Chubb Sets the Stage for the Incentive of a Lifetime Maintaining a reputation for outstanding overseas incentive programs takes international savvy andthe courage to be different.

Then Ernie Tsouros, FLMI, CMP stood on the stage at the Budapest State Opera House last June, amid tables of Chubb Life agents and home office executives rising to their feet to cheer him, he got choked up. The evening was, he says simply, "the highlight of my career."

That's saying something. Tsouros, Chubb's vice president, corporate meetings and travel, has been involved with Chubb incentive meetings for 39 years. He's hit the romantic, cultural, and adventurous capitals of the world, and done it by land, air, and sea.

So why was this particular final-night banquet so moving? It was certainly a combination of factors. First, the grandeur and uniqueness of the setting was a complete surprise to the qualifiers. Second, Hungary's remarkable recent history made it all the more incredible that this group of North Americans--and their Hungarian destination management company contacts--would be dining and dancing on a stage that for so long had stood before only the Communist elite. Third, it represented the culmination of a daring destination choice on the part of Chubb. Finally, Tsouros may have received the accolades of attendees with thoughts of his upcoming retirement (only partial, of course) from a job that has been gratifying and challenging him for almost four decades.

Here's the scene: Chubb's 150 attendees, dressed for cocktails, enjoy a reception in the grand foyer of the Budapest State Opera House. After half an hour, they are led inside to the ornate, gold and crimson hall. They take their seats, to be entertained by opera singers, a string quartet, a children's ballet performance. Then a man appears on stage to announce that dinner is served.

There is a murmur among the assembled guests. Dinner? Where? They haven't been told. As they rise, presuming they are to board coaches to another venue, a curtain opens on stage. There, rounds of eight are elegantly set, candelabra blazing.

Make it Different This is the kind of experience The Summit Club attendees have come to expect from Chubb's programs. So how does Tsouros outdo himself every year? First of all, he doesn't think of it that way. "It's a mistake to think, 'How do I top the previous program?'" he says. "Rather, you should make the next program so different that you can't compare the two."

So let's consider this nine-day Montreux/Orient Express/Budapest itinerary, pulled off last June with special touches to satisfy the most well-traveled agent. Most of the qualifiers arrived at the airport in Geneva on a Tuesday morning. They were transported to the Montreux Palace Hotel, where they could count on their lakeview rooms being ready immediately. That's because Tsouros, who paid a premium to make sure each room faced Lake Geneva, also booked every room for the night before the guests' arrival.

"That's going the extra mile," he says. "It's the little things that make the difference between a great program and a regular program." More "little" things: When Chubb qualifiers get to their rooms, a Continental breakfast is waiting for them. And anyone who arrives a few days early for the program still gets airport transportation arranged and paid for by Chubb; likewise for anyone extending a trip by a few days.

These touches take money, but there are subtler ways Tsouros accommodates his qualifiers--ideas that come from years of international experience rather than from a bigger budget. "The first event is a reception followed by a buffet," he says. "We usually do a buffet because we don't want to overdo things the first night. Also, I resist taking people outside the hotel. They don't need additional logistics on the day of arrival."

When the group did start sightseeing, on the morning of the first full day of the trip, Tsouros had booked enough air-conditioned buses so that each was only about two-thirds full. "Usually you end up with one that's the smoking coach," he notes.

So, after Wednesday's tour of the Swiss countryside, including lunch and wine-tasting at a vineyard, attendees were back at the hotel with enough time to freshen up for an evening dinner cruise on Lake Geneva. The entertainment was a New Orleans jazz band, the atmosphere was casual, and the weather cooperated beautifully. "I would take the risk," Tsouros says. "We could have closed up the boat if it was pouring."

The next day was the highlight of the Swiss leg of the journey, according to Tsouros. Attendee foursomes climbed into brand new Hyundai rental cars for a morning road rally. After stops at cheese factories and souvenir shops, the group met at a farm for a midday barbecue. "I hadn't done a road rally in five or six years," Tsouros explains. "People loved it. We let them match up who they wanted to go with, but I assigned the home-office staff to certain cars. You don't just put the president anywhere."

The point is an important one, for while Tsouros is keen to impress everyone with the destination, he is ever-

conscious of the critical business role incentive meetings play. "The emphasis is on entertainment, but we're marketing, too. We want to capitalize on the opportunities we have--for example, to put the president with the top agent and let them get to know each other. "I don't schedule any formal meetings, but to say there is no business conducted is misleading."

Making History The second Swiss evening, a dine-around, again tactfully balanced attendees' own desires with Chubb's marketing goals. "We pre-selected seven or eight restaurants and permitted [attendees] to order off the menu. Then it was all billed to us. We had eight home-office staff and we put them with different qualifiers than they'd been with before," he says. "And there were a few couples who just wanted to be by themselves, and that's fine."

The next day attendees chose one of two tours or took the day at leisure. That night, a plated dinner in the 12th-century Castle of Oron finished up the Swiss portion of the trip.

On Saturday, Tsouros and John Wolf, Chubb's corporate meetings and travel officer, found themselves in the midst of a meeting planner's nightmare. While excitement continued to build among the qualifiers for their evening journey on the fabled Orient Express--Chubb had chartered the entire train--Tsouros and Wolf got word that the train was hung up on its way from Venice, encountering wild thunderstorms. "We were supposed to board at four in the afternoon," Tsouros says. "We discussed our alternatives. If it didn't arrive that day, it would arrive the next day. So we immediately went to get accommodations for that night. It was the high season in Montreux, but we came up with rooms for everyone. I was sweating it out." By midday, it seemed that the train would be late, but it would arrive, so Tsouros never told the attendees. Instead, they stretched out the drive to the station and, in fact, the train made up some time on the way.

Soon the relief Tsouros and Wolf felt was supplanted by surprise that the overnight journey was going to be even more special than they had planned. Apparently, the Orient Express hadn't been to Budapest for five years. "We turned out to be a media event," Tsouros says. "People came out and were taking pictures. When we arrived in Budapest, there was a huge crowd waiting for us, cheering. [The qualifiers] were blown away."

In Budapest, the group freshened up in their rooms at the five-star Kempinski Grand Hotel before choosing one of three afternoon tours. That evening, a welcome reception in the city's Museum of Fine Arts was followed by dinner in the world famous Gundel's Restaurant.

The following day attendees got a tour of the city--and were quite a sight themselves, as it turned out. "Budapest is such a new destination for incentives that [tour-ism officials] actually had camera crews filming us. Now they're using [that foot-age] for promotions," Tsouros says. "Chubb was among the first U.S. insurance companies to do Budapest. For all of our qualifiers, this was a new experience. And that's getting harder and harder to do."

That evening, a Budapest dine-around offered more marketing opportunities for the home-office staff. Says John Wolf, "With this size group, there is great opportunity for relationship building. Everybody had the chance to sit with the president or the chairman."

The final full day in Budapest was taken up with a Hungarian cowboy and horse show, followed by lunch with a Hungarian wedding theme, and an afternoon set aside for shopping. Then, the final night at the opera house served as the stunning finale to the nine-day program.

"The only way to justify these programs is that they help you win out there in the marketplace," Tsouros says. "We know for a fact that we have people qualifying who represent other companies. And it's not just because of the incentive trip, but that's part of the mix. You build up such great credibility.

"If I get a person on one trip, I've got him."

Motivate the Middle George Perkins is convinced that the insurance industry's incentive vehicle needs fixing, and for the past couple of years, he's been tinkering under the hood.

The problem, says Perkins, CEO of Financial Marketing Systems (FMS), Inc., is that incentive travel programs are geared only toward the elite achievers. "As important as national incentive conventions are--and they are critical for your big producers--they have no bearing on 90 percent of your agents," Perkins says. "If you can do anything to motivate that middle group of agents, production is going to be very positively affected."

With 51 years in the insurance industry and countless incentive programs under his belt, Perkins is trying a new motivation tactic: short-term individual incentives. "My assumption is that 25 percent of our agents could earn a short-term individual incentive," he says. "Now, just three percent make the national conventions."

FMS fills a particular niche in the insurance world. While it does design and sell some insurance products of its own, its primary business is to hire, train, and motivate independent agents to sell the insurance products of other companies. It currently has marketing agreements with Interstate Assurance Company, Commercial Union Life Insurance, American National Life Insurance Company, Security Life of Denver, Old Line Life Insurance Company of America, and, most recently, AFLAC.

Based in Nashua, NH, FMS delivers 500 independent agents from New England, 200 from Maryland, as well as some from California and Detroit. FMS-aligned agents are eligible for the incentive conventions run by the FMS client companies as well as those run by FMS. Typically, FMS trips dovetail with the client-company incentive, allowing top producers the chance to add three or four days onto an existing trip. And while Perkins will continue to offer these trips, he's working on a more inclusive way to motivate the field.

"I'm convinced that we're going to get more mileage--more financial returns--out of short-term programs that allow us to be flexible about how we reward people, but it's going to take some serious doing to make it work."

In fact, Perkins has already gotten a taste of how much work it's going to take. His first try at short-term, individual incentives in 1996 was not a big success. When one of the his client companies rolled out a new universal life product, he launched a five-month incentive program to generate excitement around the new policy option. Agents who met the goals could choose among three-day expense paid trips at three different resorts: La Quinta (CA) Resort and Club; Marriott's Desert Springs Resort and Spa in Palm Desert, CA; and Hyatt Regency Grand Cypress, Orlando, FL.

Without sharing exact figures, Per-kins is clear that the results were disappointing. The number of qualifiers was lower than expected, and one resort, Marriott Desert Springs, didn't get a single taker. He's undeterred, however, and is expanding on the idea, with a number of major changes based on lessons learned from his initial try.

First, he's rethinking the grounds for the program. "I think the product affected the number of people who went on the trip. You need something really worthwhile to sell that has some sex appeal. There has got to be a reason for the incentive." For 1997, Perkins has identified a pension product and an index annuity so far that, he believes, have enough pizzazz to carry a short-term incentive program. Despite minimal success with his 1996 test, FMS may hold three short-term incentive programs this year. And all are likely to be more compact than his first try. Based on feedback from the 1996 program, Perkins now believes three-month--or even shorter--qualification periods will be more effective.

But the biggest change in the 1997 programs will be the breadth of the reward options. For the first time, FMS is working with an incentive house to allow winners to choose from among 40 different short trips. "Our locations weren't the problem last year," Perkins says. "We offered choices, but only limited choices." All the 1996 reward sites were golf-oriented and while golf is the number-one interest of FMS agents, the uniformity worked against the company. "You have to do a lot of research about how [your agents'] minds work," Perkins says.

His incentive options now prominently feature skiing and fishing destinations along with the traditional golf and beach resorts. With flexibility and customization as the watchwords, he also hopes to add events like Mardi Gras, sports play-offs (like the World Series), and other special interest activities to the list to capture the attention of a broad agent audience.

It'll be months before Perkins knows if his tinkering has worked. It's a delicate job to balance a reasonable qualification level, a high-interest product, and a travel reward in a way that drives agents to perform. But he's optimistic that he's now got a formula that will shift his sales machine into high gear.

Hancock Creates an Olympic Tradition Tradition and history are important elements in the John Hancock Mutual Life Insurance Company marketing mix. Consider the company's logo--a signature of such historical significance that you're as likely to be asked to "put your John Hancock" on a document as to "sign" it.

So Hancock's sponsorship of the Olympic Games, an event that has defined athletic competition since ancient times, is a nice fit. And organizing the insurer's most important agent business meetings around that spectacle is one way the company maximizes that connection.

"People identify with the Olympics as a wholesome, patriotic aspect of American life," says Fred McManus, Jr., Hancock's general director, conferences, travel and visual communications. "People have a good feeling about doing business with Olympic sponsors. They are very elite companies."

Simply put, says Whit Coffin, director of the meeting management division at Hancock, "Attending the Olympic Games is the experience of a lifetime." The first time Hancock offered an Olympic incentive, to Lillehammer, Norway in 1994, the company saw an impressive 40 percent increase in qualifiers. Next year's winter games in Nagano, Japan, are expected to cause a similar spike in attendance. And as for the Summer Games in Australia in 2000, McManus says, "I dare say we'll set records. We expect a huge response."

The relevant point: It's not just the Olympics, but the Olympic sites that draw qualifiers. Last year, even the expected heat of an Atlanta summer excited qualifiers at Hancock's two, back-to-back agent business meetings: the President's Cabinet, with its 250 attendees and the M Group Conference, with 120 attendees. Each meeting ran similar four-night itineraries, with the arrival of the President's Cabinet timed for the opening ceremonies.

Each day of the President's Cabinet meeting began with an early morning workshop on a topic such as effective sales closings or what's new in the long-term care market, followed by a business meeting/award presentation or another workshop. Attendees also took in several Olympic competitions during the conference and enjoyed evening theme events in the Hyatt Regency Atlanta Centennial Ballroom, with its decor evocative of ancient Greece (the standing set was used throughout Hancock's back-to-back meetings), and at Atlanta hot spots such as Planet Hollywood.

Herculean Planning While planning an agent meeting around the Olympic Games creates a special atmosphere for attendees, it also creates special headaches for the meeting management staff. Take Deborah Costa, conference manager, who had responsibility for transportation. "I had done tremendous advance planning," says Costa, who oversaw the 13 buses, three minibuses, 12 vans, and six cars transporting Hancock personnel around the city, "but there were a lot of changes that were beyond my control. We had to do a lot of on-the-spot maneuvering, adapting quickly and often." Those changes included everything from unexpected road closings to uninformed parking lot attendants.

But the Hancock meeting management staff gives the city of Atlanta credit. "Every Olympics is new," McManus says, "It's a learning experience for every city that hosts the Games." With the Olympic city just a two-hour flight from Hancock's Boston headquarters, the whole planning ordeal was made somewhat easier. "Six months prior to the games, we opened an Atlanta office staffed by a member of our department, Hilda Ramirez," explains John Touchette, director, project administration, conferences and travel. "And our home-office planning staff would go down there once a month."

Touchette had the delicate task of obtaining and allocating tickets to the Olympic events--a process that began an incredible two years before the opening ceremonies. "We're not guaranteed specific events, but as a sponsor we are entitled to purchase a variety of tickets," he says. "We sent a survey to our attendees, asking them to rank the top 15 sports they wanted to see, and we tried to match them up as much as possible."

To try to further accommodate someone who, for example, just did not want water polo tickets, Hancock set up a trading desk at the Hyatt. In addition, Touchette explains, the Atlanta Committee for the Olympic Games (ACOG) was the first organizer to allow companies to return their tickets and try to trade for something else. And the ten to 15 other corporate sponsors traveling in the same circles created even more, informal, ticket trading opportunities.

All in all, ticket duty was labor-intensive, and is a good example of how Hancock's volunteer program worked. Hancock trained employees to work as volunteers during the agent meetings at the Olympic Games. The 50 who went to Atlanta greeted qualifiers at the airport, accompanied sightseeing tours, acted as hosts at meals, and, Touchette notes, dealt with tickets. "We had two dedicated people working long hours just sorting and allocating tickets," he says. "It's a great experience, having employees interact with the field. And it's great for us, because we couldn't possibly be with all the guests all the time."

Hancock included other special touches to keep attendees comfortable at the Games. One highlight, a carryover from Lillehammer, was the Hancock Pub. The meeting management team negotiated with the Hyatt for a dedicated restaurant that would be staffed and available to Hancock attendees 24 hours a day. As in Norway (and next year in Japan), the space was dubbed the Hancock Pub. Attendees relied on it for individual business conferences or to take a break or to drink a final toast at the end of an evening.

Meanwhile, the official sponsors' hospitality tents provided a relaxed, air-conditioned gathering place for Hancock attendees and attendees of meetings held by the other corporate sponsors, all of whom could mingle in a central area onto which the individual tent sections opened. The one threat to that venue came when a bomb blew up in Centennial Park during the President's Cabinet conference. "The sponsors' hospitality tent area and Centennial Park were declared a crime scene," Whit Coffin explains. "It happened early Friday morning, and we didn't get back in there until Tuesday."

Costa says the bomb incident did scare off a few attendees, but McManus emphasizes that the company and the rest of the tourists and Olympic-goers put their faith in the Atlanta security forces "to keep us informed and safe."

Despite that tragic incident, Hancock's 1996 Olympic programs exceeded its goals. "The company takes great pride in its Olympic sponsorship and in its association with the International Olympic Committee. I'm hopeful that it will continue," McManus says. "Our sponsorship allows us to use the Olympic rings in conjunction with our logo, providing us an edge over our competitors, since no other life insurance company has this relationship. And the company is making a genuine contribution to the development of the Olympic movement by supporting the youth of our country and our Olympic athletes."

Getting More by Requiring Less ow can I top myself next year? That's the refrain of incentive planners in a game of one-upmanship that's played out in insurance company marketing departments around the country. Judged against internal standards as well as those set by competitors, executives often feel the weight of history as they plan upcoming rewards. Every year needs to be a bit more spectacular: A five-star resort instead of a four-star, a six-day trip instead of a five-day, Sydney instead of Scottsdale--it's hard to step off that upward spiral of increased expectations.

But that's exactly what Interstate Assurance Company in Des Moines, IA, has done, and Rod Foster, senior vice president and chief marketing officer, is happy to tell you why. "We want to get back to offering trips that are a true incentive," he says. "We were leaving our producers behind. Our product has a middle-America audience, and we're looking for the middle-America agent."

In what many might call a radical marketing move, Interstate has switched the focus of its incentive program from elite agents to lower producers who are at the core of its sales efforts. This year for the first time, Interstate has rolled back its qualification levels, shortened its qualification period, and changed the style of the trip to draw more agents into the winner's circle. Instead of about 125 qualifiers, Interstate expects at least 250 when it convenes for a five-day program at the Rim Rock Resort in Banff, Alberta in May 1998.

Adjusting Downward Interstate's last incentive program, in 1996, was every bit a luxury. It began with four days in Montreal for the top 125 producers, then those who also qualified for the second tier (46 agents) flew on to London for five days. The top ten producers went on from there to Paris for three more days. A wonderful trip, to be sure, but a tough reward to reap. Fewer than one percent of Interstate's contracted agents reached the production requirement for the lowest tier: $75,000 in net annualized premium over a two-year contest period in a minimum of 20 new applications. And those who went to London, needed double those premium dollars.

Looking ahead, Interstate executives calculated that to keep up the pace of their ever-more spectacular rewards, a two-year qualification level with production requirements of about $55,000 per year would be necessary for the low-tier of the next program. That's when they put on the brakes. "By setting our qualification levels so high," Foster says, "we were totally missing our target agent." Qualification levels had gotten to the point where the trip was a reward, but not a motivator, he says. High-end producers had come to expect the trip, but most others had dismissed it as unreachable.

Compare the old requirements to this year's: For the Banff trip, qualifiers need $35,000 in net annualized premium over a one-year qualification period--and agents are required to bring in only one new application. And the format of the meeting will change as well. "We've redesigned this meeting from the bottom up," Foster says. "We asked our producers and our marketing companies what they wanted. They wanted interaction and they wanted education." Instead of a pure incentive focus, the meeting is now called a retreat, and the program will include education on three levels: peer-led, nuts-and-bolts breakout sessions; high-level industry discussions; and a spiritual or motivational component. "We're trying to create more of an experience. We're good at bonding and good at getting our message across when we get the chance," says Foster. So far, Foster reports no resistance to the new format from the elite achievers, but he hasn't ruled out a system of upgrades or extensions that will recognize their special sales efforts.

The qualification period for Interstate's incentive experiment is about half over, and numbers are looking strong. Foster's plan to "at least double" the number of qualifiers seems likely, and now it's time to start worrying about overflow.

And it may not be too soon to start planning the next retreat. Foster calls Banff a "transition location." While he plans to bring the 1999 retreat to the U.S., he didn't think that after so many first-class meetings abroad that he could start right off in the continental U.S. this year. For the second retreat, Foster is looking for a U.S. site with an upscale appeal that can support his larger meetings and educational focus, as well as help answer the question that, despite the changes, undoubtedly still nags: How can I top myself next year?