Offering brand-name goods greatly increases the chances of success for any incentive program, and they're a good bet for customer loyalty and recognition programs, too.

T A B L E     O F     C O N T E N T S
Overview Statistics Trend Toward Quality Case Study: Audio Company Aims High Power from Co-Branding Smart Move for the Right Brand Case History	How to Check Out a Brand Associations Trade Shows Books Publications Other Resources Related SMN Articles

OVERVIEW

Companies spend more than $46 billion a year on incentive programs to motivate employees, channel partners, and customers. At the same time, 60 percent or more of all incentive catalog redemption are for brand-name products. So do the math. Making branded merchandise the centerpiece of any motivation program is a proven way to create excitement. Whether it's a sales incentive plan, recognition of employee achievements, or a program to reward loyal customers, the right selection of brand-name goods generates a special appeal. Put simply, give 'em what they want, and they'll work harder for more.

STATISTICS

Companies are turning increasingly to incentive programs to motivate their employees, distribution partners, and customers. Promo magazine's "Industry TrendsReport" for 2005 estimates that spending on premiums and incentives rose 1.5 percent to $46.5 billion in 2004, and the prospects for 2005 and beyond were for a significantly greater increase.

TREND TOWARD QUALITY

More and more, companies are being selective as to how and to whom they offer incentives. Among the major trends over the past few years has been a push toward rewards with high perceived value, as well as increased use of "lifestyle" incentives, such as trips, electronic and digital equipment, and sporting equipment. Watches, luggage, electronic devices, brand-name apparel, and other high-end items are also popular.

Recognition of this trend has led many incentive companies to put a focus on branded products. Companies like Rymax Marketing Services and others, for instance, represent high-profile brand-name manufacturers in generating special-markets business. They take brand names and attempt to match them to the appropriate clients.

CASE STUDY: AUDIO COMPANY AIMS HIGH

Here's how one company, keenly aware of the value of its own brands, incorporated other branded goods in a motivational campaign. A manufacturer of high-end audio products wanted to increase retail sales of a specific luxury stereo system during the all-important holiday season.

The best way to achieve that bump, it surmised, was to create an attractive incentive program for salespeople at audio-video specialty outlets, department stores, catalog operations and Internet sites. But rather than reward them with cash or its own products, the manufacturer assembled an eclectic collection of products.

It was not just any collection of products, however. Convinced that people are attracted to high-quality merchandise, the company selected brand-name prizes geared to participants, believing that any sales incentive program needs to be targeted for the audience to be sure that the goal and the objective of the program is defined from the get-go.

One of the company’s objectives was to increase the monthly run rate through its existing distribution to balance its inventory position by year-end. So it selected Meade Instruments binoculars and telescopes, Jeep bicycles, Movado watches, Sentry safes, DSI remote-control cars, Konica cameras, and other things at various prize levels. The program exceeded expectations, and the cost was actually under budget.

 

POWER FROM CO-BRANDING

Tie-ins between brands (co-branding) play an important part in the motivation equation. Companies have found that there are inherent benefits in associating their brand with other well-known images, icons, and brands. In fact, brand associations can be very helpful to consumers in their processing of information about a brand. The old saying, 'You can tell a person by the company she keeps,' applies here.

SMART MOVE FOR THE RIGHT BRAND

For brand-name manufacturers and service companies that have not already done so, the time is ripe to enter the special markets arena that supplies premiums and incentives for programs. To the extent that they provide attributes of strength—quality, consistency, relevance—there's opportunity, if they do it right. Plus, most manufacturers are trying to find alternative revenue streams, and incentive programs are a fairly simple and cost-effective means to that end.

Because there are significant costs involved in company's operating a special markets department on its own, many will outsource the effort to service firms, such as Rymax and others. These companies provide a wide range of services, including program design, product selection, tracking, fulfillment, and measurement of results.

HOW TO CHECK OUT A BRAND

This checklist will help you make sure that a program using branded merchandise meets your business objectives:

• Clarify your objectives. For incentive programs, objectives should be specific, such as increase sales or raise the number of new accounts.
  
  
• Determine why you need branded products. Use of brands distinguishes recognition from cash incentive or compensation strategies, and it reinforces your own brand by associating your company with other powerful brands. Rather than resorting to discounts in order to get attention, brands add value.
  
  
• Assess your need for brand affiliation. Choose brands that support your own. If your brand stands for quality and integrity, select products that reinforce those messages.
  
  
• Create and implement a strategy. Develop a means of achieving and measuring goals, including a time line. Designate an individual, a team, or an outside supplier to oversee implementation. Also, have a plan for qualifying people for awards or recognition, and keep the rules simple.
  
  
• Provide clear communications. Make people aware of the program's benefits, reinforce the branding message, and supply useful information to help participants achieve the desired goals.
  
  
• Have a fulfillment strategy. Late delivery, unavailability of desired products at redemption time, or shoddy presentation can bring down otherwise perfectly executed programs.
  
  
• Measure results. Companies that take the time to develop rigorous measurement efforts will benefit by getting information they can use to improve subsequent efforts.

ASSOCIATIONS

For related associations, go to the Industry Association Listings page.

TRADE SHOWS

For information about trade shows and seminars, go to  #9510, Calendar of Industry Events.

BOOKS

To order any of the highlighted books through Amazon.com, click directly on the book title.

The Brand Mindset: Five Essential Strategies for Building Brand Advantage Throughout Your Company, by Duane E. Knapp. Consultant Knapp shows how the best practitioners, including such household names as Starbucks, Citigroup, Whirlpool, Lexus, and Hallmark, shrewdly develop and maintain their brands in the face of ferocious competition. 304 pp. October 1999. McGraw-Hill Professional Publishing.

The Future of Brands: 25 Visions, edited by Rita Clifton and Esther Maughan. A group of 25 worldwide opinion-makers, from CEOs to athletes, comment on the concept and future of brands. 208 pp. March 2000. New York University Press. 

Brands: The New Wealth Creators, edited by Susannah Hart and John Murphy. The authors of 20 essays look at branding from a wide range of perspectives, from the creation of a new brand and development of brand names through packaging design and advertising. 256 pp. March 1998. New York University Press.

Brand Warfare: 10 Rules for Building the Killer Brand, by David F. D'Alessandro and Michele Owens (contributor). D'Alessandro, CEO of the John Hancock insurance group, offers principles for improving a company's understanding of brand usage. 208 pp. March 2001. McGraw-Hill Professional Publishing. 

Infinite Asset: Managing Brands to Build New Value, by Sam Hill and Chris Lederer. The authors unveil the Brand Portfolio Approach, a strategy that they claim increases the value of brands by exploding them beyond the boundaries of their division or their parent company. 240 pp. September 2001. Harvard Business School Press.

PUBLICATIONS

For a list of relevant publications, go to the Industry Publications page.

OTHER RESOURCES

Interbrand is an international branding consultancy specializing in a range of brand-related services and activities. The Web site is a combination of practice areas, products, and services to help clients create, manage, and value their brands. Go to http://www.interbrand.com.

RELATED SMN ARTICLES

For information related to this article, go to 9110, New Product Launches.