CEO in Action

Creative Incentive Beats Cash Discount

Terry Neese finds that a little creativity goes a long way in the collecting game. Founder of Terry Neese Personnel Services, a $10 million Oklahoma City-based temporary employment agency and executive search firm, Neese has tried using cash discounts as an incentive for customers to pay early. Yet her oceanfront vacation property is a more effective carrot.

"We bought a beachfront condo in the mid-'80s with the intention of using it as a business incentive.

"About 70% of our revenues are generated from the temp side of our business. That means you're in a more volatile situation because you're paying employees up front and waiting for the customers to pay you later.

"We've tried cash discounts, offering from 2% to 5% off customers' bills if they pay within 10 days. But discounts didn't really seem to be that effective — the condo is a different story.

"The condo is located near Gulf Shores, Ala. (about three hours from New Orleans), on a 34-mile stretch of pristine, white beach. In Oklahoma, the idea of going to the beach is a real treat because the closest waterfront is Galveston, which is about a 10-hour drive. Gulf Shores is three hours farther, but much prettier and not very crowded, which makes for a really relaxing retreat.

"We offer the condo to customers as an incentive for working with us exclusively — and paying their bills on time. We also use it to reward our staff, both for helping place people in jobs and for helping collect money that's due from customers.

"Though it's tough to quantify how much growth has resulted from the condo, our annual revenues have increased from $2 million to $10 million since we purchased the property. So it's certainly been an asset to the business. "In today's good economy, a cash discount isn't that meaningful. But as the pace of business accelerates and adds to stress loads, an opportunity to get away from it all is pretty tempting.

"In addition, I think a creative incentive, like vacation property, enhances relationships with customers. It's more personal, more of a handshake approach to marketing."

Your Peer Connection: Terry Neese can be reached via e-mail at: tneese@swbell.net

This article was originally published in the October 2000 issue of The Edward Lowe Report.


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Your Peer Connection

Terry Neese
tneese@swbell.net

Terry Neese Personnel Services
www.tneesepersonnel.com

Resources

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