Strong and steady--those two words best sum up our readers' use of incentives in 1997 and their plans for the coming year. A vast majority of respondents (73%) said they held the same number of incentive trips in 1997 as in 1996, and the exact same percentage said their use of incentive travel will be the same in 1998 as it was in 1997.
Though last year's survey revealed that nearly one quarter of readers had planned to increase their use of incentives in 1997, only 13 percent responding to this year's survey actually had. And while more than one-third of last year's respondents had said their 1997 incentive budgets would grow, just a little more than one-quarter (27%) of the respondents to this year's survey said they had spent more in 1997 than in 1996.
Incentive budgets appear to be in a holding pattern. A full 60 percent of readers said they spent the same amount on incentives in 1997 as they did in 1996, and 61 percent said their budgets will remain the same in 1998. Most respondents plan either one incentive trip (38%) or two (25%) each year and spend an average of $2,716 per person.
Jackie Harper, manager of administrative operations at RadioShack, Fort Worth, TX, fits that profile. She plans one major group program a year for the store owners in her division, their top salespeople, and several members of the support staff (accounts receivable employees), with a per-person budget of $2,700. The company has had the same program in place for 30 years. "This program drives a great deal of business for us at a critical time of year," she says. "We don't want to mess with the formula, but once in a while we shake things up."
The greatest change she's made recently is in her destination choices. "We're getting a little more adventurous. Our group is more mature, both in age and travel experience, so we're not doing destinations we used to, like the Caribbean." Recent sites have included Australia, an Alaskan cruise, and Rome.
Harper will see an increase in her 1998 incentive budget in conjunction with a growth plan across the company, which opened 200 new stores in 1997 and plans to open 250 in 1998.
Who are the respondents to our survey? Like Harper, the respondents to our survey were either general managers or mangers in corporate sales and marketing divisions (26 percent) or company presidents or vice presidents (56 percent). In addition to retailers including RadioShack and Caldor, companies responding to the survey spanned many industries: automobile manufacturers such as Ford Motor Company, high-tech companies including NEC and Novell, banks and investment firms, a television network.
The vast majority of respondents were from manufacturing companies--people like Bill Kushner, plant operations manager at Techni-Tool, Plymouth Meeting, PA. Kushner is a firm believer in incentives as "a tool to improve productivity and quality," and plans to increase his use of incentives for the company's suppliers, sales force, and nonsales employees (telemarketers, purchasers, warehouse staff) in 1998. "We've recognized after gathering base data that if we can save money and improve quality through these programs, we can give some of that savings back to the employees."
Who do these companies target with their incentive programs? Primarily their internal sales forces (62 percent), followed by dealers (28 percent), and distributors (22 percent). A significant number of respondents as well (41 percent) used travel incentives for their nonsales employees in the past year. Even more (51 percent) said they plan to do so in the future.
Techni-Tool holds several programs a year, ranging from a suggestion program with merchandise awards and trips "for the cream of the crop," to a recent program that awarded suppliers weekend stays at the Marriott of their choice anywhere in the country, to a new team incentive for telemarketers held in conjunction with the company's introduction of an 800 number.
Jack Rosenthal, national merchandise administrator at Leath Furniture, Atlanta, began a program four years ago for the managers, salespeople, and nonsales employees at the chain's retail stores. The awards vary for each category of employee: Managers win a group trip for themselves and their spouses (recent destinations have included Hawaii and Puerto Vallarta); salespeople also win travel; and nonsales employees win bonuses. The way the contest is structured, entire stores either win or lose, which, says Rosenthal, has been great for morale. "Everyone is working together to win: the front office people, the warehouse people, the salespeople."
Rosenthal plans to use more team incentives in the future. "I've been seeing and reading more about it lately. Seeing what we did by accident and how well it has worked, I think we need to do it more."
Leath Furniture isn't alone in motivating teams. We decided this year to add a question to our survey this year about team incentives, and found that one-quarter of respondents have used them in the past year and 34 percent plan to do so in the future.
Trip trends Which incentive destinations are the most popular among our readers? Domestically, the most-named destinations were Hawaii, Florida, Las Vegas, Phoenix, and San Francisco (the only new entry to this year's top five). Other popular sites included: New Orleans, Palm Springs, Boston, New York City, and Lake Tahoe.
For Jim Philp, operations manager at H.M. Royal of California, Buena Vista, CA, the sales force has a big influence over site decisions. The chemical industry sales and warehouse company surveys its salespeople about which destinations they'd prefer to use and "we try as much as we can to listen and let them drive the decisions," he says. The company uses a combination of individual and group trips, both international (the top performer just spent ten days in Japan) and domestic (the November meeting site, Hilton Head, was a suggestion from salespeople). "I'm a firm believer in not forcing things on people," says Philp, "and because of the size of this group (65 sales reps in two locations), I don't have to."
A full 60 percent of readers say they use international destinations as well. Among the most-mentioned destinations: Mexico, Bermuda, a Caribbean cruise (which also got a few mentions in the domestic category), Canada, London, Italy, Australia, France, Hong Kong, and the Bahamas. Destinations readers have used in the past three years criss-cross the globe, from Nevis to New Zealand, St. Bart's to a Baltic cruise. Among the more exotic choices: the Galapagos Islands and Fiji.
We also asked readers if they have used a cruise for an incentive in the past five years, and 39 percent said they had. Forty percent said they planned to in the future, and 30 percent said they weren't sure.
Our findings support a widespread trend toward increasing use of individual trips as incentive rewards. Significantly more readers than last year (73 percent vs. 57 percent) said they have used individual travel incentives in the past year, and about the same number (71 percent) said they plan to in the future.
"It's getting more and more difficult to get people in the same place at the same time," was how Carl Yanchar, president of Wave:Space, Inc., Foothill Ranch, CA, put it. One solution for him has been to plan the company's programs around trade shows. Wave:Space, which provides de-sign services and equipment for production facilities, is one of the majority of companies whose use of incentives has been in a holding pattern, but Yanchar sees this improving in 1998 as more TV stations are outfitted for digital equipment.
Across the board, readers agreed that travel was the most effective motivator. A common observation: Cash gets spent immediately to pay bills, while travel creates memories and builds morale.
As Rosenthal put it, "A trip is also something to look forward to. The retail environment is intense. Good store managers and salespeople will work whatever hours it takes, and in turn, they have little time for leisure. Travel is a way to break away from the hectic day-to-day."
Who's doing all the hands-on planning of corporate incentive trips? Our readers were mixed in their responses, from senior executives like Rosenthal, who said he was "up to his hips" in planning for the company's upcoming trip, to an increasing number of readers (26 percent this year vs. only two percent last year) who say they rely on travel agents. About the same number as last year (36 percent vs. 32 percent) have an in-house meeting planning department to handle all the details.