For nearly as long as sales itself has existed, there have been incentive travel programs. Rewarding top salespeople with a group experience at a world-class resort in an exotic locale has proven to be an effective means of driving results.
The formula itself has remained consistent over the decades:
- Pick a desirable destination.
- Set goals for program participants.
- Stir up excitement with an energized launch.
- Keep participants interested with regular updates.
- Execute the event flawlessly.
- Repeat the process with a new destination the following year.
Simple enough, right? Not so much.
Adapting to today’s dynamics
In a world where change seems to be the only constant, new dynamics of the corporate work force (the invasion of the millennials) and dramatic changes to travel itself (increased risks as well as options) make developing a successful incentive travel program more complex than ever.
When executed well, however, incentive travel remains one of the most powerful motivational tools available. A 2017 report from the Incentive Research Foundation (IRF) estimates nearly 40 percent of U.S. businesses use incentive travel in some manner to reward and recognize their top-performing employees and channel partners.
Budgets continue to grow as well with over one-third of planners now having per-person budgets from $3,000 to $4,000 and almost 40 percent of planners having per-person budgets of $4,000 or more. In addition, the net increase of planners increasing versus decreasing budgets in 2017 is 30 percent.
(Editor’s note: An extensive study on incentive travel spend and trends by the Society of Incentive Travel Excellence, the IRF and Financial and Insurance Conference Professionals was completed in August. Results from that study will be reported in our Nov/Dec issue.)
Not just for sales teams
A significant trend regarding incentive travel is companies broadening the scope of program participants beyond sales. Didier Scaillet, chief executive officer of the Society of Incentive Travel Excellence (SITE), attributes this to a shift toward people being businesses’ main asset and to the effectiveness of incentive travel to drive performance and engender loyalty.
“There is an awareness on the part of companies that cash is important, but from a corporate culture standpoint there is far more to be done. Incentives in the broader sense of non-cash rewards are being used to drive training, the adoption of new practices, increase product knowledge, establish brand loyalty and more,” Scaillet says. (Read our full Q&A with Scaillet on page 46.)
The tight job market of the past several years, and the rise of recognition-hungry millennials in the workplace have raised business leaders’ awareness of the importance of rewarding non-sales employees.
“Non-financial incentives can be a little harder to calibrate from an ROI perspective, but studies have shown it is precisely these types of rewards that create a longer baseline of happiness in the recipients versus financial rewards,” states Edmund Blogg of U.K.-based marketing consultancy Clockwork Content.
After all, if best-selling business author Daniel Pink is to be believed, we’re all in sales in one way or another. In his book, “To Sell Is Human: The Surprising Truth About Moving Others,” Pink states that while one in nine workers are in sales positions, the rest of us also spend our working hours persuading, negotiating, and pitching. (Of course, Pink also famously argued that rewards don’t motivate, but let’s not get diverted.)
Non-sales staff interact with customers so broadly it is widely held they are as much of a factor in customer retention as the sales rep. Writing about small business for the Houston Chronicle, Tracey Sandilands states, “Offering incentives to non-sales staff to help generate leads, support the sales team and achieve additional sales will motivate them to accept the training you offer. If your non-sales staff members know that by working to understand the selling process and your products and services they can not only help to grow the company, but earn additional income, they will be enthusiastic brand ambassadors and lead generators for the business.”
Involve participants in selection
In order for a travel incentive program to provide a true incentive, the travel opportunity must be desirable to the participants. The destination must be something that will appeal to your employees. It only makes sense to get input from your workers.
Leaders at Gavel International, a meetings and incentive management company, suggest asking program participants what kind of experience would motivate them, what travel experiences they have already had, and how the company can create a unique experience that will be new, different and enticing.
Keep in mind the best incentive travel rewards may differ between senior team members and younger workers who earn a more moderate income or who have different travel interests. From an ROI standpoint, it may make sense to have different tiers, but if you go this route, be sensitive to employees’ fear of missing out (FOMO).
Budgeting for a travel incentive can be tricky. An error in budgeting on a first incentive travel effort can kill a company’s desire to run future programs. Some organizations plan a budget of 3 to 5 percent of each winner’s annual income, according to Gavel. (See the chart on page 30 for ways companies are reducing their incentive travel spend.)
“The best incentives have open budgets, meaning anyone who qualifies can win. Rules with open budgets tend to be more effective as reps can challenge themselves — as their business grows, so do the rewards. Open budgets tend to lead to improved morale due to the general ability for reps to feel like they have a chance at winning and that will lead to more sales,” says incentive industry veteran Tim Houlihan.
Open budgets may sound imposing, but understand that Houlihan emphasizes incentive programs should be self-funding. The incremental sales from your incentive should pay for the investment in the program. “Incentives are not an expense,” he states. “If they look like an expense, sharpen your pencil, measure them properly, and build a compelling ROI.”
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