In the past decade or more, businesses have scrambled to keep pace with a technological revolution that has introduced a cornucopia of “must-have” sales and marketing tools. Budgets have been created for social marketing efforts; sales teams have been equipped with highly sophisticated mobile presentation devices; entire marketing plans continue to be built around custom content and automated marketing software, which determines who to send sales support material to and when to send it; and varied customer maintenance programs have become so ubiquitous that they are as embedded as the telephone and referred to with three letters — CRM.
Businesses are investing millions of dollars in these systems, and rightfully so. Laggards risk being left on customers’ and prospects’ doorsteps peering in as the competition holds informative, account-winning presentations.
In the midst of this frantic race to keep pace with competitors, there is a sales tool that’s as timeless as a briefcase carrying a brick of hot index card leads (ode to you “Glengarry Glen Ross”) — a tool that continues to produce significant incremental business year after year for companies that use it, yet is not embraced by more than half of all businesses.
An effective tool that’s widely ignored
Long before cloud-based sales presentations allowed an industrious rep to showcase her goods to a prospect in Los Angeles at 8 a.m. and one in Cleveland at 10 without leaving her office, incentive travel was inspiring top sellers to push themselves even harder and middle performers to put in their best year ever — and then do it again next year.
And yet, a new survey of B2B executives conducted by Sales & Marketing Management magazine in partnership with the SITE Foundation found that a significant percentage of businesses (55 percent of the nearly 300 respondents) do not use incentive travel as a motivational tool and don’t plan to in the near future.
That’s an astounding statistic given the high praise that came from users of incentive travel in the same study.
“Travel always gets us to our target revenue goals,” one respondent stated.
“Cash is easier to implement within the sales team, but travel develops relationships and allows for sharing of effective business practices,” another respondent said.
Fully 95.5 percent of incentive travel users in the survey said their programs were “very effective” or “effective” in achieving their objectives. As a result, 46 percent have used incentive travel for 10 or more years and another 25 percent have used them for four to 10 years.
Can’t afford not to
Many of the non-users of incentive travel in the Sales & Marketing Management survey do use incentives — cash, gift cards and merchandise in that order. The non-users cited cost and administrative complexity as the main reasons for steering clear of incentive travel.
Interestingly, the non-users that once used motivational travel also cited cost, lack of ROI and difficulty of managing programs as the reasons for discontinuing them. (Only about 12 percent of non-user respondents used incentive travel in the past and stopped.)
Longtime users of incentive travel told Sales & Marketing Management that citing cost as a reason for not sponsoring a program shows a clear misunderstanding of the self-sustaining nature of incentive travel programs. “We run about 20 incentive travel programs every year. If you set your qualifier levels properly, they pay for themselves,” says Jim Getscher, director of corporate travel, meetings and events for Mutual of Omaha.
Getscher has worked at Mutual of Omaha for 49 years and has held his current position for 35 years. He says rewarding top salespeople with group travel is embedded in the insurance industry’s culture and has been for decades. Salespeople know what incentive travel programs other insurance companies offer and it becomes an essential recruitment and retention tool.
“It’s educational for our winners and for our senior management. This is the one time of the year that they actually get together and share ideas in terms of sales methodology and sales techniques,” Getscher says. “It’s a reward, but there is also a lot of education that happens.”
Aligning goals with business objectives
“It should be self-funding,” agrees Janet Traphagen, executive vice president of sales and marketing at Creative Group, Inc., an incentive management company that works with Getscher and Mutual of Omaha. Traphagen says her sales team does not get a lot of pushback on ROI from clients, but she admits they end up preaching to believers more so than looking to grow business by converting non-users. “We don’t hear that excuse a lot, especially from a person who is responsible for the results. If you take a piece of the incremental growth that stems from these programs, that’s the reward piece.”
Kurt Paben, senior vice president and head of business and employee loyalty at Aimia, a major provider of incentive travel programs to Fortune 1000 companies, says the Sales & Marketing Management/SITE Foundation research is cause for the industry to increase awareness of incentive travel’s effectiveness. Paben also serves as president of the SITE Foundation.
“It’s clear that our industry needs to do a much better job educating corporate end users on why incentive travel is an important business tool that can be used to change behavior and create a measurable and verifiable return on investment,” Paben says. “Compared to other marketing initiatives, incentive travel programs have the highest level of cost accountability.”
Not surprisingly, those companies that can pinpoint the ROI of their incentive travel investment are also the ones that incorporate specific goals that match up with current business initiatives. “I have clients that do this very well — they go far beyond generic growth and a simple ‘sell more,’ ” says Traphagen. “It may be tied to new products and those products earn triple points in the incentive program. It’s really about moving the strategy forward.”
One of Traphagen’s clients, a medical device company, rotates a representative from each of its six business units to participate in quarterly board meetings and report on the corporate achievements that can be credited to the company’s incentive programs. “Rarely do you see the responsibility for this shared to that degree. They do it very intelligently,” Traphagen says.
Michele Samoulides, senior manager of worldwide reward and recognition programs at Microsoft, says the tech giant has always included service personnel as well as salespeople in its incentive travel programs, huge undertakings that bring groups as large as 1,000 or more around the world. “We’ve looked closely at the overall impact that these reward trips have and it goes beyond increasing sales to having a huge retention component to it. It’s a way we can keep our top performers, engage with them and let them know that management sees their value,” she says. (Read a full Q&A with Samoulides here.)
Samoulides adds that follow-up with program participants provides ample anecdotal evidence of their value. “We dig deeper and ask them if attending this program motivated them to want to exceed their goals again next year. Does it make them feel more loyal to Microsoft? Is the motivation and reward factor working? Those scores tend to be crazy high, so it seems to be working.”