Feature: Performance improving for motivation

If you try Googling “motivation”, the top companies listed reflect how motivating staff and customers is embraced by all kinds of specialists – team-building, management consultants and employee benefits appear alongside vouchers and marketing services. Consolidation in this fragmented sector has reflected the diversity of specialisms that feed into motivation, with the largest groups now offering more than just reward programmes. The Grass Roots Group’s portfolio includes training, benefits and mystery shopping, while Motivcom, the group that includes P&MM and AYMTM, has swallowed up businesses in areas such as customer publishing and incentive travel.

“Within Motivcom, we have been looking at a whole range of businesses that you wouldn’t naturally put into this sector but they are dealing with people performance and people motivation issues,” explains director John Sylvester. “There will be an increasing trend towards that consolidation.”

Staff incentive schemes are still sometimes delivered by marketing communications agencies as an add-on for a consumer-facing promotional campaign, but pitches to potential clients normally feature specialist motivation companies. “We do see other people out there, but they tend to be more communications agencies that have gone into new media,” says AYMTM director Natalie Gunson. “They have developed a website but are buying vouchers from someone else.”

The growing dominance of web-based incentive schemes has brought a number of IT-led companies into the motivation sector such as ipoints.co.uk, Corporate Rewards and Incentive Direct’s iD-points. “It’s always good to see new entrants,” says Grass Roots chairman David Evans, whose own company has been investing in online platforms. “There have been a few organisations change to be more in tune with motivation and the incentive market.”

However, Jonathan Haskell, chief executive of recognition company Michael C Fina, believes that, as demand for structured motivation programmes grows, specialisation will become the norm. “This is a specialist industry just as you go to a different agency for advertising, media buying or PR. The days of marketing communication agencies trying to do everything are diminishing, and people are now seeing it very much as an industry in its own right.”

Haskell’s own company started off supplying products for promotions and incentives but has evolved, first into long-service awards and now into broader reward and recognition schemes. “In the last few years, the whole thing has come round to much more total recognition,” he explains. “It went from rewarding loyalty after 25 years to actively seeking to reward employees and motivate and inspire them.”

Just as long-service awards are now about more than carriage clocks and watches, the whole reward landscape has evolved radically over the past few years. Web-based schemes allow for online catalogues that can be regularly refreshed and offer far more choice than a printed version. “As the sector has grown, businesses need to be more imaginative and flexible in motivating their staff with a wide variety of different rewards to suit their audience at various levels within the organisation,” says Robert Barker, commercial manager at ipoints.co.uk, which runs online reward programmes. “It could be a straightforward reward of cash or vouchers, but equally they could offer time-off in lieu, and there will always be those that want more classic and aspirational rewards such as travel and great days out, or those that lack the patience to earn such high-ticket items and instead go for small products such as books, DVDs and CDs.”

Leisure and packaged “experiences” are growing in popularity, says Catherine Forrest, business incentives manager at House of Fraser. “This trend reflects people’s need to do something different and exciting. We live in a fairly affluent society, so it’s the incentive that’s a bit out of the ordinary that often turns people on.”

Motivation company Maritz has been developing its offer of VIP experiences as incentives, such as its Breakfast at Tiffany’s luxury shopping trip. “We are increasingly offering experience-based activities as sales incentive rewards,” says Paul Brown, incentives specialist at motivation company Maritz. “Choices are greater now than ever before, with options available such as week-long cookery courses in Tuscany, paintballing in tanks and a flight in an Albatross training jet in Prague.”

Reward catalogues also have to reflect the increasingly global nature of incentive programmes – a product that appeals to someone in Dudley may not appeal to someone in Dubai. Michael C Fina’s online solution is now in 125 countries, available in 16 different languages, while Globoforce, a specialist in cross-border programmes, operates across all five continents.

UK motivation companies have extended their reach through corporate deals, such as Capital Incentives & Motivation becoming part of Accor Services and the international Accentiv’ network. Grass Roots has made more strides globally than any other British motivation company, with acquisitions and expansion taking it to the rest of Europe, the Middle East, North Africa, North and South America and, most recently, India and China.

“There’s a clear trend for internationalisation of rewards,” says Evans at Grass Roots. “More and more multi-nationals, such as banks and IT companies, are coming to us asking what can you do in different territories.”

Gunson says the move towards more cross-border programmes is one of the drivers of growth at AYMTM. “Companies may have various different programmes running, and we can consolidate them for the whole of Europe,” she explains. “You can go into one big company and find they are running 15 or 20 incentives, with each site manager doing their own thing, but consolidating it gives them stronger buying power.”

In its statement to the Stock Exchange in September, Motivcom pointed to “healthy increases in overall market expenditure” in the areas in which it operates. Sylvester stresses that, although some of its client wins come from competitors, there is a substantial amount of new employers and manufacturers investing in motivation. “They are new entrants to the market in some shape or form, usually businesses that are doing it themselves and the task has got too big or cumbersome so they have decided that outsourcing is a better route,” he explains. “People tend not to start off on year one spending millions, so we will be working with these businesses over a period of time to develop the strategy in this area and grow them.”

The increasing investment in motivation comes from a steady acceptance of its value to overall business performance. “There has been a steady growth in the use of motivation to achieve employee engagement and ultimately business improvement, and its awareness and importance has consequently risen in the boardroom,” says Mike Davies, director of performance improvement at motivation and communication company BI. “With this comes the need for accountability, and the full evaluation of the efficiency of investment in motivation.”

BI’s own measurement and analytics team has doubled in size since it was formed four years ago, focusing on measuring both return on investment and return on objectives. “Once upon a time having a fantastic idea that was supported by coveted rewards was enough. Now we need to propose not only a fabulous idea and reward platform but also a solid financial business case,” Davies says.

This approach signals the way forward for winning over more organisations to the value of structured motivation programmes. “Return on investment is essential to demonstrate the credibility of the motivation industry to its external onlookers,” Davies says. “The motivation industry needs no convincing on the merits of measuring the success of programmes, but it is important to demonstrate to the wider audience the contribution motivation makes to the strength of the economy as a whole.”