Incentive travel programs have a long history of helping companies grow their business through increased sales, build loyalty with customers, and earn incremental profits for the hosting company.
Incentive trips to exotic destinations around the world were the norm during the 1980s and 1990s. Companies in nearly every industry took part: automobiles, auto parts, computers, garage door openers, spa builders, pool companies, tractors, sprinklers, lawn mowers, and just about every other business you can think of sent their salespeople, distributors, and dealers on trips that were earned and paid for out of increased business to the host company.
These trips were not boondoggles, but rather sales tools, and very effective ones at that. Customers clamored to be part of the group that would charter The Orient Express, hold a cocktail party on top of a glacier only accessible by helicopter, dance with the Kirov ballet in St. Petersburg, have their awards banquet in the same place the Nobel Prizes are awarded, take a private tour of the Vatican, perform their own concert in the Sydney Opera House, and the list of incredible events goes on and on.
Why did these incentive travel programs work so well? The answer lies in Maslow’s Hierarchy of Needs. For those who took Psychology 101 in college, you already understand this concept. Here’s a quick review for you and an introduction for those who haven’t yet heard of this. As humans, we have basic physiological needs such as food and water. Once these needs are satisfied, we move up to safety needs such as security, employment and health. Next is our need for love and belonging, which include friendship and family. Once all of these basic needs are taken care of, we strive for esteem which includes achievement, respect from others, confidence, and self-esteem. And lastly, humans need self-actualization like achieving our potential as individuals.
It is esteem and self-actualization that drive us to achieve recognition of ourselves and from others. This makes salespeople and customers want, need, and strive to be on the trips. Spouse and partner recognition are also very important and falls under this category. Self-actualization, or in other words, “Why am I working so hard every day?” also drives people to want to be part of the winning group that is rewarded in such a big manner. This recognition does not come from awarding cash or merchandise. It is only being with one’s peers that provides the self-esteem and self-actualization.
What are the primary goals that can be achieved by an incentive travel program? We already know a program can drive sales. Additionally, many companies run incentive trips just to build relationships with their sales force and customers. Think of it as the ultimate way of taking a client out to dinner. By building a special relationship, you as the sponsoring company earn the right to ask your customer or sales force to work harder for you when times are lean.
If increased sales and better relationships aren’t enough motivation to run an incentive program, then calculate the profit % you make on incremental sales. Each dollar of profit made above and beyond your forecast has a higher % of profit built in because your overhead hasn’t changed.
You set the goals and by doing so, you ensure enough profit is coming in to pay for the trip and will leave you with incremental profits. The bigger and more exotic the trip, the more you can ask from your participants. Will a dealer sell 15% more of your product for a trip to Orlando? Not likely. But announce a winter ski fest to Switzerland, charter private yachts in the Caribbean, or take over castles in Ireland and watch your sales climb.
There are those that say in today’s economy, incentive travel needs more return on investment (ROI) than ever before. Therefore any incentive travel program needs more business content, more meetings, and more education.
Wrong! These are merely sound bites to try to convince today’s new management that trips are justifiable and are not boondoggles. Those managers are new to incentives and haven’t seen how they have performed in the past. I have. I have seen customers buy more products, salespeople working on weekends, and distributors pushing a client’s products like the client had never seen before—all just to be part of an amazing journey to an exotic destination. After hundreds and hundreds of programs in just about every industry, I have never once experienced a failed program or one that didn’t lead to increased sales and profits for the client and better relationships with their customers.
Incentive travel worked before for all of these excellent reasons and those reasons haven’t changed. It’s not necessary to fill your trip with education about your industry, your products, sales training, and other false pretenses for holding your event. Use incentive travel for the tool that is and let it work for you.
Larry Jacobson is a speaker, executive coach and author of the award-winning best seller, “The Boy Behind the Gate,” based on his experiences while achieving his lifelong goal of circumnavigating the globe by sailboat. As a speaker on sales skills and leadership development, Larry uses the six years of lessons learned at sea to speak with unique authority about conquering fear and staying the course whatever it takes. For more information please visit www.larryjacobson.com, email Larry at email@example.com or call 510-500-4566.