Going It Alone: Individual Incentive Travel

This article outlines the most effective ways to use individual travel as part of your incentive program. It shows how to introduce this innovative type of incentive and explains the different products on the market and where to find them.

BACKGROUND

Individual incentive travel has emerged in the last ten years to become a major factor in the incentive business. Before then, many organizations offered trips as rewards on an individual basis, but they generally reserved them for special occasions rather than making them part of their traditional sales and dealer incentive programs.

What a difference a decade makes. Today, individual incentive travel is a stalwart in corporate America. It has become a vital ingredient in a large percentage of traditional sales and dealer incentive programs and has even found its way into other types of employee award programs.

DEFINITION

Individual incentive travel is the awarding of a trip to an individual employee or customer plus a spouse or guest and sometimes even the immediate family. It differs from traditional group travel awards in that each member of, say, the sales force, may choose a different destination. Before the proliferation of individual award options, individual trips usually were planned by the company's travel agent and the winner, based on a budget set by the company. Today, the travel industry offers dozens of prepacked options.

CRITICAL ISSUES

The growth of individual incentive travel did not come without controversy. Proponents of traditional programs argued that individual travel failed to address the fundamental objective of travel: building camaraderie and mutual understanding between management and top performers. They argued that individual travel did not enable companies to create the sort of unforgettable travel experiences that people could never do on their own. Nonetheless, businesses have marched on, and almost all the major incentive companies, some of which resisted the trend, have introduced individual travel products to keep up with demand.

Why? For one thing, the travel preferences of people have changed. While a large percentage of Americans used to travel in group tours, today more and more prefer to travel on their own. Also, with the increase of two-income families, people have less flexibility in their schedules, so they can't always travel when the group is supposed to go. Finally, some award recipients have indicated in follow-up surveys that they would like their award to be a trip "away from the workplace."

INDIVIDUAL VS. GROUP

Companies considering individual incentive travel should take a close look at how it differs from group programs and understand the elements essential to making the most of an individual program.

While most companies take other marketing decisions seriously, they often treat incentive programs like a sideshow. Research by the Society of Incentive Travel Executives (SITE) Foundation indicates that many organizations do not take a systematic, scientific approach to their incentive programs. They tend to view them as contests designed to stimulate fun and excitement and achieve sales or other performance goals.

This approach has several drawbacks. Award decisions often are based on the opinions of management, sometimes reinforced by a survey, rather than on a strategic understanding of incentives in the workplace. That's no surprise, since incentive planning is not taught in business schools or at management seminars. There are no books on how to do it properly and little research, although the SITE Foundation is beginning to do more of the latter.

What research has been conducted suggests that companies should take a much more serious look at their incentive programs. One SITE study found that incentive travel boosted sales but could also decrease the quality of sales if not properly structured (see Article 4020, Strategies for Success). A 1997 study, "Does Incentive Travel Improve Sales Productivity?", conducted for SITE at the University of Luton in the UK, found that the incentive travel program motivated the top performers, and also found a correlation between the launch of the program and an increased rates of sales increases (see Research in Article 4010, Incentive Travel Overview).

Before determining whether to use individual or incentive travel, organizations should first look closely at their program objectives and the nature of the recipients. If objectives include building camaraderie, or if meetings or other group communication efforts are involved, individual travel is out. But if you're looking for an alternative to traditional cash or merchandise programs, individual travel begins to have appeal. This is especially true if you want to award individual customers or dealers who have no desire to take a trip with the corporation or who simply cannot meet the timing requirements.

KEEPING PROGRAMS FRESH

Organizations and incentive suppliers often debate the motivational merits of various awards. If you ask employees what they want, they'll often list cash, travel, and merchandise in that order. However, when properly used, incentives should not be designed so much to motivate as to draw attention to organization objectives, introduce fun into the workplace, and recognize performance in a way that is clearly distinguishable from cash compensation.

Evidence suggests that companies should select desirable, tangible (noncash) rewards to recognize performance in programs that may not be repeated every year or be continually used, and should use cash for what it does best: compensation. It is more important to keep programs fresh by changing and updating the award mix than to worry about whether you have found the optimal motivation award. Employees should get the most satisfaction from achieving goals and being publicly recognized, with the rewards representing the icing on the cake.

Remember, too, that focusing all of the attention on awards, rather than on the process of improving performance, leads to an atmosphere of incentive dependency, in which employees learn to expect the programs and work less productively unless there is a contest going on.

ELEMENTS OF INDIVIDUAL AWARDS

Thanks to the ingenuity of incentive travel suppliers, you can find an individual incentive program with extraordinary trips that are far more exciting than any that typical recipients could get on their own. Unfortunately, many companies that use these awards fail to take full advantage of the many ways the travel industry can make winners feel special.

A lesson on how to create and promote these awards comes from all-music stations, such as VH-1 and MTV. To appeal to their target audience, they create sweepstakes that offer fabulous individual trips to events with all sorts of special amenities (first-class travel, limousines, penthouse suites) and invitations to parties and other activities of interest to their young audiences. Sponsors create such awards, presumably, to boost response and make a statement about what they stand for, in this case great parties and entertainment.

Here are key steps to building an individual travel program:

1. Determine the objectives. Keep it simple. There should be no more than three goals, and they must be related.
   
   
2. Set the budget. What is the value of the anticipated incremental performance and what percentage will you plow back into the award, promotion, and tracking?
   
   
3. Look at the demographics. Consider your audience carefully. How much do they travel? What would have appeal? How diverse is the group?
   
   
4. Look for ways to make the trips special. Even the most ordinary destination can be made exceptional with a little creativity, and there's no reason why a fabulous trip for two can't be almost as extraordinary as a special event created for groups.
   
   
5. Promote the program. Get travel posters or gifts that you can use to remind recipients of the award.
   
   
6. Present the awards in a meaningful way, either in person or with a special letter of appreciation mailed to the winner's home.
   
   
7. After the program, survey recipients to assess the program and the award. Did you achieve your objectives? Did the employees value the award?

ENHANCING THE APPEAL

Here are some easy ways to make an individual trip special:

• Present the award in a public ceremony before the recipient's peers.
  
  
• If you mail it to the home, have it sent with a personal letter and gift from a top executive.
  
  
• Offer upgrades to business or first class.
  
  
• Send a personal letter and a gift, such as a fruit and wine basket, for the winner's arrival at the hotel. If possible have a personal welcome letter sent by the hotel general manager.
  
  
• Provide tickets to a special event of interest to the recipient.
  
  
• Offer the option of taking along additional family members or friends.
  
  
• Provide access to a personalized trip-planning assistance program, in case the winners don't have travel agents whom they regularly work with for assistance with travel details.
  
  
• Include special gifts related to the trip, such as travel books, a camera, binoculars, or fishing gear.
  
  
• Enable winners to pre-select their ideal award at the outset of the program, so that they have their own dream to work toward. People work better when they visualize the result of their efforts.
  
  
• Provide special services at the hotel or airline, such as personalized concierge services or access to executive floors or airport lounges.
  
  
• Send the recipient special discount packages or information offered by the destinations.

HOW TO APPLY INDIVIDUAL TRAVEL AWARDS

Because of their great variety and flexibility, individual travel appears frequently in:

• Contests and sweepstakes, such as the examples provided above.
  
  
• Continuity programs, such as frequent buyer programs.
  
  
• Gift-with-purchase. Luxury auto dealerships and others selling high-end products often use a travel offer to stimulate sales.
  
  
• Sales and dealer incentives. Individual travel is most often used as a middle- or top-tier award in a program that also offers merchandise.
  
  
• Nonsales employees. Travel is sometimes used to recognize employees for special suggestions or exceptional performance.
  
  
• Gifts. Travel certificates make great gifts for loyal customers or employees.

TYPES OF INDIVIDUAL AWARDS

Individual travel takes numerous forms:

• Pre-selected award. In this case, you devise the individual award package in advance, selecting the destination, transportation, hotel, and events so you can promote them throughout the program. This approach is most often used in consumer promotions. It enables the audience to visualize the award in advance, but it runs the risk of turning off a segment of the audience. Yes, there are people who don't want to go to Disney World. Using this approach, you don't pay for the award until the recipient takes the trip.
  
  
• Award certificates. Airlines, hotel chains, and incentive companies have programs offering certificates based on various price plateaus. Within a given price range, employees can select from specific destination or hotel options. A few suppliers let you add bells and whistles to these certificates and provide winners with a catalogue that enables them to visualize the awards they could obtain, based on their level of performance. Certificates let you offer travel with the same simplicity as merchandise, but they run the risk of being redeemed for practical purposes, such as a visit to a family member. Do something to make the certificate special, either by adding special amenities or by presenting it in an especially personal manner. Also, make sure you buy certificates from a reputable company that is likely to be around when your winners redeem their certificates.
  
  
• Air miles. Most major airlines enable corporations to buy their air miles (generally for about two cents per mile) that recipients can redeem against their frequent flyer programs. These programs have the greatest appeal in consumer promotions, where they are fast becoming the trading stamps of the 1990s, but they also used in sales and dealer programs. If you use air miles, make sure your recipients have frequent flyer programs for the airlines you've selected, and do something to make the presentation special, since the miles you give will quickly get lost in the recipients' mileage statements.
  
  
• Vacation discount packages. Certain travel wholesalers put together discount packages and resell them to companies, which offer them to consumers in promotions. These offers enable consumers to get a discount at a resort in exchange for making a purchase. Such programs should be used with great caution, however. The deals often come with restrictions that make them almost impossible to use, and the values aren't always as good as they look. As a result, many consumers view the awards with great skepticism.

SOURCES FOR INDIVIDUAL INCENTIVE TRAVEL AWARDS

Individual incentive travel award options are almost as numerous as the number of travel suppliers. Here is an overview of the options:

• Travel agents. Your corporate travel agency can arrange trips, but it may not understand the importance of special services and recognition involved with individual travel. If you want to make your travel program special, use a travel agent that has demonstrated experience developing individual or group incentive awards.
  
  
• Hotels. Almost every major upscale chain has incentive certificate programs with various tiers, enabling you to offer a flexible, inexpensive award that winners can book for themselves through the hotel. Make sure you ask about packages of amenities that hotels offer to make guests feel appreciated. There is no better place to make your winners feel special than at the hotel. These certificates usually are paid for by companies upon issuance, and some chains have minimums. To get the details, ask the person at the hotel responsible for meetings and incentive sales or corporate sales.
  
  
• Airlines. Most major carriers have award certificates priced by zone of travel. This gives winners the ability to pick and choose zones. Prices are based on such variables as quantity, period of travel, zones, and when you choose to pay. Be sure to ask about amenities, such as in-flight gifts, access to executive lounges, or drink certificates. Some airlines include hotels and car rentals in the package. Most have minimums but will look the other way if they see the possibility of future business. Call the corporate office and ask for the person in charge of incentive or meeting sales. Programs based on air miles are easy to buy, and the airlines throw in services that enable you to track redemptions by each recipient. Surprisingly, these programs are not always sold by the same people who handle airline award certificates. When you call, ask for the person in charge of selling air miles.
  
  
• Incentive companies. Most major companies that sell incentive programs have various types of individual travel programs. They usually offer certificate programs based on tiers, much like merchandise in a catalogue, and some let you add special services and amenities. The winner earns a level of choices in a catalogue based on performance. Many incentive companies put together programs using certificates from airlines and hotels. Some of these companies will not want to do business with you unless you bring in at least $25,000 worth of business annually. That's because they have a lot of services in program planning, promotions, and tracking that they include in the travel price.
  
  If you buy from an incentive company, do your best to determine whether it will be in business when your winners redeem their awards. Find out what kind of customer service program it has, such as a 24-hour toll-free number. Make sure that hotels and airlines readily accept the certificate. Have someone call the front desk at several hotels to find out. You don't want a top customer calling from Brazil at midnight complaining that the hotel won't accept his or her hotel certificate as payment.
  
  
• Destination management companies. Some of these organizations, usually based overseas, develop complete land packages, including hotels, transfers, and tickets to attractions. However, make sure that the company you use regularly handles individual travel.
  
  
• Vacation discount packagers. If you want to offer vacation discounts in a consumer incentive program, select your supplier with care. Make sure it will be in business. Check references. Look carefully at the fine print, and make sure the resorts, hotels, or cruise lines offered are known and have appeal. If looking for discounts is your long-term strategy, it might pay to contact the resorts directly. Often, they will provide attractive pricing and special services to companies that block space well in advance.

Among the companies that offer individual travel programs are the following:

American Airlines. "Something Special Incentive Flight Certificate" and "Something Special Incentive Gift Certificate." Noted features: customized award; guaranteed price for life of program; high perceived value; travel earns AAdvantage Miles. (Customer pays upon issuance; no minimum order.) Call Ross Sawai at 972-425-6725; fax 972-425-7065.

Continental Airlines. "World of Thanks" individual incentive travel certificates. Noted features: prices as low as $350 for a round trip within the contiguous 48 states; no blackout dates; few restrictions. (Customer pays upon issuance; minimum 10 certificates.) Call Brenda Davis at 800-322-8662; fax 713-787-2047.

Delta Air Lines. "Win the World" individual incentive certificates. Noted features: seven-day advance reservations; two-day minimum stay; flexibility in offering first class, business class, and international travel based on number of certificates awarded; each certificate $429; additional discounts possible for large purchases. (Customer pays upon issuance; minimum 10 certificates.) Call Buff Ramsey at 800-325-1231; fax 800-325-0456.

Dittman Incentive Marketing Group. This company offers a variety of products from hotels (Marriott, Sheraton, Hyatt, Hilton), airlines (American, United, Delta), cruise lines (Carnival, NCL), and other providers. Noted features: valid for 15 months; travel on dates of recipient's choice, weekends or weekdays; single or double occupancy. Call David Dittman at 732--248-0707; fax 732-248-1411.

Holland America Line. "Individual Incentive Program." Seven- and 10-day cruises to the Caribbean and Alaska. Noted features: flat rate for any season; awards certificate. (Customer pays upon redemption; minimum order five cabins.) Call Carol Berwager at 800-445-3731; fax 206-281-0631.

Incentive Travelers Cheque International. Full-service incentive agency offers individual travel products from a wide array of suppliers, including airlines (United, American), hotels and resorts (Hyatt, Marriott, Sheraton, Ritz Carlton, Walt Disney), cruise lines, and car rental agencies (Hertz). Noted features: certificates valid for at least 12 months; no price listed on certificates; no contract to sign; program development and other support available. (Customer pays upon issuance; no minimum order.) Call James Feldman at 312-527-1111; fax 312-527-1116.

ITT Sheraton Corporation. "Global Awards Plus" individual incentive travel program offered in a variety of forms ranging from the "Luxury Collection" to "Anytime" and "Weekend" awards. Noted features: over 310 participating hotels in 55 countries; breakfast for two and room tax included; last-room availability; room upgrades upon check-in when available; award levels for every budget. (Customer pays upon issuance; no minimum order.) Call J. J. Gubbins or Corey Hadnagy at 800-PLUS-227 (800-758-7227) or 312-565-0735; fax 312-565-1293.

The Journeymasters. This incentive travel company offers "Going Places higher & higher," a plateau incentive program. Noted features: great choice of destinations; easily implemented; awards for two available. (Customer pays upon issuance; no minimum order.) Call Robert J. Guerriero at 978-745-4500; fax 978-741-4816.

Marriott International. Range of individual travel products includes "Marriott Travel Awards," "Marriott Cheques," "Marriott Dinner for Two Awards," "Marriott Golf Award Packages," and "Choice Award Packages." Noted features: deluxe accommodations for two, including breakfast and all applicable room taxes; valid for 15 months. (Customer pays upon issuance; no minimum order.) Call Sharon Waters at 301-380-1235; fax 301-380-1137.

Sun Marketing Associates. Two- to four-day stays at deluxe resort properties. Noted features: 50-certificate minimum. Call 813-442-6656; fax 813-442-6959.

Top incentive companies. Full-service incentive companies generally sell individual travel award programs to companies that spend $50,000 or more each year. (The top companies may expect even more volume.) The top three companies are: B.I. Performance Services (612-835-4800); Carlson Marketing Group (612-550-4000), and Maritz Performance Services (314-827-4000). None of the three responded to the survey used to compile information for this article.

TAX IMPLICATIONS

If individual travel is given as an incentive, it is taxable to the recipient at its fair market value and deductible for the sponsor. If it's a gift, deductibility to the corporation is limited to $75 per recipient. See Doc. 4030, Travel Tax Laws.

TRADE SHOWS/SEMINARS

For a list of Industry Events, go to #9510, Calendar of Industry Events.

ONLINE SERVICES

International Currency Express helps provide participants in incentive tours with the added convenience of being equipped with local currency before they arrive at their foreign destination. Rates compete favorably with those offered by competitors both in the U.S. and abroad. Check out their convenient mail-order service, Currency Rush, at http://www.foreignmoney.com (or call 888-278-6628).

Although apparently more focused on group than individual travel, Incentives To Intrigue, at http://www.incentivestointrigue.com, offers some useful features, such as links to other sites helpful to the incentive travel planner, industry news, and a resource directory with search capability.

Doctor Travel, at http://www.doctor-travel.com, provides advice and resources--and even answers individual questions--about travel.