The “R” word and learning to face it.
It seems like yesterday I was sitting with my former boss and trusted mentor, Steve Damerow, discussing the 2008 recession that was sweeping the nation. The incentive industry was taking a hard hit. Travel incentives were being placed under a microscope and scrutinized by leaders in Washington. Amazon was backing out of the incentive industry as an online reward provider. Millions of Americans were losing their jobs and homes. Yet there I was, trying to push for marketing campaigns around the science of incentives. I had tons of research supporting my claims. Steve sat across from me, quietly smirking. He let me finish and finally said, “Nichole, I understand what your research suggests. But let me talk to you about what my years of experience have taught me.” We then discussed how gift card rewards programs were the necessary corporate incentive when times get tough because they were the rewards that people wanted and needed.
Damerow explained “when the economy takes a hit, cash flow becomes strapped. CFO’s and Operations heads will take over. Budgets will be cut. And do you know which department budgets and staff typically goes first? Marketing.” That was a wake-up call. He then said something I’ll never forget and wholeheartedly believe to this day: “The CFO’s and the companies who make the decisions to cut marketing during a down economy aren’t smart. A good CEO is partnered with a wise CFO and they know that down markets are the best time to grow their brand – when the competitive landscape isn’t nearly so saturated.”
In that conversation, he got me thinking differently for the first time in my adult career. You see, I was only 26 and not really worried about the economic forecasts and the dreaded “R” word – recession. Truth be told, I was a naïve 20-something with a useful skillset, but too low on the totem pole to demand a higher salary. I wasn’t worried about losing my job. I also had my parents to fall back on. Simpler times. But Steve was right, during the hard times, we could still think of the psychology behind incentive gift ideas, but I had to understand that the demand was different, as people needed to survive.
Today, over a decade later, we are faced with the “R” word again – thanks, COVID-19. Goldman Sachs Group Inc. “expects the U.S. economy to experience a far deeper slump than previously anticipated as the coronavirus pandemic hammers businesses, causing a wave of mass unemployment. The world’s largest economy will shrink an annualized 34% in the second quarter, compared with an earlier estimate of 24%, economists led by Jan Hatzius wrote in a report. Unemployment will soar to 15% by mid-year, up from a previous forecast of 9%” they wrote.
While Q2 predictions sound grim, these same economists, are also saying they “expect a stronger recovery in the third quarter, with gross domestic product expanding 19%.” Fingers crossed! And in the meantime, we’re all worrying about keeping our teams engaged, and our brands top of mind. Twelve years ago, my boss taught me about gift card incentives. He said “you like the employee incentive gift cards we hand out?” Yes, of course. He followed by saying “Nichole, you’re no different than anybody else. People can use them and they are good for businesses. This is when you want to help people pay bills and put food on the table.”
Given the economic climate of today, now is a good time to invest in your brand, and gift card incentives are a great way to do it. To say thank you to your employees for going the extra mile and dredging through the trenches, to your dealers and contractors for pushing your brand. It’s time to reinforce your brand, your message and to stay on top of your market.
Gift card incentives are a great marketing investment today, as we are all home under the “shelter in place” ordinances. But which gift cards should you consider?
Use gift cards to motivate your customers and employees today!
Incentive Gift Cards – lifestyle rewards that help businesses and keep us sane.
Let there be food – delivery!
Give your employees and customers gift card incentives that include food delivery services like Uber Eats, Door Dash and Grubhub. Grocery stores and chain restaurants that deliver or offer curbside pick-up are also good options. These incentive gifts will help keep your teams safe at home, while also supporting local businesses. If you are already running an incentive program, ask your incentive company to turn gift cards on for your rewards catalog. Most of us have them. If not, reach out to an incentive program provider and ask what their options are.
Another great way to say thank you is entertainment. While people across the globe are practicing the art of social distancing, entertainment is in high demand. Virtual gift cards for entertainment providers like Netflix, Hulu, Redbox, Spotify, etc., are great options. These rewards will keep your channel partners and employees’ home, cuddled up on the couch with their families and pets, and give their minds a little reprieve as they binge watch the shows they love.
Home improvement – time to remodel and repair.
We’ve seen an uptick in memes and social posts from consumers across the US stating that 2020 vacations will no longer look like relaxing summer trips to the beach, and more like long overdue home remodeling and improvement projects. Gift cards to stores like Home Depot or Lowe’s will allow quick run ins to get the tools necessary to take care of those DIY home projects that so many Americans are planning to do. They also offer delivery, which is a huge plus right now.
Using an Incentive Management Company
At Extu, our gift card rewards catalog offers hundreds of plastic and e-gift cards. Using an incentive provider to fulfill your gift cards needs right now will make your life much easier. Your audiences can choose the gift cards they want to use, and your CFO’s and operations teams can rest assured your program is meeting compliancy demands – no more throwing gift cards in a drawer and forgetting about them. In addition, when you are ready to start running promotions again (come on Q3!), you will have this technology set up and ready to go, with a team in place to help you execute. It’s a win/win.
Today, more than ever, we need to motivate our employees and sales teams to stick with us. We need to be sticky with our dealers and distributors, with our contractors and customers. Keep recognizing and rewards your teams. Stay top of mind and build brand loyalty now. And if you think gift card incentives could be a good way to do it, connect with Extu, we’re nice!