Why Incentive Travel is Important for Your Business
To start, let’s briefly discuss why the use of Incentive Travel has increased from 25% of US firms leveraging it as a motivational tool in 1996, to over 85% today.
Furthermore, according to the Incentive Research Foundation, a not-for-profit that conducts studies around the effectiveness of incentive travel and the financial outcomes produced: the median Presidents Club spend is $4,000 per person, with 40% of US firms spending upwards of $8,000, and Worldwide, 65% of firms are expanding their incentive travel programs.
Those are some big numbers.
You are probably also asking yourself, why are so many organizations choosing travel-based incentives and not cash? And secondly, why are they spending so much per person?
Because Incentive Travel produces a higher ROI than any other type of Incentive.
Top Companies Leverage Incentive Travel Planning to Increase Sales
In fact, the top 20% of companies in ANY vertical are TWICE as likely to use non-cash based incentives.
The reason why it’s so much more successful has to do with the psychological effect of receiving cash, versus receiving an experience, and their ability to tell others about their achievement:
People tend to classify cash into utilitarian accounts, using it for mundane and forgettable transactions like paying gas bills and making mortgage payments.
On the other hand, employees place experiential gifts into mental accounts designated for fun or luxury, which generates feelings, emotion and memories.
There remains a stigma attached to talking about cash but people love to talk about and share dining and travel experiences. Because employees remember, talk about and appreciate non-cash experiential rewards, they reciprocate with greater effort, collaboration, engagement, loyalty and performance. – IRF
Considerations for Incentive Travel
Now that we’ve covered the ‘Why’, let’s cover the basics of an incentive trip.
If you want to have a successful Presidents club, you should be starting the conversation well over a year out!
In our experience, our clients like to announce where their next destination will be at their annual sales kickoff.
You definitely do not want to announce one of your most expensive and exciting events of the year via email.
It’s best to make the announcement when you have everyone together.
Perhaps at your Sales Kick-off, collaborating, training, learning what their quotas are, and what new methods, products, and services are going to be in place to make them successful for their upcoming year.
It’s about Gratitude
The entire purpose of an Incentive Trip is to pay gratitude to the Sales staff who have gone above and beyond in bringing in additional revenue for your company — Usually surpassing their quota by 10-20%.
As such, the quality of destination, hotel, activities, and gifts are important elements.
It’s your chance to show off how much their work means to you, and their significant other, while at the same time inspiring the sales staff that didn’t achieve to ramp it up.
A fantastic trip will have their significant other continually talking about how wonderful your company is to their top performer, their friends and family – Further reinforcing loyalty to your organization.
Additionally, if the top performer doesn’t have great pictures, experiences, and enthusiasm upon returning to the office, not only will they be less enthused about going back next year, but what’s to motivate the rest of the Sales staff to sell more?
Sign the Hotel Contract First
We’ve seen it before, and to be frank, it doesn’t look good when you announce a hotel destination when the contract isn’t fully executed.
The time of the year you want to go is very competitive – And companies get squeezed out during negotiations all of the time because they took too long.
You might not realize that an extraordinary number of companies have their eyes on a handful of hotels at a particular destination, and because of the holidays, there are more limited weeks/weekends available than previously thought.
Even if you are in talks with the hotel Sales Manager until you have an executed contract, you don’t have anything.
So for poise, credibility, and overall heart health, get the contract signed before you announce.
This goes back to point 1, plan early.
Include the Bells and Whistles
This event should be well thought out. Don’t just pay for the hotel and airfare for your top performers and their +1.
Consider the fine-dining venues, the activities available, trip inspired gifts/swag, and more.
Your guests need to be taken care of from beginning to end.
Include Limited Work Functions
If you’re the Business, you want to include as much collaboration and group-time as possible. But if you are the employee, you probably want the opposite.
Find that sweet spot for the sake of the employee’s sanity.
It’s ‘ok’ to have a group activity, and separate group dinner, on top of planning work Ceremonies (Awards, Closing, etc.), but keep in mind, this is essentially their trip – They’ve earned it.
So, limit the number of forced work-interactions they’ll have, while also not letting them wander too far!
On-Site Staff is Essential
One of the last big points I’ll make is to have designated staff on-site at the hotel, the dinners, the ceremonies, and more.
You must ensure that when a guest has a question someone knowledgeable about the hotel, the available activities, dining options, where your executives are, flight plans, and more is available at any time.
Trust us, it doesn’t matter how good your FAQ page on the Registration site is, your guests will have questions throughout the day, every day, and the hotel staff isn’t equipped to handle your trip-specific details.
In essence, this staff will be the designated Presidents Club concierges, usually at the hospitality desk throughout the day.
Remember, the key to a successful incentive trip is to plan, negotiate and sign contracts early.
This will provide a clear outline for you to follow as you plan the rest of your event, but also prevent any embarrassing hiccups for your and your business.
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Jeremy Sweat is the Sales and Marketing Director at J.Shay Event Solutions. When he’s not working, he enjoys traveling with his wife, scuba diving, and triathlon training.