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The Tug of Incentive Travel

Feb 20, 2017

Written by: Mary MacGregor
(View Author Bio)

As reinforced by popular business books like Nudge by Richard Thaler and Predictably Irrational by Dan Ariely, there is more to economics than the calculated, unemotional way money shapes our society. Many of the choices we make are based on the principles of behavioural economics, which focus on how we make decisions and why we work harder to attain some things more than others. It comes down to our emotional selves versus our rational selves or simply put — heart versus head.

Closing the say-do gap

The say-do gap reinforces the notion that preferences are not rational. People say one thing and do another. For example, you may launch an incentive program at your company and your sales force says “Show me the money.” That’s the rational response; money is seemingly the most motivating reward because it’s the most rational choice and you can use money for anything. In reality, people will stretch further for aspirational rewards. Research supports that your reps will be more motivated by a travel experience and will work harder to earn it. What people say and what people do are two different things. Focus on what will deliver the best results in the end.

Justifiability

There are certain things we simply won’t spend our own money on, but we’re happy to accept them as a reward – what better way to eliminate the guilt we may feel using our money on a want versus a need. A relaxing trip to Hawaii or adventurous trek through Maccu Picchu is more enjoyable because the experience is the reward. Research conducted by Dr. Ran Kivetz, professor at Columbia Business School, reinforces that luxuries tend to invoke guilt. Studies confirm that people have a problem with indulgence. However, if they can justify the award based on hard work, then it’s acceptable and appreciated. In fact, multiple research studies show that people work harder to earn an experience than they work for cash because they’ve earned the right to indulge! Effort is related to the preference for reward types, specifically in work-related situations. The more effort exerted, the more we prefer an experience we might not give ourselves. Golf in Galway or snorkelling in Stingray City captures mindshare, making it worth the extra focus and time.

Affective reaction

When your channel or employees are deciding whether to exert additional effort to earn an incentive, they predict how happy they think they will be to receive that award. In studies by Dr. Victoria Shaffer and Dr. Hal Arkes, people display a stronger emotional response to non-monetary rewards. Travel experiences are thought about more frequently than cash and the amount employees think about an incentive is positively correlated with their performance.

It comes down to this: some rewards are better than others.

Vivid experiences are remembered longer. It could be the sense of awe the first time you see an iconic city skyline you have researched online or learned about on your favourite travel show. Whether it takes place on another continent or in your backyard, the more unique the experience is, the more it is remembered and shared. You can simply walk through the rainforest or get your adrenaline going by zip lining over it. You might offer an incredible dining experience while enjoying the scenery as you ride the West Highland Railway or take to the water and kayak across borders on Lake Constance. Local experiences that have a unique theme or twist also deliver the same results – biking the Golden Gate Bridge or hitting the track at the Indy 500 will leave a lasting impression. Most likely you’ll be sharing your trip with your family and friends through pictures on Facebook, blog posts and by video chatting with an envious view in the background. It’s a very social reward. Unique experiences are re-consumptive. Though you may have returned from your trip five days, weeks or years ago, you continue to share the experience with others. The memories you make stretch further than the cash reward that went in the general bank account to pay everyday bills. The images conjured before the travel experience and the stories shared after make a travel incentive the ultimate reward for strong performance. When you plan your next sales incentive, apply the knowledge you have around behavioural economics to offer a truly unique experience that will deliver results.

Mary MacGregor

Vice President – Event Solutions
Employee

Mary MacGregor joined BI WORLDWIDE (BIW) in January of 2013 as Corporate Vice President – Event Solutions and is responsible for all operating areas of the BIW Event Solutions Group including purchasing, design, delivery, group air, individual incentive travel, on site operations, technology, communications and merchandise.She leads a team of over 175 industry professionals who deliver memorable experiences and measurable results for their customers.

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