Our readers' 1999 incentive programs often included goals besides sales, from creating a memorable family experience to motivating nonsales employees.
Ask Priscilla Hicks what motivates her dealers who qualify for the company's incentive program, and you can bet she won't mention the trip. "Our children's program is what makes them want to win," says the vice president and co-owner (with her husband, Ray) of The Blind Maker, an Austin, Texasbased blind fabrication company.
Hicks has managed the company's biennial incentive since its inception in 1981, when it was more of a partying event than a family one. She gradually began welcoming children to the program, and the trip took on a new face. In 1996, The Blind Maker offered its first full-blown family incentive, to a dude ranch in Texas. In 1998, a full 90 percent of the qualifiers brought their families to Hawaii.
The Blind Maker's program is designed for families, not just one that allows the kids to come along and be taken care of by the hotel's childcare program. In Hawaii, the children were divided into two age groups, each with a group leader Hicks brought from Austin (leaders' resumes were mailed to the qualifiers prior to the trip). Children had their own activities, such as hula-dancing lessons, that they then performed for the entire group. There were also family events such as trivia contests and team games, and kids were invited to the nightly theme parties.
The program, which just won a 1999 Crystal Award from the Society of Incentive & Travel Executives in the category "Creative Use of Incentive Travel to Solve a Marketing Problem," exemplifies the trend toward rewarding business people with what they value most: family time. According to the Travel Industry Association of America, the years between 1988 and 1998 saw a staggering 312 percent increase in the number of business trips that included children. In 1998, kids were included on 32 million trips, a 32 percent leap over 1997.
Since most group incentive trips still don't include children, Hicks says The Blind Maker program gives her company a competitive advantage. "Most of our dealers have family businesses," she notes. "Sometimes, this is the only family vacation they get. Our competitors don't do anything like it."
Travel Works Hicks was among the 210 readers who responded to our Annual Incentive Trends Survey, which was conducted this year completely by e-mail. Along with 71 percent of the respondents, she considers travel to be the most effective motivator, compared to cash and merchandise. Correspondingly, 60 percent of readers said they use travel incentives, 21 percent use merchandise, and 19 percent use cash.
Marsha Shanks, director of management services for CKE Restaurants Inc., Anaheim, Calif., echoes popular sentiment about the value of travel incentives: "My personal opinion is that travel is always a more memorable incentive than dollars," she says. "People will remember the time they went to Hawaii for a week. They won't remember what they spent their $1,000 bonus on."
These programs clearly are working, because readers have steadily been increasing their use. In 1997, 15 percent of survey respondents held more incentive programs than in the previous year; in 1998, 23 percent; in 1999, 26 percent. This year, a whopping 42 percent say they plan to hold more incentive programs in 2000. "There's no better way for a company to say thank you," says Lori Cahill, event marketing manager for Intermec, an Everett, Wash.based computer manufacturer.
Charles Orgelfinger, a director with Merck Credit Union in Rahway, N.J., began offering an incentive program six years ago. It grew to two programs in 1998, and to three in 1999. These are usually two-day pre- or post-trips tacked onto a meeting. "People come back refreshed, with new thought processes," says Orgel-finger. "It's a strategy that keeps us moving forward."
Even companies that have had to cut back on travel incentives during economic downturns, like Columbia National Inc., a residential mortgage company headquartered in Columbia, Md., recognize their effectiveness. "When the market is a little sluggish, we have to offer fewer trips," says Susan Roberts, Columbia's meeting and event manager, "but they have proven themselves too valuable over time to cut out altogether." In 1999, the company had four incentive trips, and it plans the same number for 2000. "It's hard to measure the results, but we believe that our incentives have helped us to reduce turnover," notes Roberts. "Some of our top producers have been with us for 10 to 15 years, which is very uncommon in the mortgage industry."
Not for Sales Only Right in line with the new face of incentives is the growth of group trips for nonsales employees: from 41 percent in 1997 to 46 percent in 1998 to 49 percent in 1999. Marsha Shanks manages a companywide annual incentive program for Carl's Jr. Restaurants for 84 general managers plus spouses. "We believe that people who work hard in the trenches need to be rewarded, and we've seen great results," she says. "The incentive trip is particularly meaningful in a business where people work around the clock, don't have time to plan vacations, and live from paycheck to paycheck."
Her parent company, CKE Restaurants Inc., also has a corporate recognition travel incentive program for employees who have been with the company for 25 years. Whether it's a top corporate exec or someone on the front lines, the employee gets a week in Hawaii for two.
This year's survey suggests another emerging trend: incentive programs that mix nonsales employees with salespeople. Lisa Jacques, incentive program manager for Honeywell Inc. in Minneapolis, has moved in that direction. "One thing that came out of our sales incentives is that the salespeople asked us to recognize the operations people, too," she says. "The nonsales component is made up of the engineers and technicians who install the systems that people sell. They all impact the customer." Next year, Honeywell's "Ambassadors Club" incentive will reward 3 percent of the sales force plus an equal number of operations people with a five-day trip to the Breakers in Palm Beach, Fla.
Columbia National has a similar policy for its annual "Chairman's Club" incentive: It includes the top 5 percent of producers, an equal number of administrative staff (nominated by their managers for outstanding performance), plus the top 5 percent of branch managers. "We always use the trips to help build a sense of teamwork among sales and nonsales employees," says Roberts. "People work together better when they know each other on a personal level."
Location, Location Although the number of respondents who took meetings outside the country dropped this year (from 70 to 55 percent), those who do use international destinations say they can't be beat for motivational value. For the past several years, Columbia National's Chairman's Club incentive has been held outside the United States: in London in 1997, in Paris in 1998, in Spain (Costa del Sol) in 1999. It will be held in Amsterdam this year.
"We want to treat people to something that they couldn't do on their own," says Roberts, "and the states just don't have the same 'wow' effect." Last year, a fleet of Mercedes took two couples each to a castle for the final dinner. The year before, dinner was held at the top of the Eiffel Tower. "Europe has worked extremely well for us, and I don't see this incentive program moving back to the U.S."
Of those who use international sites, Mexico was the most frequently used destination. Honeywell's Roberts chose the new Four Seasons Hotel in Punta Mita, Mexico, (outside Puerto Vallerta) for the company's top incentive trip in 2000, but she admits that "planning an international incentive is always more challenging, especially in a location we haven't used before. You need extra lead time. Plus, you don't want the winners to spend the first day of the trip with jet lag."
To help overcome these obstacles, Honeywell typically goes back to the same destination for at least one more year. "We make our mistakes the first year, and then we can rest on our laurels the second year," jokes Roberts.
Florida, Hawaii, and Las Vegas were the most popular domestic destinations used by respondents. Hawaii works so well for Carl's Jr. that in 1999, the company rewarded its top general managers with a four-day trip there for the fifth year in a row. "Different people qualify every year," says Shanks. "They come primarily from the Western states and are not widely traveled, and Hawaii is a magical place for them. We will be returning to Maui in 2000 because the program there was so successful last year."
The Blind Maker used Kauai for its last program and got such great feedback that Hicks is considering going back to The Big Island the next time. "Our competitors go out of the country," she says, "but I'm not comfortable doing that because our programs are so family-oriented. If there's an emergency, I need to know it can be taken care of fast."
As for cruise destinations, the Caribbean is a hands-down winner for the 46 percent of our readers who use cruises: More than 50 percent of them plan to send their achievers on Caribbean cruises in 2000 and beyond.
Meetings Included Contrary to public perception, our readers said their incentive trips aren't just about golf and sightseeing: 74 percent include meetings on the agenda. The Blind Maker has two mornings of optional new product meetings, but according to Hicks, "they are always filled because we make them fun and lively." She works with an improvisational comedy group to come up with a theme (for the last meeting it was an archaeologist looking for a lost princess), which is introduced in the company's promotions months before the program takes place. During the trip, a comedian opens each meeting with another chapter of the story. "People feel like they would miss out if they didn't attend."
According to Intermec's Cahill, meetings during 1999's annual "Achiever's Club" incentive were part of an overall strategy to help consolidate different corporate cultures. The company's 1999 incentive program took place after Intermec had acquired two additional companies (and grew to nearly a billion-dollar corporation). "Particularly in terms of marketing events, whenever there is a merger or acquisition, people can drag their heels and not integrate things," she says. "But when you manage an incentive event, you have to put the cultures together." She launched the program with a 90-minute teambuilding event and held the awards ceremony on the first night. She also developed a directory that included personal and professional profiles of the winners and distributed it during check-in. "It was a great networking tool," Cahill says, "and helped to create a more cohesive feeling after the mergers."
Fewer Solo Trips One surprising result of this year's survey was the drop in individual incentives, from 51 percent in 1998 to 37 percent in 1999. Most of our readers attribute this decline to the teambuilding benefits of group programs. "Individual incentives seem to be a trend, and we're talking about them," says Barbara Ferguson, director of events management for the Oppenheimer Companies Inc. in Boise, Idaho, a diverse corporation that includes food-service marketing and distribution. "But what works for us is to keep the group as a group. At least one-fourth of the attendees at any one time are interacting with each other during our incentive programs."
Similarly, Columbia National's incentive programs are designed to encourage attendees to interact with each other. "The biggest complaint I get is about how tightly structured our trips are in terms of group activities," says Roberts. "But we're not going to change the group nature of our program. The participants can go out a few days early or come back a few days late if they want more personal time."
Other Findings More highlights from this year's survey:
* The average amount that companies spent per person on their incentive trips in 1999 was $2,466, and nearly 15 percent of respondents spent more than $4,000 per person.
* Incentive travel budgets remained stable in 1999 for 49 percent of our respondents. 43 percent expect budget increases in 2000.
* Team incentives are on the rise: 24 percent of readers used them in 1997, 38 percent in 1998, and 42 percent in 1999.
* The length of incentive trips ticked up in 1999, to an average of 4.7 days. Seventy percent of respondents--vs. 40 percent in our last survey--held trips that averaged four days or more.
* Lead time: 55 percent of readers plan their programs less than a year out.
* In-house planning: 44 percent plan their own incentive trips, up from 40 percent in our last survey.