Fargo = Fail

Castle co-founder Wendy Spivak has been building large-scale, successful incentive programs for companies and their sales forces for two decades. But she’s never planned an incentive to Fargo. Read below for her thoughts on a company that recently has traveled to Fargo — in December.

I just read an article about a sales incentive program that failed.  And I felt very conflicted—impressed by the publicity it garnered and by the way the sales team made the best of it, but on the other hand….IT FAILED TO ACHIEVE ITS GOALS.

Here’s what happened: a candy company created a sales incentive program to motivate its sales team to achieve certain goals.  If they achieved those goals, they would win a company-paid trip to Hawaii.  If not, they were going to Fargo, North Dakota.  Definitely clever.  BUT, they didn’t achieve, and they went to North Dakota.  The article includes images of the employees bundled up and freezing.  They made the best of it—wearing company-logo’d hats, they had a lot of winter team-building activities planned, and they handed out care packages of the company’s candy to the locals.

I LIKE the ingenuity, the opportunity to market and team-build, and create a memorable experience.

But again, THEY DID NOT MEET THEIR GOALS.  So while there was some goodwill and esprit de corps and even a little marketing, the incentive did not have the intended impact on the bottom line.

At Castle, we plan, manage and market sales incentive programs for many leading national and international organizations, across a number of industries.  And we always start with the GOAL in mind—not where do you want to go, what will make people happy, but “what numbers are you trying to achieve,” and then we figure out how to hit those numbers.  Maybe in the case of this candy company, there were some key elements overlooked.  Perhaps they didn’t fully market the program during its life span, to keep momentum and enthusiasm high, and ensure people’s eyes were on the prize (the good prize, not the consolation prize).  Maybe the numbers were unrealistic.  Maybe the program didn’t have time to “bake.”  But something went wrong.

So I remain conflicted.  As a professional in this industry, I appreciate the creativity involved, and as an employer, I appreciate the employee experience the company created.  But as a businessperson who takes my clients’ goals and ROI very seriously, I don’t think that’s enough to make this more than an interesting story about failure.

What do you think? Is a reward for a job kind of well done worthwhile? How do incentivize your teams?

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.)