In this issue…
MANAGEMENT
• The Problem with Praise and Rewards
NEWS
• What impacts word-of-mouth marketing?
• For better leads, aim low
TRENDS
• The end of cold calling?
• Shunning good quality at a fair price
TIPS
• The surprising source of your best referrals?
• How to make an intangible product more tangible
• Why now is the time to start thinking about Christmas PR
• The secret to selecting the best job candidates
• Does increasing pay increase productivity?
• Much more…
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MANAGEMENT
The Problem with Praise and Rewards
A “recognition gap” exists between what employees want and what employers are giving them.
FOR THE LAST three decades, employee surveys have pointed to recognition as one of the critical ingredients for employee satisfaction and retention. Companies spend more than $100 billion annually on merchandise and cash rewards — accompanied by supervisory praise — in the belief that incentives make their employees feel needed and respected.
This “recognition gap” exists because when employees ask for recognition, they are expressing the need for something much more complex than a gilded plaque or a service pin. To employees, the word “recognition” refers to the presence of systems and practices that reaffirm their worth to the organization.
During 30 years as a management consultant, I observed the negative effects of processes that reduced recognition to a series of robotic activities. This convinced me that the crucial step in addressing the lack of recognition in the work force is to listen to employees who are on the receiving end of these misplaced processes.
What Recognition is Not
Praise is not recognition. The practice of using praise to meet an employee’s desire for recognition is neat and tidy — but wrong. Praising employees for work behavior or results leads primarily to embarrassment, distrust and poor management/employee relations. Employees sense the manipulation behind constructed positive comments and feel controlled and devalued by the experience.
Merchandise is not recognition. Do we really think that when employees tell us they want recognition, they are expressing a desire for awards, jackets, cups, hats or pens? Merchandise does nothing more than trivialize employees’ efforts and contributions to the organization. The theater of ceremonious appreciation is rejected by everyone involved — except the reward and recognition industry itself. The whole farce is a misguided attempt to apply an inappropriate solution to a poorly defined problem.
Money is not recognition. Money may be our society’s scorecard, but it is no substitute for dignity and respectful treatment. Despite the argument that money is the most desirable form of recognition and the solution to all performance problems, the fact remains that many people who are well-compensated still feel that they are trading their self-respect for cash. Employees should be well-compensated for their contributions as well as receive respect, appreciation and support.
What Recognition Is
Recognition is partnering. Canned, off-the-shelf performance improvement programs emphasize strategies to get employees to perform. These programs are inherently condescending — and employees know it.
Wouldn’t it be easier for managers to have productive discussions about work with their employees than to continually strive to execute a contrived reward agenda? Performance dialogue acknowledges employee contribution and validates the work as meaningful. In these discussions, employee performance feedback evolves. Whether the feedback is positive or negative is not defined by the intentions of the supervisor; valid feedback is data-based information about performance. If a person has done something that improved an outcome, this will surface during a discussion of the work.
Recognition is involvement. Asking employees their opinions to help solve problems or implement improvements, and providing them with opportunities to discuss decisions minimizes the social distinction of management hierarchy.
Recognition is respect. Much of the turnover in business and industry is created by the inappropriate behavior of disrespectful supervisors and managers. Individuals who have been able to succeed through intimidation — those whose employees will perform to any standard to avoid having to interact with their boss — are all too numerous in management.
Recognition enables individualism. The policies, regulations and procedures that are required to manage some organizations can make employees feel like cogs in a machine. A direct relationship exists between the company’s responsiveness to individual needs and the potential for that organization to engage employees. To truly recognize an employee, the organization must be flexible, supportive and responsive to special circumstances.
A Recognition Solution
Employees feel recognized when — as an outcome of how they are treated by the organization — they consider themselves as partners. Recognition comes as a result of providing employees with opportunity, promotions, equitable pay, safe working conditions and challenging work.
So when employees ask for recognition, they are asking for no more than their employers expect for themselves: honest communications, respectful treatment and acknowledgement that they are people with feelings, personal lives and the desire to truly contribute to the company.
Jerry Pounds is a management consultant with over 30 years of experience in applying positive reinforcement, reward and recognition strategies to business and industry. In his new book, Praise for Profit, Jerry reveals the demotivating and discouraging effects that praise, rewards, awards and incentives can have on employee performance. Visit his website at www.praiseforprofit.com.
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NEWS
What impacts word-of-mouth marketing?
To facilitate word-of-mouth (WOM) marketing, it helps to understand your market’s WOM behavior. A new study sheds light on the likelihood and manner in which consumers spread WOM.
The study examined consumers by gender, generation, employment status and income level. Although the men surveyed made more daily contacts with others than the women, women were more likely to share a positive experience with a business (91% compared to 83%) or recommend an enjoyable product (95% compared to 89%). Women tend to prefer verbal communications to other forms of contact, while men tend to prefer email.
Furthermore, full-time employees make as many daily contacts as part-time employees and stay-at-homers combined. Stay-at-homers tend to make more daily visits to chat rooms and message boards. In addition, those with household earnings of more than $100,000 were more likely to make recommendations than those earning less.
One-quarter of young people visit chat rooms or message boards daily and 17% of their contact activity is done through instant or text messaging. Gen X and Boomers tend to use email more often and are more likely to spread positive WOM. These groups are ripe for viral email campaigns. Surprisingly, seniors visit more message boards and chat rooms than Boomers and nearly equal activity to Gen X. This is likely due to their desire to reconnect with family and friends, and to discuss health and other issues of aging with peers and professionals.
Source: Lucid Marketing, May 2006
For better leads, aim low
Which leads are more likely to close quickly — C-level execs and those who say they “authorized purchases,” or the lower-level managers who “recommend purchases”? According a new study, the lower-level folks may be your best leads.
Technology search resource KnowledgeStorm phoned 11,295 business execs right after they filled out online registration forms to access white papers, webinars or product specs. The purpose of the call was lead qualification. Each lead was rated from 1 to 5 with 5 being ready-to-close and 1 being tire-kicker.
Overall, 17% to 20% of prospects reached by phone turned out to be very hot leads. However, people that described themselves as having “recommendation authority” were much more likely to be in that hot-lead bucket than people who described themselves as having “purchase authority.” In fact, on average the lowly sounding “recommenders” were three points higher in the buying cycle.
This may seem counter intuitive, but it makes a lot of sense. The people with the real power are doing the research as opposed to the leaders who may just be rubber-stamping the results, or perhaps making a final choice from a very small number of options.
Source: MarketingSherpa.com, May 4, 2006
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TRENDS
The end of cold calling?
Entrepreneurs have a new way to address an old problem: how to sign up clients when you have small or nonexistent sales resources. Today, new software tools and online social networks and services are helping small companies generate sales leads without the usual legwork and the often-inefficient cold calling.
For instance, Anu Shukla at RubiconSoft Inc. used an online social-networking service, LinkedIn, to get a foot in the door at two large companies. The service allowed her to search through lists of her contacts’ contacts for potential leads. When she found names at the targeted companies, mutual acquaintances gave her an introduction. For many small companies, services like LinkedIn, as well as Jigsaw, Spoke, ZoomInfo, Plaxo, Hoover’s and iProfile, are much more effective than simply cold calling.
Some tools let you find sales leads through mutual acquaintances. Others are more like beefed-up phone directories, offering exhaustive lists of corporate personnel and their contact information. Still others offer comprehensive background information on prospective clients, culled from press releases, news reports and other sources. Some offer a combination of these features. Most of these services charge a fee for full access to their information — in some cases, hundreds or thousands of dollars. But many offer stripped-down free versions as well.
Source: The Wall Street Journal, May 19, 2006
Shunning good quality at a fair price
If your product’s position in the market is “good quality at a fair price,” you may be positioned for failure in the near future.
“In the U.S. and around the world, the consumer markets are bifurcating into two fast-growing pools of spending,” writes author Michael J. Silverstein in his new book, Treasure Hunt: Inside the Mind of the New Consumer. “At the high end, consumers are trading up, paying a premium for high-quality, emotionally rich, high-margin products and services. At the low end, consumers are relentlessly trading down, spending as little as possible to buy basic, low-cost goods and services.” Between both piles lies a vast range of mediocre, medium-range products that Silverstein claims is doomed to decline.
According to Silverstein’s research, the amount of spending on trading down was approximately twice the amount of trading up. In every category he and his colleagues looked at (30 in all), both ends of each market offered huge opportunities, but the middle appeared to be in decline. For example, the middle market has shrunk 12 market-share points for the car business, 40 points in the television market, 16 points in the U.S. washer market and on and on.
The middle market is still huge, but it has been shrinking over the years and is expected to decline another 5% or 6% a year over the next five years. On the other hand, the top is expected to grow at 10% to 12%, and the bottom is expected to grow at 5% or 6%.
Also, from a consumer’s point of view, they don’t see trading down as really “trading down.” Instead, it is about consumers living a rich, balanced life, being careful with their money, and buying a handful of products where they trade up and others where they trade down.
Source: Knowledge@Wharton, May 10, 2006
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TIPS
- What’s the best source for new referrals? Most business owners assume it’s their existing clients. However, while clients can be a good referral source, they really don’t have much motivation to send you business on a consistent basis. In most cases, the best referral sources are businesses like yours that sell to the same target market. Select non-competing businesses and suggest building a strategic referral partnership network. You likely have something they want or can at least propose a way for them to get more of what they want. This also will allow you to fill in more of your clients’ needs by pointing them to members of your private referral network.
Source: John Jantsch, www.DuctTapeMarketing.com
- Service providers can improve customer retention and gain more referrals by finding ways to make their service more tangible. Think about how you could bundle your service with a product that would be appreciated by clients. For example, a home-insurance agent could provide a labeled videocassette for clients to video their possessions, or a carpet cleaner could provide an effective spot-cleaning kit for sudden mishaps between cleanings. The little things can make all the difference to the person making a purchase decision.
Source: Vicki Clift, Marketing News, 250 S. Wacker Dr., Chicago, IL 60606
- Design brochures and ads that speak directly to your customers’ needs. Legendary direct response writer Herschell Gordon Lewis says one of the most effective headlines is “We’re solving the problem of….” This tactic works best with a highly targeted market with a specific problem.
Source: Sales & Marketing Report, www.ragan.com
- Time to start thinking about Christmas? It is if you have a product or service that can be featured in a holiday gift guide. Due to the long lead times for these special sections, many media outlets start looking for gift ideas early on. Some common deadlines include July for magazines, September for wires and syndicates, October for newspapers and November for television. When pitching your idea, see if you can fit into more than one gift category. Also, always check to find out who is responsible for the gift guide and what type of information they would like to receive. Some may want a press kit and product samples; others may just want the pitch.
Source: www.CherryCommunications.com
- Select the best job candidates by “listening for the electricity.” According to entrepreneurship expert Ray Smilor, after confirming intelligence and competence in candidates, it’s important to look for attitude, for the electricity that is part of the joy of work. In interviews, ask questions that reveal behavior and illuminate feeling. First, rather than ask what someone “would do” if something was needed in the future, ask about how they actually dealt with a real issue in the past. Second, ask questions that reveal motivation, such as what a person is proudest of, what they consider their most significant achievement and where they think they’ve made the biggest contribution. If you listen for the electricity in their answers, you’ll hear not only details about behavior, but also gain insights into their attitude about work and life.
Source: www.eVenturing.org
- Arbitration is not always the answer. Many contracts require that disputes between the parties be solved by arbitration. This helps to avoid a costly legal battle and assures the dispute won’t be made public. But there are disadvantages. While touted as faster, that’s not always true. And there is no appeal from the arbitrator’s ruling. Talk to a disinterested attorney before agreeing to a contract with an arbitration clause and consider the motives of the other party. Chances are, they believe they’ll do better with arbitration than going to court.
Source: Small Business Taxes & Management, www.smbiz.com
- Do you make this critical sales mistake? When a prospect says they’re not interested, do you say “Can I give you a call in six months or so?” Out of guilt, most prospects will say “yes” even though they have no intention of ever buying from you. Of course, you realize this, too. Six months later, you uneasily skip past the contact’s record along with all of the other names you regularly recycle each day. A better approach is to determine up front if these prospects will ever buy from you. Ask, “Mr. Prospect, under what circumstances would you ever see yourself considering another vendor?” Their answer may open the door for a potential opportunity down the road. If they won’t answer your question, write them off, move on and feel good that you got a final decision.
Source: www.BusinessByPhone.com
- Will increasing your employees’ pay increase their productivity? A new study suggests workers receiving pay raises increase their efforts only temporarily. In an experiment, University of Chicago economists promised two groups of data-entry workers a six-hour assignment at $12 per hour, but at the start raised one group to $20. Result: The better-paid workers entered 27% more data — but after 90 minutes, the increased productivity vanished.
Source: www.Forbes.com
- Every page on your website is potentially a homepage. Due to links from natural search engine listings and message boards, visitors may enter from any page on your site. Take a look at each page. Is each designed so that it’s easy for a visitor to navigate the site and make a final purchase or information request? If not, revise the content to ensure that it engages users to learn more and take the next steps to obtain the product or service. Hyperlink key terms within the content that push users deeper within the website. Finally, make sure your company contact form is on every page.
Source: www.MarketingProfs.com
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