mentioned here whose income is dependent on assessment, coaching, training etc., but not awards. Others include those research types who want to research every nuance possible of the employee world. Then we have the communication companies who feel that all you need to do is communicate better and your woes will be gone. Then you have the recognition and award companies who hang their hat on the award as the driving factor. Take your pick, read up on all of them, you’ll find that they all say much the same thing, but use their main money making deliverable to drive the plan.

If you believe that employee engagement (or happiness) is a behavioral issue (which we do) you might want to consider tackling the issue using the behavior model. In it you’ll find that research, training, communication and measurement and feedback are all part of changing behavior, with positive consequences as the piece to close the loop and continue the behavioral circle. As “positive consequences” include the reward piece, than it would seem that it is kind of difficult to extricate the reward and recognition from the total. Or are we just being too simplistic here?

Let’s stop thinking about whether reward and recognition does or doesn’t work in helping to engage employees and improve performance. There is plenty of evidence out there to support that conclusion. I don’t know if engaged means they’re happy, but it does mean they are performing better than those who are not engaged. What do you think?

Unwanted gift cards? They Can Be Avoided!

noreply@blogger.com (Ley Borlo) — Tue, 27 Dec 2011 12:57:00 +0000

Since the passage of the Card Act in August of last year we’ve seen many articles on how to sell your unwanted gift cards for cash. Today we found nine of these companies who purchase unwanted cards online and even one website that compared pricing on the top four companies.

The concept is simple. You tell them the value on the card you have and they will quote you a price to purchase your card. Each company has different terms and the price will usually fluctuate based on the popularity or availability of the card. They will ask you to send in your card, and recommend that you send it insured First Class (a cost you need to consider as decreasing your card value). They then resell the card at a higher price.

Most of these companies sprung up over the last year or two and do nothing more than implement a form of arbitrage…buying a product low and selling it high. With the explosion of gift cards in the consumer market, having these types of companies was inevitable, and they actually do some gift card award companies a big favor.

Gift cards became the unquestioned #1 employee award for several reasons: easy to use, tremendous choice, dollar for dollar value, etc. But, they never totally eliminated the problem of gift or award giving and not knowing what kind of gift to give. To give or reward the right gift card does require a little thought and understanding of the recipient. When you just purchase a card without knowing anything about the person you’re giving it to, the above mentioned companies come into play and the when the recipient doesn’t want the card they simply turn it in for discounted cash. The same holds true for all those companies who don’t know what to give their employees, but think that one or two cards with general appeal will suffice. They don’t. You won’t hit the hot button of all your employees with one or two cards and some will be disgruntled and resort to turning it into discounted cash.

When you give a card like the Award of Choice that is redeemable for just about every popular merchant, restaurant or service company in the country, you practically guarantee that the recipient will get what they want. Our lives change daily, one day we may want a Best Buy card to help get that DVD player, the next it might be one to a spa to give ourselves a mini-vacation day, or on another a restaurant card to take the family out to a memorable dinner.

Gift Cards for the Christmas Stocking!

noreply@blogger.com (Ley Borlo) — Tue, 20 Dec 2011 12:33:00 +0000

Consumer surveys conducted by Goldman Sachs for the International Council of Shopping centers point out that gift cards will be the most popular choice among shoppers this year.

The ICSC released their list of top holiday gifts for the 2011 season as part of the ICSC’s holiday spending forecast, which includes predictions for Black Friday. The items that consumers plan to purchase this year is:

· Gift cards – 14.2% compared to 11.2% in 2010

· Clothing – 12.8% compared to 11.9% in 2010

· Toys or Games – 11.2% compared to 8% in 2010

· Music, CDs of DVDs – 9.2% compared to 8.6% in 2010

· Cash – 8.4% compared to 8.1% in 2010

· Electronics – 7.9% compared to 7.7% in 2010

Did we ever think that gift cards, used as holiday gifts would be more than 70% higher than cash?

Gift Cards Most Used Incentive Award…More than Merchandise

noreply@blogger.com (Ley Borlo) — Tue, 13 Dec 2011 12:29:00 +0000

There is some interesting data that has come out of the 2011 gift card survey of subscribers to Incentive magazine. We’re sure this data did not please the traditional merchandise award companies who have been fighting the use of gift cards for years. But, such is life.

First, the number of responses from large budget incentive users has nearly doubled over 2010 figures. Traditionally companies with these large programs who have used other forms of awards for their programs now seem to be embracing gift cards as their award of choice. One reason we believe is the value and choice given by gift cards that was not readily apparent in the traditional merchandise awards. This trend has been increasing for several years, but 2011 seemed to be a peak. According to the survey:

“Of special note to gift card suppliers are the survey responses that place more value on gift cards than merchandise – gift cards are overwhelmingly seen as a more influential incentive or reward than other options. Since 57 % of respondents said their budgets were untouched for 2001, the outlook for gift card suppliers is even brighter this year.”

A significant survey question was:

How gift cards compared to traditional merchandise awards?

o 59.6 % said more effective

o 27.6% said equally effective

o 5.7% said less effective

o 7% didn’t use merchandise.

These types of responses would have been unheard of twenty years ago. Traditional merchandise awards had been the backbone of the incentive awards industry because they drove all the profit. There was only a small handful of suppliers selling gift cards and only to a limited market. Today gift cards are very well accepted as an award that will drive performance. They no longer have that “impersonal” label that was given to them by all the traditional merchandise suppliers when faced with them as competition.