Collateral Damage?

The conservative columnist George Will once said:

Being elected to Congress is regarded as being sent on a looting raid for one's friends.

Well, I'm not sure our business has anybody "sent on a looting raid" on our behalf. I'm more of the mind that they may decide to make an Example of us by rescinding or modifying Section 274(J) of the Internal Revenue Code.

For those of you who are Tax Law-Challenged, 274(J) is the section of the code that allows employers to deduct the cost of employee recognition, safety, and length-of-service awards, and also exempts the recipient of said award from paying taxes on the first $400 of the award's value.

Getting rid of 274(J) might mean a reduction of employee recognition programs. Or it might not. I'm unsure if any company has a recognition program just because it's tax-deductible. But there is a possibility that existing programs might be reduced, or not expanded, if the tax credit goes away.

This is something we all need to get used to--it's the Collateral Damage of the Great Debt and Budget Debate of 2011-12. As Congress attempts to patch a $1.5 TRILLION hole in our nation's finances, they are allegedly looking at everything. But the farm has so many Sacred Cows grazing on it only those with a lobbying voice will survive unscathed.

That's where our business comes in. We have a teeny-tiny voice, and even that is speaking multiple languages. What's good for the Recognition Space isn't necessarily good for the Loyalty Space, and reps and suppliers like me don't know what to say.

The Gang of 12 that will be swinging the Budget Weed Whacker might cut a significant piece of our business down and never know it. We'll be collateral damage on the road to fiscal sanity. We are limited in what we can do, but one thing is to lobby our brains out.

That takes money, and the Incentive Federation is collecting it to pay for someone to take our case to the Gang of 12 and the rest of the Looters. You can be part of it by going to www.incentivefederaton.org and selecting the "Incentive Legislation Campaign" part of the site.

Those who think this is an academic argument are wrong. What Congress decides will have an impact on our business--we just don't know what or how intense it will be.

So, while Jerry's Kids need your help, you might also think about YOUR kids--the ones who depend on your income for food and private tutoring. A few dollars invested now might make a difference in how much of our blood gets spilled this fall...


Pete

So, 300 Incentive Professionals walk into a bar...

Greetings from San Diego and the 11th (or 12th?) Incentive Marketing Association Executive Summit. 300 professionals from all parts of the market have gathered here to teach, learn, and network.

It's an amazing gathering, even more so because even though I've been in this market for some time (longer than I'd care to admit, to be candid), I see SO many people I don't recognize. For someone allegedly "in the know", it's somewhat disquieting.

What it does is underscore the complexity of the business. I often say that our market is a "simple business that takes a lifetime to learn". The Summit brings that into sharp relief, as I get to interact with people who are part of our market but are "invisible" to me most of the time.

Many in our business don't come here--they believe there's nothing to learn from all those %$&#@ Gift Card Providers. But the legendary Business Analyst Michael Corleone once said something about keeping your friends close and your enemies closer. Since most of the people who do what I do consider Gift Cards the Antichrist (and that's one of the kinder phrases I've heard).

But that's very parochial and potentially dangerous attitude. To not know what other parts of the business are doing leaves you exposed to "blind-side" hits you never know is coming. I have learned more in the past 48 hours about what's going on in the business than I had in the prior 48 weeks.

Not everything I've learned is Unicorns and Rainbows. The End-User is seeking new and different ways of rewarding and recognizing their employees, and the traditional merchandise model is not as dominant as it was. The portent of new trends in reward/recognition do not bode well for the old model.

I'm a big proponent of "constructive destruction"--in the rubble of the old model is opportunity. The more I know, the more I can construct a view of the market and where it's heading. If I'm smart and lucky I can surf the wave just right I'll be ahead of my competition.

Michael would be proud of me, just before he put a horse's head in my bed...


Pete