Who's Using that Bad Word!
by Bob Vitagliano, CITE


Speaking about the new administration's assessment of the nation's economy, Goldman Sachs economist Edward F. McKelvey said, "When national figures keep highlighting problems in the economy, it tends to become a self-fulfilling prophecy."

Former Federal Reserve chair Alice Rivlin added, "It's dangerous for people in high places to talk about recession."

It's happening again! After a long period of impressive economic growth, change is in the air – and the "R" word is creeping into ordinary conversation. Politicians and pundits carefully avoid negative comments but will go just far enough to have their I-told-you-so's in place if and when it hits. And, American business is again busily planning for the possibility of a downturn with a possible recession.

It's predictable that our economy will experience cyclical fluctuations. What corporations do about them is not predictable. With emphasis on short-term results, most companies' first reaction is... downsize, restructure, reorganize, shake-up the organization. However we choose to state it, they are all words and actions that frighten most employees.

Certainly, everyone knows that fear doesn't motivate. Experienced managers learned that long ago. Not only does fear impact the average worker's ability to perform but it will drive star producers to find other employment opportunities where they can excel without unneeded pressure. Yet, every downturn seems to revive the attitude that leads to a de-emphasis of motivation and incentive programs because people should be happy just to have a job. It makes no sense. If anything, this is the time to increase motivational and incentive activities to keep a company in place at top efficiency and ahead of competitors. A builder's supply company with which I worked conducted its first dealer incentive program during the last recession and not only avoided the impact of decreased business but actually grew 5% in a diminishing market.

The answer to dealing with economic downturns is not to cut motivational campaigns but rather to design and deliver them in the most cost-effective ways. Don't give the edge to competition by discontinuing incentive marketing efforts. Instead, use more cost-effective destinations and venues and be more creative in making programs attractive to your audience. Make full use of the inimitable aspects and opportunities that these destinations and venues offer. The difference between a program that is highly motivational and one that is cost effective is not as difficult as it may seem.

It's all in the planning. Many domestic destinations have unique appeal and our bordering neighbors offer a contrast and opportunity to create different and distinct experiences. Planners who create predictable programs – similar to off-the-shelf products offered by many hotels and destination mangers – will get predictable results. Those who are creative in discovering and using the unique, esoteric aspects of the destination produce highly motivational experiences and get excellent results.

The answer to the dilemma of motivating employees or distributors during difficult times is NOT to eliminate such programs but rather to become smarter in designing them. From a business point of view, cutting rewards in order to save money or to save face is a shortsighted solution. In the best of economies, the most successful incentive travel programs – the most costly of rewards – are designed to be self-liquidating. When we are feeling an economic pinch, making incentive programs self-liquidating becomes a necessity.


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Bob Vitagliano, CITE is President of V Associates, an incentive marketing consulting firm, and is a partner in fourCE.org. He is also the former EVP/CEO of the Society of Incentive & Travel Executives. You can reach him at vassociates@home.com or at info@fourCE.org.