The Incentive is Not Fear

Travel is dead! Incentive programs are dead! Stay in the office and work! Keep your head down!

We heard these proclamations following 9/11 and the economic crash at the beginning of this decade. But you know what? Our clients kept their event programs, continued to travel and stayed the course with incentives.

Fast forward to the fall of 2008. The beginning of this latest recession echoed the same fearful statements we heard nearly 10 years ago. And our clients continue to stay the course with their programs. Our incentive clients are traveling to Mexico, New York, Spain and other destinations. Our corporate meeting and event clients are heading to New Orleans, Florida, Boston. The point is, they refuse to be swayed by the negative sentiment that AIG and others put on the industry because they believe in the value of their programs – and the ROI proves that their programs work. They work to drive revenue, foster collaboration, meet face-to-face and reward hard-working employees. They also work to stimulate the economy by hosting goal-focused events in various destinations.

As businesses mark the one-year anniversary of the current economic crisis, decision-makers who are still in “scared” mode must ask themselves a simple question: Are we ready to shift from cost management mode to growth mode?

A new study by research firm Oxford Economics addresses these issues and makes a very strong case for the power of business travel.

The study finds that for every dollar invested in business travel, businesses benefit from an average $12.50 in increased revenue and $3.80 in new profits. Where else can companies find that kind of return? Likewise, the data shows that a 10 percent increase in business travel spending will increase U.S. GDP by between 1.5 and 2.8 percent. We need that, right?

According to the study, a sure way to limit business growth potential is to indiscriminately cut corporate travel. For instance, executives who were surveyed estimated that 28 percent of their business is lost without in-person meetings. Working backwards is not the answer.

Claims that virtual meetings and teleconferences are a good substitute for in-person meetings turn out to be off the mark. Eighty-five percent of corporate executives perceive web meetings and teleconferences to be less effective than in-person meetings with prospective customers, and 63 percent believe virtual meetings to be less effective than in-person meetings with current customers.

Finally, the study contradicts the rhetoric we have heard that describes incentive travel for top employees as wasteful junkets. In fact, according to the research, companies would have to pay those employees eight percent more per year to achieve the same level of motivation. Thus, according to the research, incentive trips are often a cost-saving measure. We would go so far as to say incentive trips are economy-stimulating measures.

Best of all, the study helps answer the question: How do you attach an ROI to a sales trip, a trade show or an award to a high-performing employee? 

Travel is alive! Incentive programs work! Get on the road and see your customers, teams and partners! Lift your head up! Our clients are succeeding – we work with the biggest brands in the world on their global events, corporate meetings and incentive programs, so we see this success on a firsthand basis – because they remain committed to sound business practices that work to generate revenue, sell products and services, motivate and reward high-performing staff, and spend smartly on programs that work.

We’re happy to share more about our programs if you’d like to learn how meetings, events and incentive programs can work for your organization. And we want to hear how these valuable marketing vehicles have worked for you.

Read an executive summary of The Return on Investment of U.S. Business Travel here.

And read the full study here.

Finally, here’s a great SlideShare presentation, courtesy of US Travel Association: Business Travel ROI Study: http://tinyurl.com/yjex7al.

(Thanks to my friends and partners at the U.S. Travel Association and DiscoverAmerica.com, as well as the great research team at Oxford Economics, for this invaluable piece of research.)

Mythbusters

We are a communications firm, so we love the media. But let’s face it, online, offline, in print or on the airwaves, we are bombarded with dire reports: “Swine flu is creating a panic! We’re in a recession!” If this wasn’t enough, we keep hearing about the endangered local media, most notably, the imminent demise of The Boston Globe and how that is going to forever change the way we run our business and service our clients. Since we’re in the business of making sure messages are accurately conveyed, this month, we’re using this space to do some “fact-checking” of our own.
 
Myth #1: If The Globe shuts down, Boston PR firms are in trouble.
If The Boston Globe were to shut down–which thankfully seems less likely today–it will indeed be a sad day for the entire region. We grew up reading it, we love opening it each morning, it is an important institution and we have great friends at The Globe. As citizens and communications professionals, we want Boston to be a vibrant, two-paper city.

 

We hope and trust that The Globe will emerge from this difficult time refocused and refinanced, but regional media relations and press coverage is just one element of the work we do for our clients: social media, vertical marketing, brand management, enrollment marketing, national and international public relations, relationship marketing and event marketing are equally, if not more, important to what we do every day at Castle; our success stems from a deep understanding of trends and cycles, as well as our ability to anticipate change and maximize opportunities for our clients in emerging communications channels.
 
Myth #2: Business people are not traveling.
Contrary to the common misconception, we are finding that corporations are not significantly cutting back on their corporate event agendas: they are responding positively to President Obama’s very public call for continued support of corporate events and business travel. What we do see, and what we support, is a trend away from extravagance and toward greater attention on corporate events as efficient vehicles for brand enhancement, strategic messaging and for incenting sales channels. This has always been our focus at Castle, and what has differentiated our approach from the beginning.

 

When we say that we are not “party planners,” but rather a marketing and messaging company, we mean that our objective is designing and delivering multi-tiered corporate events, which effectively and efficiently position the brand and support strategic marketing objectives. In the past few months we have managed events in Boston, as well as in Italy, Costa Rica, Napa, Portugal and yes, Mexico (without incident). With clear messaging, specific goals and responsible budgeting, there is still no better way to directly reach your audience. Incentive travel programs, done properly, help companies achieve ROI and are measurable, quantifiable motivators for success.    

 

We hope that the worst has passed, but if it hasn’t, if recessionary factors linger longer, we remain committed to working hard everyday to bring tangible, measurable value to our clients.