Corporate Incentive Travel - 3 Reasons Why Shrinks Say It's Better Than Cash
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Transcript of Corporate Incentive Travel - 3 Reasons Why Shrinks Say It's Better Than Cash
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Corporate Incentive Travel
3 Reasons Why Shrinks Say It’s Better Than Cash
Corey Trueman, Director Corporate [email protected]
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So you’re looking to motivate a team,
reward them for a job well done,
or motivate them to hit a new quota…
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What’s the best way?
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Easiest way…
Employee = Dollar Amount = Reward
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Right?
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Wrong.
According to recent studies inbehavioral economics andhuman psychology
Smart dudeslike this guy
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Here’s three reasons why an incentive travel experienceis better than just cash.
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Reason 1People Don’t Like To
Feel Guilty AboutSpending Money
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People experience a "pain of paying," which lowers your excitement at time of purchase. - Drazen Prelec and George Loewenstein, behavioral economists
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So that $500 bonus David was looking forward to spending…
doesn’t actually FEEL so good when he gets to the store to use it on that new jacket.
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This leads to a guilt factor which lowers the motivation to spend.
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In studies where thousands of people had to choose between a luxury item (trip, jewelry, electronics, ect) and cash of equal or greater value…
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a large part of the group (between 13% and 39%)chose the luxury itemover cash
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"If I went with the cash, I’d spend it on something I really need
instead of something I ENJOY.”
- Respondent
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“Now I can pamper myselfand not have to
spend the cash on groceries.”
- Respondent
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Here’s the point:
If you don’t make your incentive program relevant and MOTIVATING, like using a travel incentive experience…
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Your $500 bonus to your sales star David for hitting quota just ended up being spent on pizza, beer and cereal.
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And this leads to the 2nd reason why incentive trips are better than cash…
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Reason 2Cash Is Quickly
Forgotten
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"How did you spend your last cash reward?"
Didn't rememberNever got a bonusBought giftHome itemSaved it
Source: Wirthlin Worldwide Research
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Huh?This is a BIG reason why most cash incentive pale in comparison totravel incentive programs.
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Your team WILL remember a week at the beach, under the sun, sipping a Pina Colada…
or even a nice weekend retreat with the spouse at one of the local 5 star properties.
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Here’s the takeaway:
Remember David’s $500 cash bonus you were going to give him?
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Instead, you could have taken that $500 and paid for a weekend stay at a nice 5 star hotel locally.
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Crank it up a notch to $1000 - $5000 bonus, and you could send him and his whole family to the Caribbean for a week for an all inclusive resort.
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The memories, pictures on his cubicle walls, Facebook posts, will last much longer than last weeks groceries.
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Whenever he talks about that trip, he’ll remember exactly WHY he was there (because he’s a sales rock star)
…and WHO sent him(the company he’s now more loyal to… yours).
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And this brings us to our LAST reason why Incentive travel is better than cash…
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Reason 3People Will WorkHarder For Travel
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Ran Kivetz, the Sidney Taurel Associate Professor of Marketing at Columbia University Graduate School of Business recently revealed something fascinating about human psychology and motivation…
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People are wired to commit in advance to a luxury item, like a business incentive travel program, more so than a necessity – like groceries – when the conditions to get the reward are increased.
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This means that if you raise the quota, your team is more likely to WANT to hit it if the reward is a non-essential payout(i.e, something instead of cash,like an incentive trip)
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In two different studies people were given the choice between a program with a one hour facial or massage with a retail value of $70, or they could join a program that gave them a $70 gift certificate to a local grocery store.
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Regardless of the study, when the requirements to get the reward were LOW, a higher percentage of people opted for the grocery certificate program.
“I don’t have to work hard for this”
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When the requirements were a little tougher, they shifted to the luxury offer rather than the groceries.
“I’ll put in a littleovertime to get this!”
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So here’s the final takeway:
If you want mediocre response and lackluster effort to hit a new quota, throw cash around.
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But if you want to get some REAL deals in the door, use that same money and make it an incentive travel experience.
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For more free ideas download a free copy of the special report…
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