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49 IncentIve November incentivemag.com

Incentive Travel Buyer’s Focus: Program Design structures

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survey methoDologyThe Incentive Travel Buyer’s Handbook Survey was conducted online from October 2 – October 8, 2012. There were a total of 529 respondents who are subscribers of Incentive magazine. All charts and graphs included in this section are based on the 2012 survey results.

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A New Normal

Program Design Structures

>>“Travel is back.” That’s the good word from Scott Siewert, vice president of sales at USMotivation, and it’s echoed by his colleagues who have seen a comeback—with some caveats.

“Clients who cancelled trips three years ago are again motivating their distribution channels by offering an exciting trip with their peers,” says Mary Bussone, senior vice president, event management at ITAGroup, Inc. “It’s interesting to see that some of our clients are offering very strong, unique destinations to drive the incremental sales necessary to meet goals, while others are working with flat budgets.”

This year’s Incentive Travel Buyer’s Handbook Survey reveals budgets remain relatively stable from the previous two years. Playing it safe and not planning programs too far in advance continues as respondents report that economic uncertainty is their main concern.

One thing that doesn’t appear to be stagnant is incentive trip design. Economic, social, demographic, and technological trends and advances are remaking the standard incentive travel experience. Just check out the case study on a group of Oracle winners who went to Hawaii for more than sun and fun.

“Delivering experiences which resonate and endure is not simply about travel entertainment but rather about engaging participants by finding the sweet spot between travel, entertainment, imagination, perceived value and exclusive access,” says Marsha Pautler, director of sales and development, sporting events & corporate incentives at Horizon & Co. “It is this sweet spot where you will find a great motivating experience and where you will succeed both in demonstrating and stimulating loyalty.”

This year’s “Incentive Travel Buyer’s Focus” takes a closer look at some of the major trends, including ROI and social media and mobile tools, along with survey results and, of course, the nuts and bolts of orchestrating a smart and effective incentive travel program.

>> Carefully consider what you want the incentive travel program to accomplish. Determine what your business objectives are and how they fit with current market conditions, the overall business environment, geopolitical events, your own company’s strengths and weaknesses, and your competition’s. How good is your product or service? Determine who would be involved in meeting those goals: What groups should be the program’s motivational focus? Remember, what motivates a sales staff may not work for people in accounting, customer service or other employee groups. Keep Objectives:

1 FOCUSED. Objectives should be simple, specific and clearly stated.

2 ACHIEVABLE AND ABOVEBOARD. Keep goals doable, and do not

encourage risky or unethical business practices in pursuit of an incentive program goal.

3 MEASURABLE. Calculate the percentage sales increase over last year,

an increase in market share, reduction in

plant accidents, suggestions that improved a process, led to cost savings or achieved a new revenue stream. But also evaluate less bottom-line performance indicators like customer satisfaction, product knowledge, job satisfaction, morale and retention rates. (For more information, see “ROI Strategies” on p. 56)

4 TIMED RIGHT. Every business has its seasonal ups and downs. Be sure to

take these cycles into consideration and incorporate them into your goal structure. Some companies like to launch sales incentives during traditionally slow periods, which look to generate more sales than would be the norm but perhaps not as many as during peak periods.

5 IN SYNCH WITH THE CORPORATE CULTURE. Make sure they are in line

with the organization’s goals, values and policies. This is a good starting point for getting feedback and support from senior management, an increasingly important part of a program’s success. Incentive experts also suggest that one program be just a part of an overall culture of recognition to keep a workforce motivated and appreciated all the time.

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— by Karen Gines

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Program TyPesThere are two basic structures, but programs don’t have to be locked into an “open” or “closed” format. Multi-level programs give participants the opportunity to winincreasing levels of rewards (merchandise, gift cards, individual travel certificates) based on their performance, with higher tiers tying

into higher performance and the promise of an exclusive group trip.

OPEN-ENDED PROGRAMS award all participants who achieve a predetermined level of performance. This strategy produces better results as it targets the approximately60 percent of people who generally function

at the average level. But budgeting may be more difficult since there is no way to pinpoint the final outcome.

CLOSED-ENDED PROGRAMS limit the number of qualifiers to only a set number of top performers. While easier to budget, this strategy can alienate salespeople, for example, who make quota but still aren’t at the top of the heap. Also, repeat winners may dominate the program, creating resentment among other team members. You may want to consider setting a policy regarding repeat winners.

CreaTing a BudgeTThe profits or cost savings generated by a properly structured incentive program should cover its costs, but you probably won’t know the exact results until the programhas concluded. Here is a general budget breakdown; percentages may vary.

1 ADMINISTRATION. Should account for 5 to 15 percent of the total program

cost. Spending will fluctuate, depending on the intricacies of the program, how much analysis will be done on the results, how many hours are required to handle administrative tasks, whether you outsource any of the responsibilities, create websites, or purchase specialized software.

2 COMMUNICATION AND PROMOTION. Typically standing at 20 percent.

A critical part of the program so don’t cut corners and be sure to be thorough and transparent. Online and mobile communications can help bring down costs and make it easier to sustain interest in the program with reminders and messages. (See “New Technologies” on p. 60)

3 AWARDS. The bulk of your budget will be spent here, 70 to 75 percent.

For a travel award, this money covers transportation, accommodations, food and beverages, activities, events, any special entertainment, meetings, room gifts and amenities, as well as miscellaneous fees, gratuities and taxes. Depending on the program and what’s required of your

Case sTudy>> Client: Oracle

>> Partners: Aimia and the University of Miami RJ Dunlap Marine Conservation Program

>> Destination: Hawaii

Program: “Shark Encounter—Shark Tag—You’re it!”

>> Participants: Oracle’s sales leaders, President’s Club and Club Excellence winners. “Oracle has a learner culture and a very active culture,” says Fay Beauchine, president, business loyalty for Aimia’s U.S. region. “The demographics of their top performers are fairly young and they like to be on the move. In designing programs for them, you can do physical things. This activity wasn’t mandatory, but pretty much everyone wanted to do it.”

>> Objectives: Oracle wanted to reinforce the value of the incentive travel reward and create a bonding opportunity for its employees through an exceptional CSR activity that also contributed to the Hawaiian community and, in this case, the wider oceanic ecosystem. According to Beauchine, the program had five goals: helping local communities sustain themselves through jobs and services; giving participants the chance to become “citizen scientists,” learning and contributing to research while having fun; saving the shark population, which has been experiencing serious declines, and learning about the value of a species equated with only danger in popular culture; tying research efforts to ocean conservation policies; and strengthening employee engagement.

>> Program Highlights: Aimia worked with the RJD Marine Conservation Program to turn Oracle attendees into researchers for a day, collecting data alongside the conservation experts that will be used to prevent the global decline in shark populations. Participants caught and tagged a shark, releasing it back into the ocean where it could be studied for migratory routes and residency patterns.

The Oracle group learned more about their CSR adventure during breakfast at a local marina where they boarded boats. The sharks were caught and brought in via hand lines, and participants aided in taking tissue samples, muscle biopsies, blood and standard measurements. Harmless satellite tags were placed on the sharks’ dorsal fins and they were released. The safety of the sharks and participants on board was always top of mind.

>> Results: Google Earth technology on a dedicated client website allowed attendees to continue tracking the tagged sharks and share their experience and knowledge with fellow employees, friends and family, extending the program beyond the trip home. Data gained from the research will help lawmakers set conservation policy. The activity also encouraged Oracle attendees to face their fears, given sharks’ menacing reputation, and translate that to real-world challenges. The client was satisfied with its return on experience. “You’re giving an experience of a lifetime, something they can’t easily replicate on their own,” says Beauchine. “And that’s one of the key principles of incentive travel.”

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participants to achieve the objectives, you might also have to put aside a portion of the budget for training, education and new product launches. This is especially true if you are targeting channel partners like dealers and distributors.

Deciding where to go for the incentive trip is a significant decision. Budget is a starting point, but you must keep your audience in mind. What’s their level of travel expertise and what kind of destination would appeal to them? Make it worth their efforts. Decide whether the winners will bring guests and/or family. Will senior management be there? What are their expectations? How much interaction will there be with attendees? Plan the trip as close as possible from the program’s end date to reinforce the recognition in a timely manner.

Short-term vS. Long-term ProgramSDetermining how long an incentive travel program will run depends on the needs of your organization, the objective, and who is involved. For example, if sales are sluggish, maybe a quick quarterly incentive is in order. A year-long program or possibly longer may be better if a product or service is being introduced and requires time for buy-in, education and promotion on the part of sales, customer service and support staff.

tax ISSueSGenerally, the federal government views incentive travel as “income,” and it is taxed as additional compensation. So depending on the type of program, the market value of thetravel award, and the cost of any accompanying merchandise, you and your incentive winners might have to report earnings related to the incentive program to the IRS using 1099 or W-2 forms once the campaign has been completed. The same factors will affect whether your company can deduct any of the award value from its books, so it’s important to understand the tax issues upfront. It is common for companies to reimburse winners for the taxes due on an incentive award. Contact your tax advisor or attorney for more information.

LaunchIng the ProgramFirst impressions strongly impact program participation. An integrated marketing campaign is not out of order, and you’ll have many creative opportunities to promote the program and communicate with participants throughout its duration. Consider a customized website, audio and video, a social media component for feedback, questions, tips or encouragement. Get senior management on board and expressing the importance of the program to the organization’s business strategy.

Here are a few ideas:>> Start with a theme and slogan, usually based on the destination and a company’s objectives.>> Create eye-catching teasers, online and offline, and an enrollment kit that clearly outlines the program’s goals, qualification requirements and rewards. Follow up with an official program announcement that details the “fine print” issues, such as objectives, rules, measurement systems, timing and tax implications.>> Give your target audience a reason to respond. Use the trip and the many facets of the destination as a lure.>> Make sure interested individuals sign up. All information collected should be accurate for contact and updating purposes.

the QuaLIfIcatIon PerIodMidway through the program, it is important to make sure that participants are on track. This can be achieved by keeping accurate records through your own database system or an outsourced provider’s.>> Participants should easily be able to chart their progress on a specially designed website or mobile app, for instance. Regularly scheduled e-mails or texts motivating participants, congratulating them, and reminding them to check their status are great ways of communicating and propelling the program forward.>> Determine whether additional resources are needed to bolster performance, such as product or sales training.>> Take note of any external factors impacting the incentive program.>> Consider sending at least some materials

directly to a participant’s home, rather than to the office, especially if spouses or children are included in the trip.

PoSt-Program evaLuatIonPerform a detailed examination of the program as a whole, considering both the results of the winners and the record of those who did not qualify. What percentage qualified; what percentage didn’t? Why not? Feedback is essential, so you’ll want to survey your participants on all aspects of the program—not just on the trip itself. Collect both quantifiable results and anecdotal feedback.

What to ask participants:>>Timeliness of the program, its rules structure and qualification requirements, the clarity and quality of communications and trip materials or itineraries, the awards offered in addition to the trip, and the impact of training efforts, if any, on their performance.

What to ask the program’s administrators:>>Any specific problems or notable successes they encountered with the incentive. If all or part of the program was outsourced, evaluate how well those partnerships worked.

Make sure that all information is organized and easy to understand for reporting purposes. If you used incentive program management software, or an outside incentive provider, quantifiable results should be easily accessed and smartly presented. Also, it is required by law to report participants’ additional earnings to the Internal Revenue Service.

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the Lowdown

Do you expect your budgets to change in 2013?

No change: 59.4%

Increase: 26.6%

Decrease: 14.0%



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ROI Strategies>>For years, evaluating incentive programs from a true business perspective was seen as something akin to eating healthy: You know it’s really the best thing for you, but not everyone has the discipline to do it. If a participant survey showed that everyone had a good time in Miami, the program was seen as a success. But recent economic turmoil and perception issues combined with calls for financial accountability and transparency have made calculating a program’s return on investment a virtual necessity.

“The last three years have absolutely brought more scrutiny and optics to the ‘ROI’ of group travel,” says Mary Bussone, senior vice president, event management, ITAGroup, Inc. in West Des Moines, Iowa. “Companies that have focused on determining metrics

surrounding their events understand and support the impact these events have on their business.”

Incentive companies can assess ROI for clients, ranging from hard metrics like financials to softer ones like retention and engagement. More organizations are now willing to pay for a thorough survey and evaluation. “Engaged companies get higher returns and profits,” says Tina Weede, CRP, president of Atlanta-based USMotivation, which utilizes the Phillips ROI Methodology, considered the de facto standard.

At its most basic, ROI can be defined as incremental profit over total cost. However, the approaches to measuring ROI are complex and varied depending on the kind of program run and the objectives set.

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The Lowdown

Top 10 Objectives for Incentive Travel Programs

1. Recognize performance

2. Increase sales

3. Build morale

4. Improve employee loyalty

5. Build customer loyalty

6. Foster teamwork

7. Improve customer service

8. Increase market share

9. Sell new accounts

10. Introduce new products



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The traditional sales program can be fairly straightforward in terms of what’s measured:>> Units or dollars sold during the quali� cation period>> Increase in market share>> Incremental sales gains during the quali� cation period>> Percentage of audience that participated>> Percentage of audience that met goalA channel partner program might have di� erent variables as does an incentive program geared toward non-sales employees.

The latter’s softer measures could include:>> Employee retention >> Customer service, i.e., reduced number of complaints, increased customer retention, increased number of problems resolved to customer satisfaction>> Lowered absenteeism

THE LOWDOWN

How have your budgets for incentive travel awards changed from 2011?

Increased by 5%-15%: 13.0%



Increased by more than 50%: 1.1%

No change: 56.4%

Decreased by 5%-15%: 13.6%



Decreased by more than 50%: 3.8%

>> Job satisfaction and morale>> Improved productivity

ROI can also be a� ected by internal and external factors, some unexpected or outside your control. � ey include the state of the economy, the health of your speci� c industry and competitors, discounting of products and services, returned merchandise, training gaps, poor program promotion, structure and reward choice leading to lack of interest, and employee turnover.

For help in determining ROI, go to the Incentive Research Foundation’s free Master Measurement Calculator tool at http://www.myvirtualpartner.net/irf/. Site, an organization devoted to excellence in motivational travel experiences, o� ers downloadable white papers on measuring the results of your travel program at http://www.siteglobal.com/p/cm/ld/fi d=205.

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New Technologies: Web, Social Media, Mobile, Apps >>Not long ago, the Internet changed incentive program communications. Today, the sweeping use of social media, smart phones and tablets have ushered in a new age for program promotion, content and delivery.

“Technology is absolutely a game-changer,” says Mary Bussone, senior vice president, event management, ITAGroup, Inc. “With the generational mix, communication methods must be very different and customized. Our websites are very dynamic and are utilized as a form of communication throughout the life of a campaign. On site, there’s the potential for gamification and interactive networking. Program information is downloaded on an app for the participants to use on site and interact with their fellow travelers.”

Still, incentive experts caution that because of liability, privacy and safety concerns,

many organizations avoid using more public networks like Facebook and Twitter. Creating private interactive networks and sites has been another option. “We have used access-restricted micro-sites to generate excitement, deliver content, facilitate planning and ‘pre’ introduce the group—especially where you might be pulling from multiple office locations across the country—even before departure,” says Marsha Paulter, director of sales and development, sporting events & corporate incentives for Toronto-based Horizon & Co.

Organizations have been using forms of social media and apps in everything from the actual campaign to the trip itself. Participants can use apps to check their progress towards reaching their goal, get or share tips for success, ask questions and engage in contests

or surveys that test their product or company knowledge. When they’ve earned the trip, a custom app can include all itinerary and hotel information.

Dana Fowler, president of St. Louis-based Media Flashpoint, touts mobile and texting. “Consumers have different ways of connecting to the Internet now, and by 2013 the most popular will be a mobile device,” says Fowler, who notes that 97 percent of text messages are opened in three minutes. Given that, she suggests using the power of mobile before, during and after an event. This can include pre- and post-event polling, alerts and reminders of tee times or spa treatments, surprise gatherings or changes in the itinerary, a short message from the CEO, daily motivational quotes, or discounts and coupons for an item at the hotel gift/pro shop or a local attraction.

Working with Explore St. Louis, the city’s CVB, Fowler and company set up a mobile website promoting a concert under the Gateway Arch. “It had information about the artists; you could play one of their songs or a little trivia game about the Arch,” explains Fowler. Even more helpful was the gridded map, making it easier for attendees to find their friends by texting the number of the grid.

Fowler and other incentive planners recommend a mobile scavenger hunt as a fun way to team-build and learn about a destination. Apps such as Scvngr and GooseChase are location-based gaming platforms that allow you to create challenges and earn points and prizes.

While social platforms promise a new era of engagement, getting caught up in the technology can overshadow one of the principles of an incentive program: Don’t forget that face-to-face events and relationships are at the heart of recognition for a job well done.

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