Making Incentive Travel Work
By Vincent Alonzo
Many industry experts who utilize a variety of rewards often cite travel as the best incentive tool. Yet, most incentives do not offer travel as an award option. According to a recent study from the Forum for People Performance Management and Measurement on awards selection, 21.7 percent of manager respondents use group travel, mostly as a method to increase sales. The reason this number isn't higher is because when asked how they want to be rewarded, people will often say cash. Travel also has a higher per-employee price tag—around $3,000 for the average incentive.
Companies that do use travel rewards, however, continue to do so because they know they work.
Travel builds brand identity and culture inside the organization. You can't get that through merchandise. You can't get that through cash; it disappears. There are no shared memories, no pictures around the water cooler, no reliving the moment. No emotional tug.
A Maritz case study of the commercial division of its client Toro showed that over 10 years, sales growth averaged 19 percent in years when a luxury trip was offered versus 12 percent in non-promotion years; increased profits amounted to millions of dollars over the decade; and winning distributors tended to have higher customer satisfaction scores.
But as travel costs rise, and corporate spending scrutiny continues, it's more important than ever for companies to maximize the effectiveness of their travel programs. Here are a three ways to do that.
1. The first rule for incentive planners is to know your audience. Of course that means knowing the demographics of your group, but it goes much deeper than that. Many
companies are running their own internal studies on potential winners to find out what will really motivate them in order to design more effective travel programs. Last year, Maritz launched its Travel Insight tool, which does just that, and found that there's a large segment [of the population] that really wants family programs.
Another interesting finding from the Maritz initiative is that not everyone is positively motivated by the opportunity to have face time with the CEO or other members of senior management, a key element to nearly every travel program.
2. Give them options. A result of catering to a more diverse participant pool is that programs today give earners greater free time and more individual choices. Five years ago, you used to have more programs using large motor coaches, but today, trips are increasingly personalized. But choice goes beyond free time and numerous activities on an incentive trip. One of the Carlson Marketing Group's automotive clients chooses to give its dealers a selection of as many as 30 different one-of-a-kind trips each year rather than one big group trip. Options have included a family trip to Beijing with a fly-away component to Xian (home of the Terra Cotta Warriors), a trans-Atlantic cruise on the QEII, a guided motorcycle trip through the Pyrenees Mountains, a stay at the Four Seasons' tented elephant camp in northern Thailand, and a trip to Zanzibar.
3. Remember—rules are made to be broken. With prices escalating, companies have to be careful when they set the rules for a travel award that the bar isn't raised so high that most people won't be able to achieve it.
Airfare is going up as we speak, and hotels that used to be two-hundred-fifty dollars a night are now up to four hundred. Instead of needing a twenty percent increase in sales, now participants will need to achieve a twenty-five or thirty percent increase to qualify for a trip equal in price to one from two years ago. That's demotivating.
One way to combat this is by changing the rule structure. There's nothing worse than knowing when it comes out who will win. Stagger and tier the program, not just on top but in the middle too.