Sales & Marketing Management - July/August 2008 - (Page 31)

AVAILABLE IRF RESEARCH “The Attractiveness and Effectiveness of Incentive Reward Options–A Case Study” (1993) “The Long Term Impact of Incentive Travel in an Insurance Company” (1995) “Does Incentive Travel Improve Sales Productivity?” (1998) “Determining The Return on Investment of Incentive Travel Programs” (2001) “A Survey of Incentive Travel Visit www.theirf.org for more information “Market Analysis of Incentive Travel in Germany” (2001) “The Market for Incentive Travel in Belgium and Luxembourg” (2002) “Market Study for Incentive Travel in Mexico” (2003) “Incentive Travel Survey: The Dutch Corporate Market” (2004) “New Zealand Incentive Industry” (2007) Program Business Strategies” (2005) “Assessing The Impact of Sales Incentive Programs: A Business Process Perspective” (2007) In addition to the above, the Incentive Research Foundation has funded a number of other studies that examine specific incentive travel destinations. These market studies provide both an inbound and outbound look at incentive travel activity: its and provide an ROI,” Ozer says. “It has to do with the extra dollar the employee made. You spend 10 cents on setting up the program, 60 cents goes to the award, the company keeps 40 cents and you’re all set.” Companies that look at incentive programs based on cost alone might change their prize destinations because of budget trims, inflation or the weak dollar. But they would be wise to think carefully about their employees first, including their personalities, income level and lifestyles. That’s because, according to Dawson, the reward you provide must be something that the target audience could not (or would not) buy on their own. “Perceived value is very important,” he says. “Any reward choice that is made without first performing a complete analysis of the intended audience is a mistake.” Seeking concessions on travel components or removing aspects of a program due to budget will only serve to create a less-than-memorable experience for the participant, he adds. Indeed, an unknown resort somewhere in the Caribbean might provide the lowest cost for the trip, but it may lack the quality that well-seasoned travelers would expect. Such a destination would work for a young, entry-level sales audience, but not for older principals. With increasing fuel costs making airlines cut seats and raise prices, travel rewards can be among the most [THE PULSE] 43 expensive incentive programs. Besides, if what your employees really need is cash, why offer travel instead? The key is “separability,” Ozer says. “People tend to mentally separate cash from non-cash items. Cash is grouped with compensation—money for spending, saving and investing. Even if you give a significant cash award, it will probably be spent on day-to-day stuff.” “Cash is compensation, especially for top-performing employees,” Dawson adds. “It has a real value (the dollar amount), but little perceived value. Cash rewards will disappear amid the employee’s bills, and it might be hard to take away since it might be unconsciously taken for granted.” “Money is probably not going to solve whatever the person’s problem is,” Ozer says. “A trip will really enhance their life, and it will be memorable. As long as the person remembers, he feels incentivized. In addition, people talk about their trip, making it very promotable. No one likes to talk about money, or they talk it down, whereas they brag about trips.” In short, travel is a tangible reward that works more effectively as a motivator than cash or cash substitutes. “This is true except where compensation is not adequate for the job, in which case, an improved cash bonus system delivered via paycheck, stored value card or gift cards should be considered,” Ozer says. “An incentive program should be layered on top of compensation that’s already adequate. If all that people need is money, no incentive program will work.” —Izabella Iizuka Editor’s Note: Check out the September/October issue of Sales & Marketing Management for Part II of this article, which will examine the issues associated with individual versus group travel, as well as methods for calculating ROI. JULY/AUGUST 2008 SALES &MARKETING MANAGEMENT PERCENTAGE OF WORKING MOTHERS WHO SAY THEY’D CHOOSE A PAY CUT IN ORDER TO SPEND MORE TIME WITH THEIR KIDS. SOURCE: CAREERBUILDER.COM SURVEY www.salesandmarketingmanagement.com 31 http://www.theirf.org http://CAREERBUILDER.COM http://www.salesandmarketingmanagement.com

Table of Contents Feed for the Digital Edition of Sales & Marketing Management - July/August 2008

Sales & Marketing Management - July/August 2008 Contents Editor's Letter Brian Tracy University Smart Sales Sales Strategy Smart Marketing Marketing Strategy Smart Management Management Strategy The Mother Lode of All Market Data Returns Embracing the Future Training Technology Incentives/Motivation Don't Become a Target Abroad Book Excerpt On the Road The Way I See It

Sales & Marketing Management - July/August 2008

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