The Incentive Travel Issue: Reward, Attract and Retain
Biz Events Asia highlights key trends and important elements of the incentive travel business in its current form.
Words: El Kwang
The new form of incentive travel requires design and communications not only to reward talent but also to attract and retain them as a company’s profitability strategy.
Gone with the crisis
A mere six years ago, the impact of the global financial crisis gave incentive travel a bad name. Governments and companies introduced strict governance that quashed travel demand and eventually led to the downsizing, merger and closure of businesses like incentive houses and travel agencies. Some of these service providers diverse their expertise into other revenue streams like event management. Those who focused on international inbound businesses, threw their hat into the domestic business rink – further diluting the already dwindling business pool.
The lucrative incentive revenue stream was quickly ripped from hotels and venues. Their sales team were put to the test in account retention whilst the marketing team did all they could in offering discounted rate and value-add tactical deployment. Corporations that still had event needs experienced harsher approval processes that involved higher management levels. Legal teams on the buyers’ side were engaged to implement confidentiality agreements for the sellers to avoid undesired mainstream media coverage. They also pushed the sellers to further relax or fully waive cancellation penalties or extended deadline to rebook “postponed” events.
The struggling business events industry was in shock but the experienced leaders quickly focused their team in targeting markets like the “recession proof” association sector. The industry tapped onto their creativity skills to continue to innovate. They pushed on until economic recovery and the need for incentive travel was revived.
Back with a vengeance
A couple of research released in 2014 and 2015 confirmed what buyers and sellers experienced - the return of a new form of incentive travel. Examples of such research and studies, which detailed reports and figures can be found on their respective company websites, include
• 10 trends paint a picture of the future of the incentive travel by the Incentive Research Foundation (IRF).
• SITE Index Annual Study 2014 by the Society of Incentive Travel Excellence (SITE).
• Asian Incentive Events in New South Wales Australia Expenditure and Retail Impact Report by Business Events Sydney (BESydney).
All three reports indicated the upward demand trends and staggering financial potential to sellers. Right down to the estimate average spend per delegate per day. For example, BESydney’s report found that the incentive events are the most lucrative segment of the business events market, with international incentive delegate expenditure on average 6.5 times more than holiday visitor spending; which is AU$974 compared to AU$151.
At a IMEX Frankfurt (20 May 2015) press conference, BESydney CEO Lyn Lewis-Smith commented, “We’ve seen 20 per cent year-on-year growth over the past decade in the value of events secured from Asia and this market now accounts for almost half of the business we secure and deliver each year.”
Why incentive travel?
According to Selina Chavry, regional director-Asia, Pacific World, “incentive programme is effective at improving motivation, boosting performance and increasing a company’s bottom line. It can also have a positive impact on negative attitudes that adversely affect achievement of work goals and increasing businesses potential. Research has concluded that incentive travel programmes have a strong impact on not only individual motivation, retention and performance, but also on organizational culture and business results. It is also evident that it aids in the retention of top performers in a company.”
“Roughly half of businesses in the US use incentive travel to motivate their sales teams, channel partners, or employees. These businesses understand that the travel provides the recognition, camaraderie, memorability and engagement that typical cash bonuses cannot” said Melissa Van Dyke, president, the Incentive Research Foundation. One of the 10 trends in the IRF research is the CEO’s need to attract and retain talent as they are more talent leaving the job market over the number joining it. 81 percent of CEO’s surveyed said that they were concentrated on talent. 91 percent expressed that they are changing their strategies for attracting and retaining talent.
Are incentivising and rewarding really that effective? Will staff continue to perform without being incentivised? Thomas Wai, director, Asia Pacific, Talent Plus, Inc. explained that the best leaders, Talent Plus has studied, take an individualised approach to recognition. They know that, for instance, some will be motivated by an effective programme whilst others by having more autonomy at work. So, it is important for leaders to invest their time and effort in getting to know their people and their talents so well that they know how to reward them.
Wai suggested for leaders to spend at least 50 percent of their time in people-related matters because leadership is a people job. Leaders should pay astute attention to the most valuable resource – the people. First invest in the people who have the potential to lead and give them the opportunity to lead themselves and the organisation. When Talent Plus work with senior leaders, the company found that the most scientific and effective way is to study what makes successful people, successful. From there, derive a list of characteristics and objectively evaluate if the new comer has those qualities to fit into the culture – qualities that are not just the competencies fit, but their leadership, character and personality fit.
In this issue’s Talent and Mentor section on page 36, Andrew Chan suggested ways to incentivise and reward the millennials.
Incentive travel takes new form through design
With delegates’ rising expectations largely due to more affordable travel opportunities and the abundance of information available on the Internet, design plays a leading role in delivering successful incentive programmes.
To get an incentive travel budget signed off, more senior executives are wanting to see educational components added into the programme. Chavry explained, “The programmes are beginning to evolve, placing greater emphasis on experiential elements to their programmes, as well as year-long engagement and motivation. It’s about what will make the trip feel like a personal experience versus one that fits all. Budgets are still a deciding factor for most clients and demand for more genuine and local experience is evident. To maximise the benefit of an incentive programme, opportunities must be created for top performers to network and collaborate with key management and other top performers.”
BESydney looked into programme components that engaged the participants and some findings were:
• Views of cultural activities.
• Respondents were most satisfied with their visit to museums and galleries, historical and heritage sites, monuments, and zoos and aquariums.
• Overwhelmingly respondents indicated that they are seeking experiences in which they can actively participate, rather than be a spectator. Respondents would like to experience more cultural activities such as: local culture; attending a performance in the Opera House; Indigenous Australian culture; and outdoor activities.
The IRF named “self-defining experiences” as the number five business driver in their research citing today’s planners as being aware that incentive travel experiences go much deeper than excursions and entertaining speakers. Incentive participants under 35 years old want the unusual, unattainable or exciting self-defining experiences.
The SITE index annual study 2014 showed that opulence is replaced by Corporate Social Responsibility (CSR). Delegates are wanting to “do the right thing” for the environment. Venues and hotels have introduced initiatives like “farm to plate” menus to carbon offset besides getting green accreditation. Now, they are attaining respectable certification for their efforts.
Even hotels are doing their part in the design aspect. Trained in architecture, Liu Wen Li, senior vice president, Design and Technical Services, Asia Pacific, Starwood Hotels & Resorts, provided Biz Events Asia some insights in an interview conducted during Starwood APAC Customer Advisory Board meeting held at The Westin Xian. Liu said: “We believe that people want a better way to experience the world”. Liu expressed that each of the Starwood brand has its own identity. For example, The Westin has 6 pillars of wellness namely, sleep well, eat well, move well, feel well, work well and play well. These pillars are reflected throughout the design of each Westin hotel.
It is beyond bricks and mortar. Liu philosophically said “it is important that the customer can sense the soul of the hotel - that is the real difference”. Other than historic and social knowledge of the hotel location, contextualising is a crucial element of the design progress. Starwood introduced Starlab, a place that brings together digital, design and luxury brand teams. Activities include designing the layout of the hotel based on research to the creation of fabrics that express the essence of a hotel brand. Starlab is focused on innovations that allow high tech meet high touch through a new working style that balances “we” and “me”. When asked how else hotels can stay ahead of competition, Liu responded, “The new battle field is the mind of your customers as the boundaries are just in your mind”.
It’s no secret
There are still sensitivity around how incentive travel is perceived by external parties, the incentive programs must be marketed effectively to potential performers. SITE reported the percentage breakdown of social media channels companies and intermediaries used to market incentive programs - 76 percent uses LinkedIn, 68 percent Facebook and 61 percent twitter.
“A company which is highly dependent on the performance of its sales force to drive its business goals would have in place comprehensive incentive programmes. AIA Singapore is no exception particularly as it is the only insurer with the largest agency force of more than 4,200 agents” said Joanna Ong-Ash, Head, Corporate & Marketing Communications - CMO Office, AIA Singapore Private Limited.
Fundamentally, effective communications strategy will always be aligned to business objectives and results and a communication strategy is critical to a successful incentive travel program. Ong-Ash indicated the fundamentals include:
• An integrated effort across multiple communications channels and platforms.
• Consistent messaging aligned with our brand values, and encourages people to become brand advocates continuous engagement with the sales force to drum greater excitement that will eventually lead to the company’s successful sales outcomes.
Ong-Ash also revealed that AIA Singapore’s communications strategy is planned before the start of each financial year. Incentive programmes tailored for AIA financial services consultants are focused on creating messages and activities that build:
Awareness
• All agency location Development Managers (BDMs) will first be briefed about the campaign, so that all are aligned to the activities planned to create greater excitement around the campaign.
• The messaging would be tiered. The first tier of messaging would create excitement around the destination and this could include quizzes about the destination as well as roadshows themed to the destination. The second tier of messaging would be focused on creating awareness about the mechanics of the campaign.
• BDMs at each location could also do regular walkabouts to all the agency offices with little souvenirs which theme the campaign to ignite the curiosity and anticipation on what’s coming up for the campaign challenge.
• Teasers and quizzes at least 2 to 3 weeks before the start of the campaigns to get the agents guessing the destination they could be jet-setting to, should they qualify for the incentive. They could even be given a prize of another week of extension at the destination should they qualify.
• The AIA buildings would also be ‘dressed-up’ with ‘ornaments’ such as posters, banners, back-drops, standees and other merchandise that could serve to remind the sales force about the campaign.
Engagement
• Talking points on the campaign would also be crafted, so that the chief executive officer (CEO) and chief agency officer (CAO) could speak about the campaign during any agency events, and meetings.
• Pledge boards at agency locations may be used where names of agents who have qualified for the incentive trip would be put up to build even greater excitement about the campaign.
To win the incentive travel business, sellers need to rise above the occasion and pull out all stops whilst chasing the leads. Sellers must remember that it is really not just about the product. Winning the business is a true testament of the sellers’ ability to place the clients’ objectives and interest above their own. It is also about the ability to deliver consistent customer service before and after the sale. Most importantly, knowing the direct and indirect clients’ demographic, cultural and behaviourial details will give sellers the upper hand.
Share your thoughts