Over the last thirty years, since Ronald Reagan spoke the fabled words, “trust, but verify”, I’ve been fortunate to work with many of the largest companies and brands in the world. Yet, it still amazes me when I see a client or a prospective client fall for the double-speak of some (self-serving) service providers. So, as a public service to all involved in the agency-selection process, be it for employee engagement, customer experience, or incentive rewards programs, here are my “Top Five Most Likely Ways a Potential Vendor is Going To Try and Fool You”.
#1. . “We are global.” – Just because an agency has third-party fulfillment relationships with vendors who deliver merchandise internationally, it does not mean that they are global. One company based in Canada, with an office in California, claims to be “global”. Another, located in Ireland with an office in Massachusetts, declare themselves to be “global”. Yet another is located in Missouri, crossing no border beyond Kansas, and presents themselves as a global service provider. With no bona fide presence in the international marketplace, how does a company truly comprehend the regulatory environment, the cultural differentiators, or the social compact that employers or brands have with their workers, channel or consumers? Simple truth: they really can’t. If you are going to say you are “global”, shouldn’t you really be global?
#2. “Our SaaS (multi-tenant) technology is the most effective and cost-efficient model available.” – Maybe, but probably not. For smaller organizations, with employee or sales force headcount in the hundreds, this approach probably is viable. However, if your organization employs more than a couple thousand people, it probably is going to require that you compromise on your expectations in order to cleanly fit with a rigidly defined technical architecture. A better approach is to find a provider with both SaaS technology as well as the ability to custom-configure a specific system to meet your global requirements, and accommodate more than the limited applications of the multi-tenant system. One size, as you have likely learned from your own, personal experience, usually fits one, not all.
#3. . “We are primarily a recognition agency, but trust me, we can effectively manage your channel and sales force incentives.” – This is akin to having your car serviced at a competent marina. Recognition and incentives have precious little in common, beyond the fact that both, at some point, generally result in an award being issued to someone. Recognition occurs after someone has achieved some milestone or delivered a defined level of performance. Incentives are designed to augment and support the intrinsic drivers of behavior so as to elevate performance over a longer timeline. Being competent in one bears little to support the notion of competence in the other. An effective basis for driving positive, sustainable change requires alignment, the addressing of willingness as well as ability to perform, and specific measurement to mark progress toward an objective outcome. Recognition for behavior, or results or business outcomes requires a totally different mindset, as well as breadth of agency capabilities. Best to dig deeper into the prospective vendor’s specific experience, results, and vertical market experience to find a comfort level that this provider can demonstrate their claims via results delivered for other similar customers.
#4. “We don’t mark up the reward merchandise.” – This is one you come across all the time, especially from the newer, smaller players in the recognition and/or incentive space. The reason they say this is simple: They don’t deliver or provide fulfillment of the rewards offered. Instead, they have a contract with a third-party catalog company which pays the agency a 10-20% commission out of the costs that the client pays for the goods. So, while they don’t add a markup to the third-party provider, they do get paid handsomely for doing little other than forwarding customer orders. And sometimes, they don’t even do that. In either case, you are entrusting your top-performing associates or channel partners to a third party that is singularly focused on delivering award merchandise, or travel, or gift cards, profitably. Yet, you are led to believe this represents a better value. The truth: paying above-market price for awards, so that a commission can be routed back to an agency, is nothing more than sleight of hand. How comfortable can you really be with the knowledge that your most important VIPs are valued solely on the basis of the transaction that occurs when they place an order with a third-party?
#5.. “We offer an online currency exchange for recognizing associates around the world.” – The fact is that this provider may offer a currency exchange process that affords managers to issue recognition awards to employees in far-off locales. But using it is going to cost you…anywhere from 12-18% in the valuation of the currency exchange. One large global gift card provider is quick to boast of their online exchange, but they conveniently forget to tell the client that for every dollar that is converted, between $.12 and $.18 will be re-routed, straight to the supplier coffers. Caveat emptor. Insist on bank-rate exchanges, or be prepared to pay, dearly, with the hidden charges.
The bottom line: Inspect what you expect. With selecting an agency partner to create and sustain engagement with your human capital, your channel partners, or the end-users of your services and products, it pays to look well beyond the claims and the marketing hype. Hopefully you would not presume a potential partner to have solid financial footing without looking into the income statement, balance sheet, statement of cash flow from operations. Just as well, you must dig deeper to verify that what you are told is, in fact, a fact.