Eight years before SITE was founded, a Salem, Mass. maker of vacuum cleaners and floor polishers whisked 400 dealers to Rome...to do things, presumably, as the Romans do. One of the first-ever group incentives, this week-long trip (at a 1965 cost of $500 per person) featured all the revelry and ribaldry typical of the earliest incentive programs.
As Bob Guerriero, at that time the company's director of advertising and now president of Journeymasters, an incentive firm in Salem, Mass., recalls, they also staged one of the first-ever toga parties ever recorded in post-Caesar Roman history. The denouement, during the farewell banquet, featured the firm's executive vice president, carted in by "slaves" and saluted with raucous chants of "Hail Caesar" by the toga-clad dealers.
Incentives have come a long since 1965, when they were predominantly male-dominated dealer/distributor programs from the agri-business and automotive industries, replete with cocktail parties and long, long motorcoach excursions.
Experts cite the debut of the jumbo-jet in 1970 as the moment incentive travel began to soar. One thing is certain: The growing number of world travelers paralleled the increasing expectations of incentive participants. The '70s, '80s, and '90s also saw the proliferation of incentive staffs within every kind of hospitality supplier--hotel, cruise line, airline, convention and visitors bureau, destination management company--which led to SITE's massive growth (at last count more than 2,000 members worldwide).
Now, some 30 years after the first incentive qualifiers began getting their passports stamped, companies tie incentives directly into theirstrategies and expect a strong return on investment ( ) from these programs. On the incentive supplier side, this has led to a confluence of two opposing trends: one toward creativity and cooperation among suppliers, and another toward a competitive cost-slashing atmosphere.
Add Some Marketing to the Partying Just view the difference between the aforementioned Roman trip and a General Electric program 17 years later, in 1982, which reflected the need not merely to celebrate, but to meet specific objectives. When G.E. sold its Central Air Conditioning Division to Trane Air Conditioning that year, it held a dealer meeting in Switzerland to explain the move, review the products, and, most important, to assure Trane that dealer loyalty would remain strong.
Between meetings, a Mercedes-Benz car rally wove through the countryside between Geneva, Interlaken, and Zurich. Passengers received cassettes that provided some great driving music, but also summarized the content of the meetings.
Picture this: Two couples per car, interacting about the meeting, solidifying camaraderie, and agreeing that everything would work out fine. Imagine 1,600 dealers and spouses spending such quality time together over the course of eight back-to-back trips.
According to the planner, Jim McNabb, president of McNabb, Roick & Associates, New York and a 30-year veteran of the industry, dealer morale remained intact. "If 50 percent or more of the dealers had abandoned ship," he says, "then Trane's purchase would have been worthless."
Flash forward to the 1990s, and the focus is not only on the objectives, but the cost. A recent example: a building materials firm that combined a buying show with the first day of its annual customer incentive trip.
Says organizer Jim Dittman, president of DittmanMarketing, Edison, N.J. (whose incentive career began in 1964 when he served as assistant manager of advertising and promotion for Litton Industries), "The net result is that the manufacturers have the opportunity to sell a boatload of product, the customers no longer have to pay to attend (and to bring their spouses), and the clients have the opportunity to ensure themselves as a strong third leg of the whole process."
Creativity vs. Cost In the 25 years since SITE's birth, two important--and opposing--factors have surfaced: the increasing expectations of well-traveled incentive qualifiers, and the growing need for companies to provide a return on their investment in incentive trips. Says Guerriero, "Participants have grown more sophisticated over the years, but more companies are looking at buying incentive programs as if they're buying paper or corn flakes." In the early days of incentives, he says, "we were dealing with the cream of American corporations, and were working with marketing people with vision. They would never run a cheap trip."
He relays the story of a program he's planning right now. "I just got off the phone with a cruise line and they're selling both inside cabins and, for $50 more, outside ones." He muses, "So, they're telling me that they're a SITE member, and they're selling an incentive participant an inside cabin?"
"I really think the days of creativity at any cost has gone by the boards," notes Bob Vitagliano, SITE executive vice president/CEO, who had his first incentive travel experience as a product manager for SCM Corporation's Copier Division in the early 1970s. He remembers winning a New Orleans Super Bowl program in the early 1970s. "The Super Bowl can be quite a zoo," he says, "but we were taken to the dome hours before the game, had a special room with a phenomenal luncheon, and then a Dixieland jazz band marched us from the restaurant right to our seats. People were parting and getting out of our way and staring. Talk about feeling special."
Some say this cost-consciousness may have its roots in supplier soil. "Are end-users demanding lower costs, or is this a phenomenon driven by supplier competition?" asks J.J. Gubbins, vice president, Global Incentive Sales for Starwood Hotels and Resorts Worldwide Inc. Gubbins has spent 30 years on the hotel side, much of it serving the incentive industry. "The entrepreneurial spirit led to more organizations that could work on programs at lower margins. With so many competing for the business, companies found new ways to address clients--and one of those is price."
Vitagliano's Super Bowl party and Guerriero's toga extravaganza wouldn't have existed had this been the case 20 years ago. As Gubbins says, "For the quality that's demanded for an incentive program, price should not be a primary issue if a company wants to create something unbelievable for the winners."
"It was a different kettle of fish 30 years ago," confirms John Kiley, chairman of EGR International, New York, who founded his company in 1970. The old days saw incentive trips with travelers by the thousands, and that meant excellent bulk buys for charters, food, entertainment, and hotel rooms, plus "there was a certain amount of buy-in to the trips as well," he says.
Yet, Kiley maintains that the market for high-ticket creativity and imagination remains strong today, mainly because "some clients, because they have very sophisticated travelers, are willing to break a budget if you can come up with something that's super exciting. At the top of the market, there's still that flexibility."
The Next 25 Years What will propel the growth of incentive travel in the next 25 years? Industry observers believe that suppliers will have to provide companies with overall marketing solutions, not just trip planning, and the rewards themselves will have to include more individual travel elements.
DMCs will no longer be primarily tour and transportation companies, just as incentive houses will no longer just plan trips. Today, says Patti Roscoe, chairman of San Diegobased PRA Destination Management, true DMCs act as consultants to find out what companies are trying to achieve with the trip. "We understand business management and the marketing issues that clients deal with."
What will the program of the future be like? An example might be a 1996 "cyber-incentive" program (the first ever) created by X-ceed Motivation for MCI Telecommunications. The underlying objective was to build participants' product knowledge, and the program was marketed, promoted, and fulfilled completely on a proprietary Internet. It was promoted with CD-ROMs sent to every salesperson around the country.
Meanwhile, with the focus shifting from corporate camaraderie to immediate gratification, debit cards will continue to proliferate throughout the industry. Incentive travel will have to work with and complement other awards such as these to appeal to the new generation of qualifiers.
The use of individual awards, even within group travel programs, will continue to grow. As Dittman observes, "Traditional programs used to be wall-to-wall activities, starting with an opening-day reception for everyone, then full- and half-day excursions, then coming together for the last day as a group. One of the things that made group incentive travel so appealing to corporations was the opportunity to engrave its fingerprints on the whole program, so everything had to be aimed at connecting people with the corporate unit." But today, he asserts, "Participants want more free time with their spouses and significant others. So the focus has switched in many programs from the group to the friend."
Finally, the industry will continue to shift to accommodate changes in the American family. "[We used to do] promotional mailings from the wife of the vice president of sales directed to the wives [of the salespeople] at home, talking about the wonderful shopping opportunities on the trip," says Dittman. "Now, with two-thirds of the women in the country working, you can't assume they're sitting at home. You also can't assume the spouse is a woman."
Changes aside, incentive travel will continue to do what it does best. Dittman, recalling his President's Clubs trips in the 1970s, says, "The salespeople really loved working with each other and they respected each other. The sales trips gave them even more motivation to sell and to rebond every time into a rock-like force."
"The basis for incentive travel will always be in the marketing, not in the travel or merchandise award," adds Dittman. "That will continue to be the strength of the incentive industry."