Kaizen (pronounced “kigh-zen”) is the time-honored practice of continuous, incremental improvement. In the software industry, it’s the practice of actively improving designs, code, processes, and everything else, continuously, now and forever, to create a complete customer experience. The principles of the Kaizen Software Manifesto are:

1. Make continuous improvements in every aspect of the business.
2. Actively pursue a superior, complete customer experience.
3. Continually improve designs, code, and processes.
4. Strive to increase agility (binshou) while reducing costs.
5. Use the Deming Cycle to minimize disruption from change.
6. Prevent errors (poka-yoke), in software and in business.
7. Respect people, leverage expertise, and trust staff.
8. Reward suggestions, improvements, and progress.
9. Always move forward.

At IncentiveDirect, we’re embracing Kaizen principles in the development of our incentive systems.

The recent two-and-a-half percentage drop in VAT won’t make a difference to customer spending, but it could make your incentive campaign.

Instead of passing the saving onto a customer in the form of lower prices, why not use the money that would have gone to the VAT man to fund your sales incentive? Those 2 and a half percentage points won’t be noticed by the customer, but they could drive your sales team or reseller to help make that sale. Discounting will only get you so far – customers are more likely to buy from knowledgeable and friendly sellers they can trust. An incentive that inspires and encourages sales teams can be the most effective way of driving sales, and is more sustainable than lowering margins.

Think of the drop in VAT as a boost to your incentive fund.

A recent white paper from Incentive Performance Center, entitled Why Incentive Programs Endure Recessions, offers some interesting views on why motivation schemes are more recession proof than other forms of marketing.

The paper explores five areas why ‘savvy’ companies turn to incentives during a downswing:

1. Low fixed costs, variable costs driven
   by performance, high potential return
2. Ability to effectively target audiences
   (no pay and spray)
3. Relative ease of measurement
4. Flexibility
5. Potential for both

It’s inevitable that some companies will see an incentive program as a ‘cost’ that should be cut during a recession. Others will perhaps turn to cash, to make up for a lack of pay rises. But as we have hammered home before, cash is a poor incentive (see “Still thinking cash is king?” and Why cash kills motivation). A depressed economy won’t suddenly make cash an effective incentive tool.

Elsewhere, the latest Bellwether report from the IPA, shows marketing budgets slashed by over 40%, with the biggest loser the media (eg PR and advertising).

Sales promotion, which would include incentives and motivation activity, though down, is faring better than most other forms of marketing except online. Thus, the budgetary share for sales promotion has increased. Sales Promotion now accounts for 9.2% of overall spend, compared to Main Media (30.3%), Direct Marketing (24.9%) and ‘all other’ (25.7%).

It’s an ill wind that blows nobody any good, and those companies that can deliver cost-effective incentive solutions can gain market share and increase their customer base even more when everyone else is batttening down the hatches. There’s business to be won in a recession, no doubt.