Small Biz, Big Incentives

<B>Small Biz, Big Incentives</B>
<I>SITE Cites Raising A Window Of Opportunity</I>

By Chris Davis

Group incentives traditionally are considered the domain of large insurance and automotive companies, which spend millions on lavish trips designed to tantalize and reward their employees. But one small Texas wholesaler accomplished the same goals on a very tight budget, and reaped an additional $875,000 and a SITE Crystal Award to boot.

The Blind Maker, an Austin-based wholesaler of window coverings, has employed incentive trips for its dealers since shortly after its 1981 inception, said co-founder and vice president Priscilla Hicks. Some trips have proven more successful than others, based predominantly on the allure of the destination.

Some of Hicks' past incentive trips included cruises of the Caribbean and Pacific coast and a stint at a Texas dude ranch, but The Blind Maker's dealers indicated Hawaii as a preferred destination--a more expensive and risky proposition than Hicks' usual locales.

"I love seeing all the beautiful trips all of the incentive houses provide," Hicks said. "Unfortunately, my customers are not in the same budget so I have to be a little more creative and a little more personal."

Hicks set four objectives that would determine the success of the incentive program: The trip had to pay for itself; longer-term commitments from dealers needed to be developed; overall sales by participating dealers had to increase 15 percent; and the number of new dealers needed to grow by 25 percent.

Hicks' program easily surpassed all four goals.

"The theme was well thought out, it was well communicated and the message was persistent," said SITE judge Ulla Buchner-Howard, managing director of New York-based UBH International Services.

The risks of the program were allayed somewhat when Hicks raised the minimum sales requirement needed by dealers to qualify for the trip. She also extended the qualification period to a full year, much longer than previous years, which would keep dealers committed to buying The Blind Maker's inventory for a longer period of time.

"Twelve months is a longer period than normal for an incentive drive," Buchner-Howard said. "Usually, the length is for a specific quarter or for six months. Twelve months takes a persistence of communication to the participants."

Hicks promoted the program heavily at trade shows, in trade publications and through marketing efforts like monthly brochures in which dealers could accumulate qualification points by answering trivia questions.

A special, Hawaii-themed window covering was introduced to dealers, sparking new interest and a large sales boost to The Blind Maker.

The incentive program was an unqualified success. Not only did the increased sales cover the cost of the trip, it generated an additional $875,000 for The Blind Maker's coffers. Overall sales by participating dealers increased almost 34 percent, shattering Hicks' 15 percent goal.

Also surpassed, to say the least, was Hicks' goal of a 25 percent increase in new dealers--that number increased by 220 percent during the incentive promotion.

For her efforts, Hicks was rewarded with a first-place Crystal Award from the Society of Incentive Travel Executives in the "Creative Use of Incentive travel to Solve a Marketing Problem" category.

"Her superb execution of incentive fundamentals provides the evidence needed to turn skeptics into believers," said Wendy Moffatt, SITE's immediate past president.

Hicks was the only winner not aligned with an incentive house and the only winner to develop and execute her own company's incentive program.

"I was leery of entering because I was competing against veteran incentive houses that make a living doing what I do part-time," Hicks said. "But I know that incentives work and I know my customers well."

The key to the success of The Blind Maker's incentive program, Buchner-Howard said, was that she took the time to find out very specifically what would motivate her dealers--specifically, a trip to Hawaii.

Though the budget for the Hawaiian incentive was larger than The Blind Maker's previous incentive programs, the fact that Hicks extended the dealers' qualifying period and researched their motivations lessened the risk considerably, said Buchner-Howard.

"Whatever budget you have, do your homework and find out what you can do to motivate them," Buchner-Howard said. "If you don't have the budget, you have to be creative. You can have great programs without traveling to destinations where the travel cost alone is exorbitant. It's all about communication and research and studying your market before you go and implement the program, which in turn will also help with your negotiations. You just have to talk to people to find out why they should choose you instead of somebody else. It could be very little."

Hicks' entirely in-house operation, though, may be bucking a trend. She's the only corporate Crystal Award winner, and some incentive houses and independent incentive planners report strong years for corporate outsourcing.

"We're definitely seeing more outsourcing," said Bill Boyd, president and CEO of Dallas-based Sunbelt Motivation & Travel. "We picked up a lot of business in 1999 that we didn't expect, and we don't see that changing this year."

As the domestic economy has rolled along, Boyd said, many companies have shifted their focus from saving money at all costs to increasing productivity. "Companies want to focus on their core business and outsource everything else," he said.

That said, Boyd added that companies choosing to manage their group incentive travel in-house are not making a mistake--though, depending on the structure of the travel department, they may invite challenges in negotiating.

"If a company has its corporate travel department handle the group incentive program, you may run into trouble," Boyd said. "A group incentive specialist can negotiate in an entirely different style than a corporate travel manager. Let's say you have a group of 400: You should be able to get complimentary tickets, reduced freight rates and a promotion allowance, among other things.

"But corporate travel managers don't negotiate things like that, because they're looking at things like net-net deals. So the potential to leave a lot of things on the table is there."

Other Crystal Award winners announced at SITE's annual international conference last month in Las Vegas included USMotivation of Atlanta, whose president Michael Hadlow picked up three awards for two separate incentive programs developed for the employees of Diebold Inc.

Hadlow's company picked up a fourth for a London Pacific Life & Annuity program. Harith Wickrema, president of Oreland, Pa.-based Harith Productions, picked up two Crystal Awards for an incentive program designed for Centocor Inc.