Measuring the ROI on Incentive Travel

by Ty Collins on April 5, 2020 in Incentive Travel

When measuring the effectiveness of their incentive travel program, many company leaders struggle with how to prove they have recouped their investment. Higher profits are usually the primary goal and the easiest to determine. However, quantifying other important outcomes, such as engagement and motivation of the entire team, is more elusive yet critical to gauging ROI.

Measuring Incentive Travel ROI to Drive Engagement

The Incentive Travel Industry Index found that 70% of participants believe their program is highly successful or somewhat effective in motivating employees to achieve company objectives. However, only 2 in 10 programs formally measure how their investment is paying off.

Companies that do not track this data are shutting the door on a valuable opportunity to make program improvements that further drive great work and higher profits. Sales leaders can use this information to understand if the incentives are actually motivating their teams. It is also valuable to human resources teams for boosting recruitment of top-tier talent, streamlining training and encouraging employee engagement.

For new employees, the opportunity to earn exciting bonuses and travel opportunities sounds amazing, but it may come across as too good to be true. Trust is built through transparency.

Inclusive Incentive Travel Programs Boost Company Morale

Incentive travel programs are a driving force in motivating employees to exceed goals, but companies often approach these rewards with a limited focus. The most successful programs do not follow a one-size-fits-all model. Instead, they recognize that different employee segments, such as managers and rookies, within the same department need varying benchmarks.

The IRF 2020 Trends Report found that running multiple or tiered programs that had broad reach are the most impactful on employee engagement and motivation. When incremental goals are reached, employees are rewarded with gift cards, then merchandise, then local experiences and finally the coveted incentive trip for the highest performers.

They also look for ways to inspire positive employee behaviors. Along with attaining sales goals, you could acknowledge team members for enrolling in training programs, decreased staff turnover, gains in customer acquisition or impact of collaborative efforts.

Strengthen Incentive Travel ROI Through Evaluation

As the incentive team evaluates the program, consider these measurement questions:

  • Are all employees motivated by the incentive to achieve higher results?
    To answer this question, you must survey your entire staff on their views about the program. When you only ask the high achievers, you will never understand what barriers are stopping more people from participating. Look for ways to expand reward tiers to reinforce behaviors that contribute to higher sales.
  • Has the program become a private club?
    Examine who has attended the trip every year. If it is always the same people, then the program has become an exclusive club that employees can’t join or no longer want to. Decision makers need to evaluate if benchmarks are too high and implement incremental incentives. This approach rewards employees for all the effort that they give throughout the year. It also builds trust with new team members and serves as a motivator for achieving the next goal.
  • Can we expand our participants?
    Participation in the program should not be limited to an exclusive group, such as senior managers or the sales team only. Each department has outcome-based goals that are easily measurable and worthy of recognition. For example, process improvements in the accounts receivable department can reduce inventory turnover while speeding up shipment dates and invoice payment timeframes.

    Partners are also excited to rise to the challenge. In one case tracked by the Incentive Research Foundation, a dealership rewards program generated enough sales to cover the cost of the program plus the salesforce program and still deliver a $3.5 million profit. This resulted in an ROI of 112.5%.
  • Does the offered experience match the extra effort to achieve it?
    If you are going to ask employees to go above and beyond to exceed difficult goals, then you must offer a worthwhile prize. The most effective incentive travel programs motivate employees by offering an exciting, memorable experience.
  • Is the program producing higher results?
    The entire point of measuring incentive travel ROI is to prove that your program is successful. The evaluation process must include looking at how the program’s design drives desired behaviors to produce the results you want across the entire organization.

Survey Employees to Effectively Measure ROI

There are many methods for collecting quantifiable data, but employee feedback is your richest source for measuring proof. When you ask the right questions, employee surveys generate a goldmine of quality information that can drive smart decisions. The key is to make sure the questions match your objectives. Your priorities are to pinpoint what people liked about the program and how next year’s experience can improve.

To understand the effectiveness of the destination and trip inclusions, you must survey earners at the end of the event. Along with requesting participants to rate their experience on a scale, also ask them to write a few sentences on their favorite memory and one thing they would love to see added to next year’s program. These types of open-ended questions generate deeper responses.

Understanding the effectiveness of the program’s earning structure requires surveying all employees, including non-participants. Seek out answers to ways that you can improve the earning period and feedback on what rewards motivate all the members of your team.