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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.

Holiday Parties Thrive—For Now

By Vincent Alonzo

By now most of us have emerged from the tryptophan haze that comes from eating too much turkey at Thanksgiving--just in time to gear up for the corporate holiday party circuit that will start in about a week. A recently released survey of human resource executives reveals that 79 percent of companies will be planning holiday parties this year. That is virtually unchanged from a year ago when 80 percent of companies were planning parties, according to the annual holiday party survey recently released by Challenger, Grey & Christmas, Inc., a Chicago-based outplacement consultancy.

What has changed is the percentage of companies willing to spend more to celebrate the holidays. Nearly one in three companies (32 percent) plan to boost party budgets this year, up from 23 percent in 2005. The average increase in this year’s budget is 16 percent. Only six percent of firms are cutting the party budget.

It’s not surprising that companies are willing to spend this year. According to the Congressional Budget Office (CBO), before-tax corporate profits are expected to increase 30 percent this year. In the third quarter alone, the average annual profit growth among companies in the S&P 500 is expected to come in at 14 percent.

However, could this year’s holiday parties be the last hurrah? The CBO is forecasting that corporate profits will begin a trend of slower growth after this year. According to the CBO, corporate profits will fall from 13 percent of gross domestic product in 2006 to about nine percent in 2016. But perhaps that slower growth rate won’t affect holiday parties in the future. After all, these events are not just about celebrating good fortune. They are also a way for companies to show employees how much their hard work is appreciated.

So there is a chance that parties could grow even more elaborate--if organizations recognize the value of the opportunity a holiday party presents for senior executives to socialize with the rank and file employees. And you, the meeting/event planner, are just the person to champion to management the benefits of mingling and having informal interaction via fun events such as holiday parties.

Use Meeting Demographics to Your Advantage

By Vincent Alonzo

Though I pride myself on being a cynical journalist, I must admit I’m a bit of a sucker for those fairy-tale news stories about working stiffs winning the lottery. That’s why I still remember a Powerball drawing from about a year ago where a group of co-workers won about $300 million.

But the angle I remember most from the story was how the media made such a big deal about how these winners exemplified America's shifting demographics. Although the winners came from the heart of the country--Lincoln, Nebraska--the winners hailed from a variety of countries and ethnicities.

It’s easy to identify today’s increasingly influential ethnic population groups: Hispanics and Asians. And it would also be fairly easy to identify the food & beverage choices that would make a meeting a more fulfilling experience for these groups.

But in reality, when it comes to demographics, we’re too hung up on ethnicity, race, and especially age. You can barely pick up a magazine or watch a news program without seeing some think piece on how Gen Xers are different from Boomers, who are different from Gen Yers, who have nothing to do with Tweeners, etc...

But throughout the country, there is another group whose growing numbers bring a host of new realities to planning meetings but who, for the most part, are ignored by meeting planners—and marketers and the media too, for that matter.

Today, there are about 100 million adult Americans who are single. To make that enormous number even more important, these Americans head up nearly 53 million households, or nearly half of all American homes. In comparison, Hispanics—whose growing numbers are widely documented—make up a population one-third as large.

So considering the needs of this invisible segment can have an enormous impact on the success of your meeting. 

Here are some numbers: More than half of all singles are women. Nearly two-thirds of singles have never been married. Nearly one-quarter of singles are divorced and 14 percent are widowed. Nearly 30 million Americans live alone. These single person households account for slightly more than one-quarter of all households. Some 12 million Americans are single parents; more than 80 percent of them are women.

The numbers are large, which means the challenges and opportunities are equally significant. Just off the top of my head, here are some of the opportunities: Those single parents would probably be very interested in on-site children programs and pre- and post packages to turn the meeting into a quality-time vacation with their children. Also, many of those who live alone might respond to pillow gifts such as one-cup coffee makers, or items that help them pursue hobbies or leisure activities. And all of them would appreciate more networking activities that have a social component, such as dine-arounds.

Unlike ethnic groups, these shoppers won't come with special accents, languages, or customs. But the opportunities are just as real with this group, for those planners who choose to grab them.