The headlines were scathing: “AIG Fiddles While Wall Street Burns,” “AIG Execs Show Us How to Blow $500K.” The White House called it “despicable.” Obama demanded the execs behind the trip be fired. I mean, even the invoice for the meeting is posted online!
Yes, the timing of AIG's incentive trip to the St. Regis Monarch Beach in late September — just days after the government issued a $85 billion bailout to the giant insurer (and right before an additional $37.5 billion in taxpayer-funded loans was granted) — was horrendous. But what concerns me even more are the repercussions for the incentive industry.
I was talking to a former GM of another luxury resort in California, who had faced a similar situation years ago — a financially troubled company getting bad press for its incentive at his property. As a result, his business suffered horribly for months. When companies cancel programs, it trickles down to incentive houses, destination management companies, entertainers, speakers, caterers, florists — all small businesses trying to survive in this economy.
Once again, our industry has not succeeded in explaining the business value of meetings and incentives. AIG responded to the scrutiny by agreeing to immediately cancel “all junkets or perks which are not strictly justified by legitimate business needs” — including its annual sales conference! But sales meeting and incentive trips are not junkets. They have nothing in common with the golden parachutes the company doled out as it neared collapse. But unfortunately, the public has lumped all these things together — and our industry will pay. We've lost the perception wars.
As Sue Pelletier, editor of our sister magazine Association Meetings, recently said in a blog on the subject (blog.meetingsnet.com/face2face/): “There's a reason that sales incentives trips have been a staple in business for, well, just about forever.” Incentives work: for toddlers, for teenagers, and definitely in business. We all have done an excellent job of providing research to prove it, but not of disseminating those facts to a wider audience.
What we need is for the industry voices and associations and magazines to join forces and create a strong and unified public relations campaign to prove the strategic value of incentives to the business and general press. Unfortunately, our efforts up to this point just haven't gone far enough — and the past few weeks are proof.