I’m sure you’ve all heard of the blunders of corporations who didn’t do enough research while branching out into international markets.
One of the most common blunders (which actually turns out to be an urban legend) is Chevy’s Nova sales flopping in Latin America.
The tale goes that since “no va” in Spanish means “doesn’t go”, the car company was unable to achieve its projected sales in the market.
Although this tale is tall, it is still widely believed and taught as an example because the principles remain tried and true.
Research into the culture and language of a market that a company wishes to branch into is essential. The incentive industry is no different. Understanding what kind of rewards motivate your specific audience can make the difference between success or failure for a program.
Cash vs. Non-Cash Cultural Perceptions
This brings us to one of the most debated topics in the incentive industry: whether cash is a good motivator. We’ve been on both sides of the argument, but recently put out an article on why you should Ditch the Cash.
We have found, and research has shown, that non-cash incentives tend to work best for most audiences within the United States. This is due, in part, to the perception in our country that cash as a reward is not a true reward.
Rather than seeing extra cash as a way to treat ourselves, the bonus check often turns into an extra investment or a way to pay for bills or errands. What seems to truly motivate Americans is what’s commonly referred to as the Pink Cadillac. This concept refers to the glamor of being rewarded with a new, flashy car upon reaching a certain status at work.
The Pink Cadillac is why non-cash incentives work within the U.S. But what about in other countries?
Having run a number of international programs, we’ve found that what motivates people in different cultures and countries varies widely. For instance, in China, it is frowned upon to depict clocks or watches in an award catalog because, given as gifts, they’re considered as a reminder of death.
You also may need to pay attention to the religions in the area. An example of this would be Hinduism, a religion prominently practiced in India, where the cow is typically considered to be a sacred animal. It would be prudent to consider this while putting together giveaways and reward options within the country, refraining from offering something like a gourmet steak dinner which would probably be very offensive.
Not all nuances are cultural, however. For instance, in Quebec, Canada, it is required by law to have French and English translations for many communications. Anyone looking to run a program within the city of Quebec would be smart to understand the law thoroughly.
Taxation requirements also change from country to county. So, with all these different things to think about, how can you possibly keep track of what you need?
To help you keep it all straight, here’s a checklist to use when starting up an international program.
International Incentive Program Checklist.
To successfully run a global incentive program, a supplier needs to do the following:
- Ensure that the program is a good fit for every country.
Check and double-check your research into the area, culture, and language. It’s necessary to ensure your incentive program designs and rules’ structure are relevant, engaging, and motivating to your local audience.
While it is tempting and much easier to simply copy and paste one country to another, this is a strategy that guarantees failure. While standardization in some instances is important, your program must be customizable to the region.
- Ensure you have adequate local team support.
It is critical to support local stakeholders so that they understand how the program works and how it can help them. It’s important to have the adequate amount and caliber of staff in your global offices to support each region.
Skills of these employees must include adept knowledge of the local languages and culture, expertise in project management, and a readiness and willingness to assist customers and stakeholders alike.
Without resources and expertise in the region, it can take hours or even days to address issues that could otherwise be fixed in a matter of minutes.
It’s also important to use local fulfillment of rewards over global. This way you can avoid tax and duties, regulations, or delays in getting the rewards and keep that user satisfaction high.
- Ensure reward options are motivating and appropriate.
Just like you would do within your own local country or region, research can also be done internationally to figure out what will motivate your audiences best.
Maybe you’ll find out that your Peruvian participants are all hikers. In this case, a reward catalog, or even just some giveaways, that center around outdoor activities would probably drive the most engagement from your crowd.
Regarding the Cash vs. Non-Cash discussion: of course, if your research points only to cash-based rewards, cash will be the best route.
However, it’s often most prudent to offer a great variety of options for your local audiences.
- Pay attention to tax reporting regulations.
Always work with trusted, local legal and tax experts to find out what the tax implications of running incentive programs in various countries will be.
For example, in the U.S. and Canada, you will need to provide tax documents to individuals to file with their taxes. In Germany, Italy, China, and Japan however, your company may be obligated to report, withhold, or pay tax on the individuals’ behalf.
It can be daunting to start up an international program. You won’t be over there all the time, so how can you ensure perfection? The trick is to follow this checklist and do your research, so instead of dealing with logistical nightmares, you’ll be able to help make all of your participants’ dreams come true.
Interested in starting up an international program? Reach out to HMI at 888.220.4780 or firstname.lastname@example.org to discuss your ideas and logistics.