Why Your Incentive Program Will Outlast the Current Downturn

 

Economic conditions can have a serious impact on the incentive industry and the latest economic downturn is no exception. But a recent white paper, “Why Incentive Programs Endure Recessions” from the Incentive Performance Center (IPC), in reviewing past Incentive Federation studies argues that there’s little evidence of a significant negative impact to the industry resulting from past downturns. There is some impact in the early phases of a recession as companies cut back and fewer participants qualify for rewards, but business generally rebounds swiftly as companies turn to measurable, cost-effective programs to meet sales and marketing goals.

The IPC white paper looks at why incentive programs often thrive during times of economic stress, and in particular, why smart companies will continue to use incentive companies to drive business even while cutting budgets in other areas. Specifically, it makes the argument that there are five basic reasons to continue to use incentive programs during a downturn. These include:

Low fixed costs, with variable costs driven by performance – and a high potential return.
The ability to reach target audiences effectively.
The relative ease of measurement of incentive program outcomes.
Flexibility.
The potential for both short- and long-term results.

The IPC warns that success is not guaranteed, and that companies should seek competent professional help to help ensure that their incentive plans will be successful. For a copy of the white paper, click here, or visit the IPC Web site at www.incentivecentral.org.