With budgets being cut, and squeezed from every possible angle for all business types, there is a lot of advise on the web as to clever and sensible ways to approach  new consumer promotions and incentive programs.

For really simple, clearly defined advise on consumer promotions and incentives, Kochie’s Business Builders website has some great advise. Such as:

The key elements are as follows:

•  Set specific objectives
•  Develop a clear plan, covering how you will meet your objectives
•  Ensure the incentive is appealing to your target market
•  Ensure the incentive provides synergy with your brand
•  Implementation
•  Review

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I read in the BRW magazine yesterday that 53% is the number of Australians who won’t cut discretionary spending during 2009. In such a downturn this is not bad news. A survey by MasterCard in the APEC region shows that an average of 10 to 20 per cent of Australians spend their income on discretionary items and are more reluctant than most nations in the region to give them up. Big household and vehicle purchases are being delayed, but fashion, dining and entertainment remain untouched so far. Interestingly (according to James Thomson from Smart Company), Myer has delivered a champion profit result for the six months to 31^st Dec 08. Net profit in this period rose 5.3% despite a 3.7% fall in sales.

So this tells me that although we are experiencing tough times, lots of businesses are and will be in good standing through the downturn. It’s all about making the most of it and focusing on the positives. I’m not saying that it’s a retail bonanza but as a mater of fact, 40% of people will put their stimulus bonus towards their mortgage or credit card debt, or pop it into the bank (according to the Australian National Retailers Association). Which means 60% of people haven’t been spooked into saving their money or getting ahead with their credits and will be looking at adding their $900-$950 dollars into their discretionary spend. Read some newspapers and you will find that Big W, Coles, Target and Kmart have been reporting sales increases. Big W had a one-third higher last Thursday compared to the same day in 2008.

Businesses, small, medium and large are already advertising stimulus package deals. For example, Mercedes-Benz is advertising to tradesmen stimulus package deals on vans, and the beautician near work has a $10 manicure stimulus package. There’s no difference, they both are seizing the opportunity and I am certain they will drive traffic into their store.

Motive8 commissioned an independent survey of 500 SME’s on incentive marketing to further understand the Australian market.

An overwhelming majority of Australian SME’s believe employee rewards increase loyalty and performance but only half actually implement rewards for staff, the survey found.

88% of SME’s see the business benefit of rewarding employees and a further 85% agreed that incentives and rewards could improve their bottom line. Yet only 52% actually provided employees with rewards in recognition of their performance and only 52% are likely to implement an ongoing employee motivation program.

While it seems while SME’s understood the power of incentives there seems to be a disconnect between knowledge and action.

This is a real wake-up call for SME’s in a tight Australian job market. With employers facing tough competition for skilled workers, business needs to be covering all the bases in attracting and retaining staff.

There’s no doubt that losing staff is a blow for any business. We asked respondents how long they thought it would take to get a replacement for a key staff member up to speed, and 65% said 3-6 months, 24% said 6-9 months, and 7% said 9-12 months.

While these figures represent a significant impact on business, respondents may be underestimating the cost of replacing a key employee. Only 7% understood the real picture of 9-12 months. No matter what the position the employee held it, the time it takes a new employee to get up speed ultimately comes off the SME’s bottom line.

We also asked the SME’s about their communication with employees and they rated themselves pretty highly – 73% said their communication with staff was excellent or good and a further 25% said it was satisfactory.

With only 12% marked themselves below average or poor for communication and 74% believe their employees are happy enough without needing to implement an employee motivation program we can only assume that either there’s a lot of very satisfied workplaces or that some businesses may need to re-examine their relationships with employees.

58% of survey respondents agreeing that setting targets for non-sales roles is difficult. This confirmed Motive8’s beliefs that this was an issue for many businesses and online incentive programs need to be built with maximum flexibility to tailor its programs so that they can be used for both sales and non-sales staff.

I noticed a lack of new blog articles last week, due in part I presume the USA 4^th of July holiday. (Or was it because of the rain / arrival of USS Kittyhawk / Australia beating NZ in Rugby / new financial year / other insert here.) As a consequence, I had been searching extensively for other sites to read and found these two Australian sites which are excellent reads.

One blog site, flying solo is full of good information for ’small business’ (it is actually aimed at soloists, those running a business on their own) but articles and topics can be applied to business in general. Especially refreshing was sage advice on the ‘health’ side of running a small business - taking a break for example - something from my experience few Small Business owners believe is productive. (NB: It is productive as the mind and body needs to refresh. It also might help you avoid a heart attack!)

The NSW Small Business web site is a well of information, provided by the New South Wales Government. From starting a business, marketing and finance, to subjects as directed as I.T., Exporting and Legal - this site is a very valuable resource and interesting reading.

Motive8 recently commissioned an independent survey of Australian Small to Medium Business owners. The subject was Incentive Programs and 2 of the early questions surprised us:
The overwhelming majority - 87 per cent - of respondents agreed that incentives/rewards increase employee performance and/or loyalty…however, just 52 per cent of respondents provide rewards of any type in recognition of their employees’ performance.