Incentive travel also is one of the fastest growing segments within travel, offering some of the best opportunities for jobs. Yet incentive travel is one of the least known and understood segments probably because most of the major incentive companies do not consider themselves part of the travel industry at all. Rather, incentive travel is usually considered part of the larger, motivation field; travel is only a means toward an end, a small element in a much larger motivational program.
"I don't sell toasters. I don't sell travel," said an account executive for Carlson Marketing (formerly E.F. MacDonald), one of the giants in the field. "I sell ideas. We sit down with the vice president of sales and the marketing people. They tell us what their problem is increase their share of market, move some item before the new inventory comes. Then we sit down with our people and design the program."
Jobs in the incentive travel field can be found among incentive "houses," which handle all facets of motivational programs including travel; specialty incentive travel companies; destination management companies, which put together the travel program for an incentive company; travel agencies; and suppliers like air lines, hotels, and destination tourist offices. Jobs can even be found among major companies and associations that regularly mount incentive travel programs.
Travel is just one of the incentives and premiums compelling millions of people each year to exert themselves to hit some target, exceed some quota, meet some goal, or fulfill some specified requirement in order to win. Cash, television sets, video cassette recorders, automobiles, radios, computers, and cameras are only a few of the others in a long list of items.
But ever since the 1950s, when travel first began to be regularly used as an incentive, it has proved to be the "ultimate" motivator. More people will work harder and exert more effort to win an incentive trip than they will to win any of the cash or merchandise items. The reason is that travel plays on more of the psychological forces that go into motivation, such as status, peer recognition, dream fulfillment, and the desire/need to get away. Moreover, unlike a color television, which anyone can purchase (and probably already has) at an established price and have for years afterward, an incentive travel program, is an experience that cannot be bought at any price, cannot be stored on the shelf, but must be renewed each time.
The Special Difference
The incentive trip is different from the typical packaged tour. Indeed, though many travel agents are expanding into incentive travel as an extension of their corporate, groups, or conventions and meetings business, the trips are intrinsically different in their makeup and must be specially created.
"Incentive travel is a party, a celebration," declared John Kiley, president of EGR International, a New York based meetings and Incentives Company, and a former president of the Society of Incentive Travel Executives (SITE). 'It is about 'making it' in the business world. It is an extraordinary event. It shouldn't be predictable. It should be full of surprises. And the source should appear to be the sponsor company and not the travel coordinator."
For example, a $459,000 incentive travel program in Hawaii that Riley's company arranged for Avon (where spouses tend to be husbands) was capped by a luau at Sea Life Park. Just as the 500 people were gathering for the show, three men in hang gliders, specially painted with the company's logo, leaped off the cliffs and performed an aerial ballet.
Traveling Like Royalty
The other distinguishing aspect to incentive trips is that you are not dealing with travelers at all, but winners, each a VIP. The trip is always first class and sometimes ultra deluxe with a chauffeured Mercedes to drive couples around Switzerland for a day, for example. Generally, the incentive trip is structured so that the winner will not have to reach into his or her pocket at all, not for a tip, not for a taxi. Some programs even provide postcards and stamps.
Shaklee Corporation of San Francisco has one of the largest in house incentive travel departments in the country and has won awards for its creative programs. One program offered a top prize of a six day trip to Montreux, Switzerland, which was won by 310 people. Since Shaklee believes strongly that participants should not have to pay for anything, the company even provided some spending money. The winners also found little packages awaiting them in their hotel rooms, complete with gift cards thanking them for their hard work. Shaklee rented an entire train for an excursion to Zermatt, had it decorated, and arranged for a band to give the riders a send off. There was continental breakfast and entertainment aboard, and, on arrival at Zermatt, they were met by Saint Bernards with casks of Shaklee liquid protein around their necks.
For traditional incentive companies, travel is only an incidental in an overall marketing campaign that can last a year. The program starts and ends with marketing. It kicks off with that first encounter with the vice president of marketing when the incentive travel specialist says, 'You've got a problem, and I can solve it, and it won't cost you a dime." It ends with the sales results being tallied and the kickoff of the following year's campaign.
A Winning Situation
The beauty of incentives is that it is a "win win win" situation: The sponsoring company pays for the awards out of incremental revenues (money it would not have had were it not for the incentive campaign); the winners get a priceless trip, fantasy come true, for free, plus peer recognition; and the incentives company clears about 12 to 15 percent of the total bill.
For example, suppose that a company wants to increase its sales volume by 20 percent. The incentive planner would structure a program by first figuring the gross profit that the additional income would produce and then applying a percentage of this amount (12 percent is typical) as the budget for the incentive travel program. The budget for the program involves much more than the trip. It also includes the cost of promoting the contest, monitoring contestants' progress toward meeting the goal, and planning and operating the trip.
Incentives can be used to solve any number of marketing or operational problems, such as the following:
- Stimulate the sales force.
- Introduce new products or models.
- Boost sales volume.
- Extend the distribution area.
- Move slow items.
- Open new accounts.
- Sell special consumer promotions.
- Revive inactive accounts.
- Stimulate sales in a slow season.
- Push new uses or combinations of items.
- Offset competitive promotions.
- Aid in sales training.
- Gain higher visibility at the retail level.
- Back up special promotions the retail trade.
- Gain sales help from non selling employees.
- Cut employee turnover.
- Recruit.
- Extend a peak season.
- Clear inventory.
- Help collect past due accounts.
- Obtain competitive market information.
- Improve working habits.
- Reduce absenteeism.
Example: A modest sized small appliance manufacturer, GEE, has a thousand ice cream makers that must be sold by December in order to make room for new inventory. Solution: Rather than spending $100,000 on an ad campaign to inspire consumers to buy the product, the company decides to offer an incentive travel program to its 200 distributors. The retail price of the ice cream maker is $30, and GEE makes $2 on each item. The payback to GEE, then, is $200,000 if all 100,000 units sell. The contest is designed so that each of the 200 outlets has to sell 500 units. If this target is hit, then the manager of the outlet wins the trip. The incentive travel planner has a budget of $110,000: $1,000 to spend on each winning couple and $10,000 to spend on the promotional campaign. The $1,000 per couple includes the incentive company's commission of $125. The planner expects 100 to win the prize but will allow a buy in (whereby people who do not meet the quota are allowed to pay the difference, thus enabling the operator to fill the blocked space) for the unsold units, at $2 a unit. GEE sells off the units, makes $90,000 profit, and, in the bargain, boosts the support of its distributors.
In addition to solving specific marketing problems and building good will among the sales force, distributors, retailers, and the like, incentives also provide measurable results that an advertising campaign does not. Travel has advantages over other awards because it is a more powerful motivator, builds good will, and (unlike a toaster or a TV) provides a vehicle for bringing top producers together with corporate top brass. A trip can also be used for a sales meeting, educational program, or product introduction.
Most companies do not want their key producers to be away for very long; thus traveling time is a consideration. Also, the destination must be within the budget and have the necessary space. It must also be relatively safe and secure since incentive programs are usually decided upon two or more years in advance. The destination name must be very promotable, even if the participants do not know precisely where it is. Top incentives destinations are London, Paris, Hawaii, and Las Vegas, but incentives companies have also created programs to more far flung points such as Hong Kong, China, and the Soviet Union.
Incentives are a vital source of tourism for many destinations, and many tourist bureaus frequently become actively involved in helping incentive planners and decision makers to recognize the appeal of their locality and to make inspection tours. Australia, though a long distance away, is working hard to entice incentive movements, as is the Montreux, Switzerland, tourist board.
A Growth Industry
Incentive travel has burgeoned in recent years yet is still only a fraction of what is could potentially become. "Productivity is the name of the game today, and productivity and incentives fit together," declared one veteran incentives executive predicting continued growth in the industry. "We have historically been involved in white collar travel, and white collar is the growing portion of the workforce. At banks, fast food restaurants, and the like, we can help develop good work habits, apart from just boosting sales."
National Cash Register Company (NCR), Dayton, OH, was the first to use incentive travel when, in 1906, the company awarded 70 salespeople who qualified for its 100 Point Club diamond studded pins and a free trip to company headquarters. In 1911, winners received a trip to New York.
The first regular use of incentive travel began in the 1950s, with the advent of mass travel and the airplane. In one year, some 45 companies awarded top producers trips totaling $50 million. By 1990, businesses were spending $2.6 billion on incentive travel awards.
