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EEA YouTube Show: IRR ROI Measurement Remains Early Stage, Despite Great Promise

Rick GarlickThree incentive company executives with decades of experience along with a recognized industry research expert agree that the availability of program design capabilities and metrics far exceed the level of knowledge of most people who plan these programs, despite expenditures by organizations of often in the hundreds of thousands or even millions of dollars each year.
Most organizations could do a much better job of measuring the impact of incentive and recognition programs but don’t because: there is little pressure to do so until new management comes in and asks questions; there is often a lack of access to or analysis of data that could demonstrate value; and there is almost no training of any kind on Jacque Salentine Busbyincentive and recognition design in business education. On the other hand, pressure from investors and regulators for stakeholder management disclosures, and the availability of Enterprise Engagement technology that puts all the levers of engagement on one platform promise to revolutionize measurement in the same way customer relationship management elevated sales and marketing practices and analysis. 
These are some of the key findings of the Enterprise Engagement Alliance BMC (Brand Media Coalition) YouTube Show featuring Rick Garlick, Principal  Consultant, Richard Garlick and Rick Conner Associates, and Chief Research Advisor, Incentive Research Foundation and incentive and recognition company executives Jacque Salentine Busby, Founder and CEO of 32 year-old Luxe Incentives; Rick Conner, Senior Vice President, Employee Engagement for 12-year-old Incentco; and Lincoln Smith, Chief Strategy Officer, HMI Performance Incentives.
Lincoln SmithEver since the ROI Institute was founded in 1992 and the Society for Incentive Travel Excellence first published the Master Measurement Model about a decade later, the incentive, rewards, and recognition industry has had at its disposal a growing body of research and methodology on how to measure the qualitative and quantitative impact of incentive, recognition, loyalty and other programs. See also the Incentive Research Foundation. Yet, surveys of corporate end-users, incentive, and recognition companies find frequently that many programs undergo little serious rigor in return on investment or other measurement.  Has this changed? According to these panelists, not enough.
Says Garlick, “The barrier is most often with the clients. Unfortunately, they don't have the access to the data in a format that they can put on paper to clearly measure results.” Adds Conner of Incentco, “Unfortunately, clients don't have the resources to get all the data they need to really know what’s going on. They’ll ask, ‘How much time who's going to do all this? If it becomes too big to them, they’ll just say, if it’s not broken, why fix it.”
Jacque Busby of Luxe Incentives says she began focusing on return on investment over 20 years ago when she saw that companies were often reliable customers until a new CEO or CFO came along who saw the big line item as low-hanging fruit to cut. “I realized that if our clients weren’t going to do the measurement themselves, we were going to have to try to measure it for them.”
That’s how Lincoln Smith of HMI Performance Incentives sees it. “Because we focus on the business-to-business and sales sectors, it’s a little easier to measure results. In many cases, companies will start by measuring a shift in market share. That’s certainly one of the ways that they can identify some ROI but in many cases they don’t take it to the next level to understand the long-term impact. Clients often don’t have an appetite for that type of analysis and don’t want to change, even though incentive programs are all about creating lasting change.”
All the panelists agree that the focus on measurement has gradually increased. “And here’s why,” says Garlick. “In 2008 after the great recession the industry got caught with its pants down. We had things like the AIG effect when suddenly incentive travel was under fire and a boondoggle, right? And then you had politicians who were saying nasty things about incentive travel, and there was not a strong comeback by the industry; they hadn't thought enough of these things.” He believes the research investment has paid off because the programs were much less drastically cut during the pandemic than one might have expected.
All the panelists agree that the impact of Covid, more working from home, and high employee turnover have placed a greater emphasis on people management and more receptivity to metrics related to retention, referrals, and other indicators of performance. Smith still believes though that more attention is paid to metrics in channel and sales incentives than in non-sales employees. “Sales and channel engagement are a lot more performance oriented, so we are seeing stakeholders across the board having more interest and demand for analytics.”
Three factors may accelerate demand for program design and measurement, say the panelists.
1. Enterprise Engagement technology that enables companies to much more easily correlate data from different stakeholders on surveys, feedback, communications, learning, collaboration, referrals, wellness, recognition, etc. correlated with turnover and referrals.
2. Growing pressure from investors for organizations to have a more strategic and systematic approach to the management of their stakeholders and to disclose more specific information on their practices, metrics, and other outcomes.
3. The coming European Union Corporate Sustainability Reporting Directive that promises to have a significant impact on stakeholder management and reporting as the European GDPR (General Data Protection Regulations) privacy laws have had on marketing throughout the world.
To Contact the Panelists
Jacque Busby
CEO, Luxe Incentives
Rick Conner
Senior Vice President, Employee Engagement, Incentco
Rick Garlick
Principal Consultant, Rick Garlick Associates
Chief Research Advisor, the Incentive Research Foundation
Lincoln Smith
Chief Strategy Officer, HMI Performance Incentives
Host: Bruce Bolger
CEO, Enterprise Engagement Alliance

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