What's in... what's
out? What's hot... what's not?
by Bob Vitagliano, CITE
These seem to be the most asked questions in the incentive industry.
It is almost as if success depended on knowing these great truths.
While I admit to the existence of trends, I'm not so sure that
they reflect our society and its wants as much as they do the
ideas of the self-appointed trend-makers – those who have
a product to market and those who have an audience to whom they
must prove their credentials. Let me share with you what I know
about the incentive industry in the USA. Living and working here,
I speak from a distinctly American point of view.
The Survey
The Incentive Federation (www.incentivecentral.org),
an umbrella group for the major incentive associations in the
United States, just published the findings of the latest phase
in their on-going research into the incentive industry. While
it doesn't precisely address the in/out; hot/not questions, it
tells us a great deal about what drives our US industry.
Good news is that the US incentive industry is worth US$26.9 billion
– up 18 per cent since 1996. Incentive travel accounts for
$9.8 billion of that amount. Bad news (or should I say the challenge)
is that only 32 per cent of US companies use non-cash incentives.
While still low, that is up from 26 per cent in 1996.
That gives us some certifiable trends: the incentive industry
(and incentive travel) is growing in the US and the number of
companies using incentives has also been on an upward climb.
The Economy
Enter the villain. The Incentive Federation's survey was completed
before the impact of the current down market and its effect on
the economy. It is now quite clear that these influences have
had their effect on the incentive business. Unfortunately, corporations
fail to see that there is greater need to stimulate and reward
productive employees during down times. Instead, they fear the
reactions of stockholders and the general public who might look
askance at rewarding outstanding performance while having to terminate
other employees.
Practitioners in the incentive market are now starting to report
cancellations, postponements, and budget cuts as a result of economic
conditions. Regrettably, this is likely to impact the destinations
selected for incentive programmes. Most companies will choose
to remain in the US or to venture no further than the Caribbean,
Mexico, or Canada. It is difficult to predict how long this will
last – the market is rallying as I write this but it is still
early in the day.
Return on Investment
Long before this disturbing change in the economy, knowledgeable
US companies were asking to see a measurable return on investment
(ROI) for both incentives and meetings, and that is a good sign
for our industry. It underscores the fact that corporations that
use incentive programmes and meetings understand their value as
a business tool and their ability to generate bottom line profits.
It also creates a system for practitioners in the incentive industry
to convince non-users of the measurable value of incentives.
The proliferation of on-line fulfillment sources has also made
incentive companies more aware of the need to prove the added
value of their services. With this in mind, demonstrating the
return on investment of incentive programmes and meetings –
presented together with the other benefits of their services –
validates their very existence.
What is hot!
While I may be skeptical of so-called trends, there are some that
can be proven to be real. For example, a January 2001 survey (www.
meetingsnet.com) showed that the number of US companies using
non-sales incentives has climbed slowly but steadily each year
with 41 per cent of survey respondents using them in 1997 and
51 per cent in 2000. This reflects the increase in team motivation
and recognition programmes. Last year, 42 per cent of survey respondents
reported using such programmes. The focus on team-oriented programmes
reflects changes in management and organizational philosophies,
and it has a definite effect on the design of options in the fulfillment
of incentive travel programmes.
The same survey reported that the use of individual incentive
travel climbed from 37 per cent of survey respondents in 1999
to 53 per cent in 2000, continuing the trend of recent years.
The separation between incentive programmes and meetings has blurred
over the last decade. 72 per cent of survey respondents reported
that they include some amount of meeting time in their programmes.
Much of this may be the result of US laws regarding the taxability
of meetings and incentives but it makes good sense to capitalize
on the opportunity to formally communicate with a company's top
producers during a group incentive travel programme.
There is also reported growth in experiential incentive programmes.
This all-inclusive category runs the gamut from hard adventure
to arts and crafts. Whatever the level of adventure, qualifiers
are demanding more participatory experiences and US companies
are offering the options to satisfy them.
The incentive industry reflects the ever-changing environment
in which our qualifiers live. It is susceptible to social, economic,
and political influences. In our industry, it is not really about
what's hot and what's not. To enjoy continued success in this
business one must keep aware of the changes and influences at
higher social and political levels – and worry less about
what's in and what's out.
As printed in Meeting Planner magazine, published in the
United Kingdom.
---
Bob Vitagliano, CITE is President of V Associates, an incentive
marketing consulting firm, and is a partner in fourCE.org. He
is also the former EVP/CEO of the Society of Incentive & Travel
Executives. You can reach him at vassociates@home.com
or at info@fourCE.org.
|
