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Three for the Road
July 01, 2006
For these three sales incentive programs, competition is the journey and the reward is the destination.
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| Transamerica Worksite Marketing sent its top-producing independent insurance agents to Ireland. |
By Leo Jakobson
Ever since the airline boom of the 1960s made commercial flight accessible to the non-wealthy, companies have been motivating employees with the promise of the vacation of a lifetime. And with good reason.
While there are other ways to motivate salespeople to become top performers, an incentive trip is particularly effective, for two reasons. First, travel offers sales managers and incentive planners a way to provide an award that is both memorable and unique, something the average person would not or could not do on his or her own. Second, and perhaps just as important, dangling a trip, open only to a few top performers, spurs the competitive streak that runs deep and wide in most salespeople—it's not just that the participants win, it's that they beat their peers to do it. Indeed, tickling that competitive itch was a tactic mentioned by all three of the corporate incentive managers whose programs we explore in the following pages.
Those programs cover three very different industries—high tech, hospitality and insurance—and three different areas for drawing participants—field sales, in-house and channel sales forces—but they have one thing in common: They all produced excellent results.
A New Company Learns Old Tricks
Ten years ago, neither F5 Networks nor its business—application delivery networking, which we'll explain in a moment—existed. In 2005, the Seattle–based high-tech firm reported revenue of $281.4 million, on 64 percent growth in sales over 2004.
F5's business is to make applications secure, fast and available, says Mary Chenaur, global event manager of F5. Practically, that means European low-cost airline easyJet used F5's products last year to ensure its online ticket buyers are directed to a server that is not too busy, while avoiding Internet traffic jams that could leave customers unable to reach its Web site.
F5's main sales incentive program, the Circle of Excellence, has grown as dramatically as its revenue, notes Scott Siewert, region manager of Atlanta–based incentive house USMotivation; from fewer than 30 qualifiers in 2001, the inaugural year, the program has expanded to more than 100 this year. Qualifiers are drawn from four groups: field sales reps, inside sales reps, field systems engineers and the vice presidents, directors and sales managers, Chenaur says. Two criteria must be met: making an overall sales quota (set at 100 to 110 percent of the rep's quota, depending on its size) and hitting 100 percent of a separate quota for a strategic product.
The senior vice president of sales announces the trip's destination, along with the next year's goals, at the annual sales meeting in late October. After that, the trip is hyped via e-mail.
"After the first quarter's numbers come in, [the sales staff] gets an e-mail blast that highlights the program and provides links to where they are in the rankings," says Chenaur. "We publicize those who are at 85 percent and above. It is important for them to see where they are in relation to others. Salespeople are very competitive."
F5 is an international company, with 65 percent of this year's qualifiers from outside North America. At least some qualifiers require an extra travel day, regardless of the destination. That, along with a preference for beach and sun destinations, takes F5 to centrally located Hawaii every other year.
The Circle of Excellence trip typically runs Wednesday through Sunday, beginning with an evening reception and dinner. Spouses are included, and qualifiers are allowed to bring children on the trip, at their own expense. If they do, the kids are welcome at the first night's dinner party.
For the 2005 fiscal year, Circle of Excellence winners went to the Hyatt Regency Aruba Resort & Casino. The first night is generally a meet-and-greet event with minimal speech-making and a relatively small budget, Chenaur says, although food is top-of-the-line. "We want our attendees to get white-glove service," throughout the trip, she adds. "We want them to feel as special as they can."
The trip began with a bit of anxiety, Chenaur admits, as the possibility of rain forced her to move the dinner, planned as an al fresco, poolside event, inside. "We had the reception outside and then moved in for dinner," Chenaur says. "But the hotel did such a good job, the attendees did not know there was a change."
The schedule on Thursday and Friday is largely identical, with a choice of events in the morning, free time in the afternoon and a 5:30 p.m. cocktail reception, after which attendees go their own way for dinner, supplemented by a cash allowance. In Aruba, participants could choose between a snorkeling cruise or Jeep road rally on Thursday. Friday had more choices, including a trip on the Atlantis VI submarine to Barcadera reef, an ATV rally, deep-sea fishing, windsurfing, golf at the Robert Trent Jones Jr.–designed Tierra del Sol golf course or spa treatments at the Mandara Spa at Marriott's Aruba Surf Club, which Chenaur says is the best spa on the island. "We find [attendees] like some time off with their spouse," Chenaur says. "In the past we've done dine-arounds, but they like to meet up quickly and then go off on their own for dinner."
Saturday night is the big blowout. In Aruba, it was a carnival-themed dinner dance set on the beach of the Hyatt, with guests wearing their Friday-night room gifts: feather masks and colored boas. Brief speeches by the executive vice president of sales and the CEO are the only business in a night of music and food. No children are allowed. "The food, the band, the weather were all fantastic," Chenaur says. "This was one of the best [trips] in company history. People are still talking about it."
If the Circle of Excellence trip was a success, so was the overall program. Aside from F5's phenomenal sales growth, another way to measure the success of the open-ended incentive is the number of qualifiers. "We thought we'd have sixty-five this year," Chenaur says. "We ended up with more than one hundred."
How Do You Impress Hoteliers?
Planning an incentive trip for salespeople in the hotel industry is no easy task. But it does make it a lot easier to select a property, admits Anne Massey, vice president of global sales support at Starwood Hotels & Resorts Worldwide.
In May 2006, the White Plains, N.Y.– based company took 473 of its top performers and their spouses to Argentina. An elite group of 35 couples arrived four days early for a special program in Iguazú National Park, a UNESCO World Heritage Site, before flying them on to meet the rest of the group for another four days in Buenos Aires.
Participants are drawn from three groups: the company's global sales force, individual hotels' sales associates and sales managers. "We focused on goal setting," says Massey, who adds that careful planning ahead is vital in this regard. "You must be accurate if you are looking a whole year ahead." A global committee studies the various market segments and sales teams, she explains, looking at historical data and what divisions and individual hotels want to achieve.
To qualify, individual salespeople and sales managers' teams had to reach 130 percent of their revenue goals. In addition, the top 5 percent of the qualifiers, plus an additional 2.5 percent of winners who also met separate goals set by individual divisions, were invited on the elite trip. About 3,000 people worldwide were eligible.
Starwood announces the destination at divisional sales rallies, which are all held at the end of the year. The trip takes place the following spring, after a year-long program. A communication plan is mapped out—2005's was Goal Argentina, built around a soccer theme, with teaser gifts like mini soccer balls and related books. A Web site goes online around June, listing the "on-pacers," Massey says. "We get a little rivalry going." E-mail blasts give her the flexibility to keep attention focused and spur people who are close to qualifying. A few weeks after the year ends, invites start going out.
The elite group and their spouses arrived at the Sheraton Internacional Iguazú Resort by the morning of Saturday, May 6. An informal lunch was followed by a private guided walking tour of the nearest of the 275 waterfalls in the park. A welcome cocktail reception with divisional presidents and senior vice president of global sales Christie Hicks was followed by an evening trek to the falls where champagne was served by torchlight. That was followed in turn by a spa night, where attendees were offered mini-treatments like a short massage or a tea ceremony.
During the next two days, guests could relax on their own or participate in activities like an excursion to Devil's Throat, the 269-foot-tall granddaddy of the falls, where staffers met participants with drinks and towels. Other options were a ferry trip to a nearby island or a nature ride in the jungle. On Monday night, there was a final dinner held in tree houses high above the jungle floor. Tuesday, the elite group's participants chose between a spa day, an excursion to the Brazilian side of the falls or from an eco-adventure activity like a canopy tour of the jungle, ATV ride or bicycle tour, before boarding a charter flight to Buenos Aires.
The main Goal Argentina trip began Tuesday afternoon, with separate briefings for members of the four global divisions, followed by a group dinner featuring Argentine cuisine at the Sheraton Buenos Aires Hotel. Shuttles were offered to participants who wanted to visit the riverboat casino or the city's famous nightclubs.
Over the next three days, winners chose from 17 tour options, ranging from city, shopping or museum tours to tango lessons, an Evita tour and wine tasting. On Wednesday evening, the winners broke into divisional groups for awards dinners. Thursday they enjoyed a private gaucho show and barbecue at the outdoor Operas Pampa theater, followed by a private party at the Museum Disco, a popular nightclub. Friday's farewell dinner was set in the colonial-era tunnels under the city, accompanied by a variety of entertainers, like guitarists and acrobats.
Starwood measures ROI in two ways, Massey says. The more spectacular is incremental revenue by a qualifier divided by the cost of that qualifier's trip, which averaged out between 24,000 percent and 25,000 percent in 2005. A more accurate number, she says, is to determine the cost of sales: the total cost of the trip divided by the incremental revenue generated. In 2005, the cost of sales was between 4 and 5 percent, Massey says.
Building Loyalty Among Fickle Channel Salespeople
Transamerica Worksite Marketing is part of the payroll deduction and voluntary insurance sales marketplace, using independent agents to sell the supplementary benefits that employees can opt to pay for by setting up a payroll deduction: Vision and dental care, term and group life insurance, and accident and short-term disability coverage are among its offerings.
"We are in a highly competitive marketplace," says Jeff Moore, director of marketing and creative services for Little Rock, Ark.–based Transamerica Worksite Marketing. The independent agents who sell his company's products "can mix and match products from different companies. They can compare just the lowest rates, not the quality of the products and services available."
Moore believes there are two ways to prevent this technique, which he calls "spreadsheeting." The most important is to offer a superior product and service, Moore says. Then there's the incentive trip. "When they compare us to AFLAC and AIG, the trip can help differentiate us," he says. "The producers [agents] who use our products exclusively are the most likely to qualify. You want to reward the ones who are loyal to you." Moore adds that the incentive house he works with, Newport Beach, Calif.–based Ambassadors International, "makes sure the trips we offer are above and beyond what our competitors do. I get so many cards saying 'This was the best trip I've ever been on,' from guys with two commas in their salaries."
The trip, based on an 18-month production cycle, is the "crown jewel" in the package of benefits offered to members of its Leading Producers Group, who also get benefits like stock options and fee waivers, Moore says. salespeople qualify by reaching a sales goal based on the value of business produced. For the "Rise Above—Tahiti 2006" cruise through the Polynesian islands that will depart on Sept. 16, the target was $1.5 million for master general agents, who have many agents selling under them, and $500,000 for individual agents, Moore says. One hundred to 200 of the approximately 7,500 eligible agents usually qualify, he adds. The ship's capacity has limited this trip to the top 100 agents and their guests.
The promotional campaigns begin a year out, with big mailers containing themed gifts and bits of information about the trip itinerary going out every other month, interspersed with e-mail blasts. This program's gifts included a jar of Tahitian vanilla beans and a traditional wrap skirt from the islands. The theme is always related to production and getting to the top—the previous trip, to Ireland, featured a final-night party in Dublin Castle and was themed "A Toast to the Top." To spur competition, the Tahiti trip's e-mail blasts let producers know where they stood in the top 150 . Winners received a box with a lei of flowers and their invitation.
The Regent Seven Seas' Paul Gauguin, a luxury ship with large cabins and a spa, was chosen because it was the right size for a buyout, Moore says. The trip begins and ends in Tahiti's capital, Papeete, and visits four other ports in the 118-island nation: Raiatea, the second-largest island, with lush green valleys and many waterfalls; Taha'a Motu Mahana, which shares a lagoon with Raiatea and is home to 80 percent of Tahiti's vanilla crop; Bora Bora, famous for its beauty and coral reefs; and Moorea, with plenty of pineapple plantations, exquisite reefs and excellent shopping (for black pearls, among other things). Literally dozens of shore excursions—including glass-bottom boat tours, snorkeling and scuba diving; island tours and pearl farm visits; WaveRunner trips, parasailing, and helicopter sightseeing—are on offer during the days, with informal dinners on board followed by entertainment each evening. The big awards dinner is on the third night, on Taha'a Motu Mahana, which is accessible only by boat. The theme is based on the television reality show Survivor, complete with tiki torches and a tribal council set up for the awards banquet. Everyone gets a custom-made award themed to match the program. This year it will be engraved conch shells; in Ireland it was customized pub signs.
Like all of the three incentive trips profiled here, Transamerica Worksite Marketing's program had a goal that went beyond getting participants excited and setting the firm apart from its competitors. Moore attributes ten percent of the new production achieved in the previous 18 months to the trip, adding, "Ambassadors has helped us generate the kind of trip that makes people want to achieve."
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