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It's All About the Brand |
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It's a fact: Brand-name incentive awards have a higher perceived value than other rewards. Here's how to pump up your motivational programs by leveraging the top name brands.
Got Gap? How about Coach, Sony or Panasonic? The truth is, if your incentive program isn't made up of at least some brand-name rewards, it may flounder. So says Arnold Light, CEO and founder of White Plains, NY-based The Light Group, an incentive firm that's been in the business for 25 years: "Incentive winners want brand names,' Light says. "If the reward is a brand that the recipients don't know, you'll risk them saying, "This is a piece of junk!'
As brands proliferate in the media, pop culture and the retail marketplace, today's workforce has become more brand-conscious than ever. This means it's especially important to have an intelligent, informed approach to which brands you're using in incentives. You'll need the right strategy, and you'll have to motivate the right behaviors in the right people. But the bottom line is, at the moment when the reward is given, you've got to nail it. You've got to have the right brands in your incentives. Otherwise you're spinning your wheels.
Now More Than Ever
While they've always been important in motivational merchandise, many motivational experts say brands are more important than ever before. From merchandise, to food and entertainment, to gift cards, brands are having a major impact.
Case in point: When Light's team sets up an incentive catalog program for a company, "about 95% to 98% of our product redemptions are brand-name products,' he says. "It's not that the unbranded are bad products, but people associate brand with quality. So brands are vitally important, particularly with big-ticket products, like flat-screen televisions.'
Paul Spitzberg, New York-based vice president of special markets for Coach, the luxury leather company, says brands have been experiencing something of a comeback in recent years. "There was a time in the '90s when brands were not as important, when there was a bit of a revolution away from the excesses of the '80s,' he says. "But today, brands represent quality to people. They're stronger than ever.'
The fact that retail brands cost more than generic items and go on sale less frequently adds to their perceived value as incentives, says Spitzberg. "You want the perceived value of the reward to be high, and the highest perceived values are associated with well-known brands,' he says. "Because many brands have unilateral pricing policies or have pricing relationships with retailers that are more defined, recipients identify the value of the brand. You get more bang for your buck.'
Spitzberg says his own luxury brand is doing particularly well these days. "The demand for Coach products in incentive programs and for gifting opportunities has significantly increased,' he says. "And if you look at the retail world, the entire luxury brand sector has been thriving.'
Luxury brands communicate something special to recipients, Spitzberg says. "The message is very simple,' he says. "You, the recipient, are getting something of great value. I'm thanking you with something special because, you did something special. The same holds true if you give them a Movado or a Rolex watch.'
The growing importance of brands has also impacted dining and entertainment, where gourmet foods are more popular than ever. "Brands are especially important in the food and entertainment arena, because these are consumable products,' says Kim Westhoff, vice president of sales at Mrs. Fields Gifts in Salt Lake City, UT. "It's a bit like going to a specialty grocery store.'
And even in gift cards, brands have become more important, according Karen Renk, executive director of the Naperville, IL-based Incentive Marketing Association (IMA). "Lately there's been growth in the area of gift cards for brand-name retailers,' she says, "like Nordstrom, Williams-Sonoma and Crate and Barrel.'
Gift cards with high levels of brand recognition have two key benefits, says Renk: They're desired by recipients, and they're convenient. "Especially for spot recognition programs, branded gift cards are great,' she says. "A manager can have 25 gift cards in their desk, ready to distribute to employees, but probably they can't fit 25 pieces of incentive merchandise in their desk.'
A Bank Picks Its Brand
Working with The Light Group, Jerry Biuso, vice president of sales and marketing management at Banco Popular in Rosemont, IL, launched an online catalog incentive program in July of 2005. Thanks in part to an effective brand strategy, Biuso says the program has been a success.
Banco Popular's points-based program was designed for the managers of 137 branch offices across six states. "We call it the Quest for Success, which is the theme we have for building the sales and service culture,' says Biuso. "It empowers our branch managers to award points to our employees, who we call dream makers, on a quarterly basis.'
In the Quest for Success program, Banco Popular branch managers award points to employees for performing desired sales behaviors, such as making a certain number of cold calls or closing a big deal. "Each branch manager gets a certain amount of points each quarter, based on their number of employees,' says Biuso. "We want them to continually recognize their dream makers because that continual recognition is what really drives them.'
The program's online prize catalog is key to its success, Biuso says. "They can go online to view the prizes - everything from jewelry to electronics to housewares,' he says. Participants can see the points they need to accumulate to redeem the promotional awards, which serves as a major motivating factor, according to Biuso.
Light and Biuso worked together to design an online catalog with a mix of brands. "We knew our population is mostly female, probably about 70%, so we wanted to address that with items for the home and family, and accessories,' he says.
Brand-name items have been overwhelmingly popular, says Light. "Sony electronics, Panasonic electronics and Canon cameras are super popular,' he says. "For a while there was a run on Coach bags. Everyone was ordering them like crazy.'
Deciphering Demographics
For many successful incentive programs, the first step to an effective brand strategy is to understand the demographics of the audience. Mark Sullivan, vice president of SalesDriver, an incentive company based in Maynard, MA, relates the story of a recent incentive program he created for about 400 employees of a U.S.-based high-tech company. "We started from the fact that all the participants lived in the U.S., they all have award value over $1,000 and they'd be involved in the program for the long term. Then we worked from there,' he says.
Through informal surveys, Sullivan and his team discovered that these technology-oriented high achievers were interested in rewards like Bose headsets, Sony plasma-screen televisions, ritzy trips to Las Vegas and Tag Heuer watches. "These are the things that gave them personal motivation to achieve,' he says.
Variety was important in crafting the rewards catalog in this highly successful awards program, Sullivan says. "They wanted televisions, so we included a lot of different models in the catalog, because everyone wants a different size, and everyone has a different brand perception.' Likewise, when it came to travel, Sullivan says participants were offered choices from NASCAR races to professional golfing events. The common denominator was that all the choices had strong brand identities that were suited to the participants and the sponsor company.
Some types of merchandise, like electronics and apparel, cut across age groups, says Rick Blabolil, president of Marketing Innovators, an incentive company based in Rosemont, IL. "But it's going to be different apparel and electronics. If you have a youthful audience, you're going to go with Gap or Abercrombie and Fitch, rather than Brooks Brothers.'
A key starting point for understanding the demographics is age, says Carol Ivcich, head merchandiser for Maritz Rewards, a large incentive house based in Fenton, MO. She categorizes the workforce into four key generations, each with its own specific identity. But, she adds, "We study the crossovers among generations as much as the differences.'
The youngest demographic group incentive buyers should consider is Generation Y, which identifies workers about age 28 and younger. "These are the people that are entering the workforce, and you have to watch them closely,' says Ivcich. "Because they're so savvy, I like to say they eat brands for breakfast. They like to feel like they've discovered things for themselves, so they're a tricky group to market to.' One approach is to align a brand with something that's popular among Generation Y, like extreme sports, a tactic the eyewear company Oakley has employed to great success.
The next oldest demographic group is Generation X, says Ivcich, comprising of workers from about 28 to about 42, who are now starting to assume positions of leadership in the workforce. Incentive-wise, "these guys and girls redefined the home market,' says Ivcich. "They're aspirers, not quite to the luxury level yet, so they want value. They want a healthy, outdoor life, with biking and things, but they also appreciate high-end design. They're the people who make Target so successful.'
But right now the "buzz' demographic in incentives and promotional programs, says Ivcich, is the next oldest cohort, age 42 to 46, which the crew at Maritz calls the Baby Busters. "They've migrated to tech jobs, they're on their second marriages and they have dual incomes,' she explains. "Their incentives are a lot different than Baby Boomers', even though they're very close in age. This is the customer that migrates to experiential incentives. They want creativity and status. They want to something they can discuss around the watercooler.' Think Riedel stemware and ecotourism, says Ivcich.
The Baby Boomers are now the established leaders of the business world, and when it comes to incentives, they want authenticity and quality. "They're managing aging parents and younger children, and they want brands they can trust,' says Ivcich. "They want established brands for the home, like Viking appliances and DeWalt tools.'
A Brand New World
Experts like Ivcich say the only constant in the world of brands is change. As the marketplace changes, so do brands, and the savviest incentive programs take advantage of these developments. So what's next on the horizon in the world of brands? "The new thing we're working on is branded brands, when two brands get together and create a power brand,' says Maritz's Ivcich, citing partnerships between Meyer cookware and celebrity chef Rachel Ray, and All-Clad cookware and celebrity chef Emeril Lagasse. "It's a celebrity tie-in to merchandise, and it's a beautiful thing. We're going to find great success with it in 2007.'
The branded brands concept is going into play with an incentive program Maritz is designing for a major U.S. financial institution, Ivcich says. But instead of pairing celebrity chef with cookware, this program will blend luxury merchandise with another powerful brand: philanthropy. "We're going to work with a banking company, and they're very environmentally conscious. So we're teaming up in a philanthropic way, to show they care about the environment, by blending luxury with green merchandise.
"With the power of these brands coming together, luxury merchandise and the green lifestyle movement, we're going to have a home run,' she says.
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