Recession-Proof: Motivation and Inspiration
by Aaron Moscoe and John Furnish
Marketing Edge Magazine
January 2009
Recession-Proof: Motivation and Inspiration
by Aaron Moscoe & John Furnish
Dwight Eisenhower once said, “Motivation is the art of getting people to do what you
want them to do because they want to do it.”
Today the importance of attracting, motivating, and retaining employees is undisputed.
Times have changed, and the measurable impacts of employee engagement are now
finally understood, taking this topic from a relatively “soft” and obscure human resource
matter to a respected way to influence employees and company performance.
Progressive sales and marketing professionals recognize that the same principles are
directly applicable to a company’s relationship with their consumers, distributors, sales
and channel partners. They value their company’s “employee brand” which is intrinsic to
their most critical internal and external business relationships.
DO NOT CUT IN HASTE
With the current economic climate, some companies will examine each expense line item
on their income statement to see where they can make cuts. The truth is that making
cuts in haste can be short-sighted, so much so that these cuts may be at the expense of
the company’s long-term opportunities. Research shows that scaling back on investments
in marketing and employee programs is tantamount to being penny wise and pound
foolish.
In boom times where growth tends to come with relative ease, small to medium business
enterprises tend to appreciate growth but are often less concerned about market share,
particularly in fragmented markets. In a stagnant or tightening economy, it’s important
for businesses to focus on market share in order to protect the absolute size of their
piece of the pie. And in order to maintain volume or growth, increasing market share is
crucial. It may sound like a tall order, but the good news is that this is often the easiest
time to do so as competitors are cutting back on their investments in marketing initiatives
and employee incentive, reward and recognition plans.
A recent study indicates that the average cost for lost productivity, attracting, hiring and
training a new employee can be as high as $50,000. Taking this into account, it’s easy to
see why more companies are investing in well structured employee reward and
recognition programs. And a happy employee is a productive one. Increased employee
engagement leads to a more creative, productive and loyal workforce — your employees
won’t want to leave! In a down economy, some companies will cut back, but hold off.
When employees are engaged, believe in the company they work for and enjoy the
culture, they are far more likely to be advocates for the company, participate in employee
referral programs and spread the message by word-of-mouth.
Evidence also demonstrates that increased employee engagement results in higher levels
of customer satisfaction. Customer satisfaction and a strong culture are in turn positively
correlated to company growth and profitability.
From a sales and marketing perspective, there is a definitive relationship between
promotional activities and subsequent sales. Study after study confirms that if a marketer
increases or decreases their traditional share of promotions relative to that of their
competitors, similar changes occur in that company’s market share.
One study showed that organizations that did not cut back on their promotional spending
enjoyed increases in both sales and profitability the following year by an average of 55
per cent and 40 per cent respectively. Marketers who cut back on their promotional
spending did not experience significant growth during the same period and their profits
did not keep pace with those of their competitors who continued to invest in customer
relationships.
Examples in the marketplace are not hard to find. Kellogg’s took over the number one
market share from Post by maintaining their marketing budget, while Post cut back in the
name of fiscal responsibility. Not only did Kellogg’s investment in a recession provide
shortterm results, but that investment has parlayed into market dominance over the long
run.
The micro focus on expenses might suggest that there is room to cut on employee
incentive and recognition initiatives: however, in tough economic times, particularly
where companies have had to trim their number of employees, it becomes increasingly
important to get higher productivity and greater performance from their remaining
employees. These remaining employees need to be assured of their value now more than
ever. Cutting back on incentive programs may cause them to worry about the stability of
the company.
A company’s culture and brand, perceived with the minds of current and prospective
employees, clients and channel partners are important, albeit intangible, assets that are
most often developed gradually over time. Rather than a slash-and-burn approach, which
frequently leaves an indelible mark on culture and brand perceptions, maintaining
employee reward and recognition investments recognizes both the short — and long-term
value and the developement cycle of these important assets.
GET FOCUSED, GET SMART
This is the time to do things smarter. Focus on best practices, such as ensuring that all
company programs and benefits communicate the same message and are aligned with
the company mission, vision and values. re-evaluate current programs to ensure that
employees clearly understand both the behaviours and the outcomes desired and that the
rewards and recognition are linked accordingly.
Show employees that they are valued: reward them with reminders of why they are
valued. such a gift might include a home or family-oriented gift which says that the
company respects the importance of the employee’s life outside of work. don’t forget the
recognition piece as well. It’s a reminder to them that this place is worth the effort.
As opposed to many other areas a company may budget for, one of the unique elements
of a well designed employee, consumer, sales or channel incentive program is that 70 to
80 per cent of the total program costs are variable and only incurred with the desired
results. With such low fixed costs, risks are small compared with the return on
investment beyond the initial set-up costs.
Post-war recessions in North America have lasted an average of 11 months. Companies
that are prudent in the short term, while seeing it as part of their long-term plans, will
emerge stronger.
STAY THE COURSE
The message is clear. For long-run success, stay the course. By maintaining rather than
cutting investments in the short term, companies can take advantage of prime
opportunities to build their culture, strengthen their brand relationships with consumers,
employees and business partners, increase employee engagement, and increase their
future market share. These are the companies that will be best positioned for long-term
growth and success.
