INCENTIVE MEETINGS- Reap the Rewards
Author: Carolyn Koenig
October 2007
Features
Strong incentive programs aren’t just good business–they’re a win-win for all.
Success is said to be 10 percent inspiration and 90 percent perspiration. For incentives, which measure and reward success, the formula is similar, only the inspiration is not internally sparked. For meeting professionals who plan these enticing carrots, the inspiration comes from their travels and research. The perspiration part involves creating an incentive that motivates, educates, engages and rewards the recipients in ways they value.
The end result, after all, reflects a behavior change in some way, whether working faster, smarter or more focused. And, “there’s probably no better way than to bring people together face to face, teach them what they don’t know, give them training in a skill; recognize top performers; and at the heart of it, increase sales effectiveness or drive loyalty to the brand,” says Kurt Paben, vice president for business development, meetings, incentives and events for Carlson Marketing Worldwide.
Incentive meetings are not an insignificant share of the market; they represent big business for planners and suppliers: in fact, according to the Incentive Research Foundation, companies spend more than $115 billion a year on incentive programs.
Do they work? According to a 2004 study by the IRF, incentive programs can boost performance by 25–44 percent.
And, according to Bob Vitagliano, executive director of the International SITE Foundation, “there’s no reason to think that has changed today.”
But travel incentives themselves have changed. “Since 9-11, the incentive market has somewhat been rewritten by clients,” says Doug Wheeler, a principal of Summit Performance Group in San Diego. Incentive numbers were reduced drastically at that time, he says, but they’re coming back, albeit in a different way. “Some are straight incentives, but most are being coupled with a sales meeting, something with more of a purpose. [Clients] are taking a group of people, and giving them a lot of free time, but there’s a message and meetings to go to.”
As an example, Wheeler’s company is currently working on a bid for a company in the security software industry. They want to hold a national sales meeting, but also to keep the top producers over for an extra three days at the same property, turning their trip into an incentive. It’s a little different from a straight incentive, he says, but the top sellers will have different-colored badges to ID them, stay in a better-grade room and have different fun. “The company has picked an excellent resort property, with great meeting space,” he says, “but they’re also saving money.”
These trips have changed in other ways as well. Once, incentive travel was strictly sales oriented—as most remain. However, the applications have broadened, Vitagliano says. “More and more, it’s also in the HR arena, the recruiting and retention of employees.” Research also backs up the trend: According to a recent industry study, higher levels of motivation translate into a 53 percent reduction in worker turnover.
Incentives have also become popular management tools to address safety and quality-control issues—and may quickly pay for themselves in cost savings and customer retention.
SHOW THEM THE MONEY?
While your CFO may be interested in the money, cash is surprisingly not the biggest motivator when it comes to an incentive. An extra thou or two in the bank account never hurts, but it’s too easy for recipients to spend it on everyday needs (like gas, tuition payments, etc.) rather than wants (a fun trip for the family). Cash—whether a check or direct deposit—is also perceived as “compensation,” not a reward, and as such, can set up unrealistic expectations for the future.
Plus, there are no bragging rights to cash. Employees don’t run around the office crowing about their $5,000 bonus (what if someone got more?). However, the beauty of an incentive trip or cruise is that it offers not only a unique experience that’s hard for employees to replicate, but also provides weeks of envy-quality stories about that luxurious cruise ship to Alaska, the dramatic iceburgs, the photos...
And there’s also something of even longer-lasting importance. According to nearly 78 percent of respondents to a 2005 Incentive Federation Study, travel is remembered longer than cash due to its “memory value.
FIRST, THE BASICS
The key to planning a good incentive—and the biggest challenge—is making sure what the organization’s objectives are and building around them,” says Carlson’s Paben. “If you don’t do this, everything else doesn’t matter. It might not be your job, but you need to understand why they are doing this, what are they trying to accomplish. You’ll do a lot better in the planning.”
A second, equally critical element follows the standard meeting professional mantra: Know your group. What is their complexion—their ages, their interests, their expectations? Survey the group ahead of time—you may be surprised at the results.
For instance, one size doesn’t fit all. Boomers like to do things that are out of the ordinary, Wheeler says. “They might like to do something like highwire [zipline] in the jungle—not dangerous, but something on the edge.” They’re also into health and fitness, so spas, yoga instruction and nutrition programs are also welcomed.
But, workforce demographics are changing, and younger participants may have other interests and needs. GenY (the Echo Boomers—see November’s Smart Meetings for the low-down) are very child-centric. If they’re taking their spouse along for the week, who’s at home taking care of the kids? Should you consider kid-friendly incentives?
GenY’s are also a much more active group of people who are interested in authentically experiencing the culture and activities of a destination, says Paben. They like the traditional activities, like golf, spa treatments and horseback riding, but also active pursuits, especially healthy ones like hiking. They’re interested in the local culture, learning how to cook the cuisine...“We see a huge increase in the whole concept of volunteerism—not taking away, but giving back,” Paben says.
And speaking of significant others—does your group prefer face time with top execs, to become known to them, or to learn more about top-management plans for the future? Do they relish an awards ceremony with public recognition of their accomplishments? Do they want to spend time with other top-producing peers and colleagues?
Or, do they want some face time alone with their spouse at a wonderful destination to share the reward they’ve won—after all, their partners or friends may have been instrumental in supporting the efforts that earned the perk.
As for golf, that is always a plus for serious players, but a round of golf—even at a brand-name course—does not, in itself, make a trip an incentive. And there are plenty of nongolfers, or poor golfers, who would prefer a day spent relaxing at a white-sand beach or riding Class IV rapids instead.
THE INCENTIVE CHALLENGE
Every meeting has its inherent logistical (and other) challenges, but none more so than incentives. After all, the expectations are truly high: for planners, it’s the classic Emeril maxim of cranking it up another notch. The travel, the accommodations, the meals, the entertainment, the experiences—all have to be exceptional.
But there are other challenges as well, especially for companies dealing with public perception issues, stockholder oversight or Internal Revenue Service regulations, which can severely impact the time and money to be spent.
One of the most difficult challenges many planners face is to create the right balance between work and play. “Every client is different,” says Summit’s Wheeler. But you look at, what is the intent of the event, how much free time do you want them to have, how much free time do you want them to spend together as a group, for team-building and morale purposes, he says.
As more companies are combining meetings and incentives (what Carlson’s Paben calls meet-centives), they are striving for that balance. “They’re trying to make sure even if it’s an incentive reward and recognition program—an opportunity to have the top performers together—that meetings are brought into it,” he says.
Bringing those stellar performers together presents another sort of challenge. “You have to sit down as a company and decide how long you can take top producers out of the office,” Wheeler says. Summit and incentive houses like Carlson regularly work with planners around company deadlines, such as month end or quarter end, as well as trip length—which, according to industry research, averages five days.
Which brings up another point. “Connec-tivity is important,” he says. “As much as you want to go away and relax, you want to be able to use your computers and cell phones.” Most resorts are pretty good about this, he adds, although the more out-of-the-way properties may have spotty—or no—reception at all.
We’re all working with changing budget situations today—the “do more with less” trend—and incentives are no different. Aside from the money-saving aspects of combining them with meetings, there are other budgetary concerns. If you’re letting your attendees go off independently, say, instead of staying with the group, how will things be paid for? Do you give them $250 cash when they check in? A credit on the master account? What meals will be included? It’s harder to keep a handle (or a lid) on expenses, if that’s the case.
Finding space can be problematic as well. “Hotel space is at a premium,” Paben says, “and costs have gone up the last couple of years on the hotel and airlines side.” The challenge is, how do you make the same budget work with the same amount of people. The solution, he says, is better advance planning, particularly for large events—easier said than done, with the uncertainty about today’s economy.
“It’s an interesting time,” Wheeler says. “The economy has come back, the industry is strong right now, but with the mortgage crackdown and credit crackdown, they could have some effect. Most decisions are being made at the very last minute—but the further out, the better: there’s better availability for rooms and rates, and better availability for facilities.
BEEN THERE, DONE THAT
Like your favorite restaurant, too many return trips to the same resort or destination can get old. And when the experience goes stale, it loses its effectiveness. But, before the results show up on the bottom line—or in a spike in the attrition rate—it’s best to find out if your incentive program still has enough appeal to entice everyone to perform at their highest level. Are they still pumped about an out-of-the-way destination that may require a two-leg journey to reach? Have they already explored its every nook and cranny? Has it maxed out its cachet?
The solution is to ask them—preferably, right after they’ve returned from a trip. What did they like best? Least? Would they like to return? Where would they like to go next? Anecdotal results also work—and we’re sure you’ve heard a few “off the record” comments over the years!
MEASURING YOUR RESULTS
If there’s one thing our experts agree on, it’s the value of measuring the success of your incentive. Companies are trying to make sure that the money they’re spending is well spent. “Everybody is watching the bottom line,” says Vitagliano, of the International SITE Foundation.
And the smartest, most meaningful way to do that is from the get-go. While there’s no one way to measure ROI, according to IRF studies the most important thing is to “establish objectives that are highly focused so they can be measured in the first place. Thus, the more targeted the incentive travel program, the easier it will be to measure.” Tracking a sales incentive can be easy, says Vitagliano. “When the objective is to increase sales, you can measure that increase.”
That’s achieving a specific target goal. But there are other, more subjective or less tangible results that also can be measured if you set out the parameters ahead of time. Planners—and organizations—should keep in mind the “softer” objectives such as networking opportunities, morale boosting, identifying top performers, team building, fostering employee loyalty and reinforcing the company’s vision.
A good incentive program is win-win: Bolstering your employees’ performance and effectiveness also bolsters your organization in myriad ways. Provide the inspiration and encouragement, and the perspiration will flow freely.
