A growing emphasis on the experience economy, reporting and analysis, managing risk, personalisation, and increasing demand for long haul destinations are among the key trends impacting the incentives industry this year, according to the newly released IRF (Incentive Research Foundation) 2020 Trends Report.
The report identifies the following key areas of change and their implications for workforce engagement, incentive travel and recognition…
Executive support of incentive programmes is strong – most of the time
Executive support for reward and recognition programmes is strong. The upcoming 2020 Top Performer Study reports that 94% of executives at top performing firms are strong supporters of incentive programmes and consider them a competitive advantage. This top-level support tends to result in increased investment and visibility in the organisation, which allows programmes to grow, programme designers to enhance offerings, and often provides funding and programme rules that include a greater number of participants.
Reporting and analysis are growing
Since there continues to be pressure from management for incentive programme owners to prove the value of their programmes, the amount and type of reporting and analysis of incentive programmes continues to increase. In the IRF’s Industry Outlook for 2020, it was reported that corporate users conducting analysis on how programmes change behaviour increased to 44%, compared to 25% in 2019. Metrics for tangible benefits include decreased staff turnover, increased productivity, sales, revenue, market share, gains in customer satisfaction, and customer acquisition. While more difficult to measure, metrics for intangible benefits include employee satisfaction, collaboration, and impact on company culture.
Participant satisfaction is the new top metric
According to the Incentive Travel Industry Index, participant satisfaction was ranked as the most important metric to demonstrate the value of an incentive programme to senior management. These findings are reinforced by the IRF’s Industry Outlook for 2020, which reported that satisfaction level of participants is the most common measure of programme success used by both corporate (68%) and third parties (80%). While participation was the top programme metric in 2019, this shift to participant satisfaction reflects the growing importance of designing for the experience economy and surveying programme participants.
Wider reach is more impactful than exclusivity
In order to motivate and engage a larger number of programme participants, designers are structuring programmes with a wider reach, with the goal of each participant receiving recognition or rewards. According to the 2020 Top Performer Study, top performing firms are 64% more likely than average performing firms to design programmes with the goal of broad reach rather than exclusively rewarding top performing programme participants. Many programme owners are running multiple or tiered programmes, often including an incentive trip for the top tier performers and rewarding additional participants with merchandise, gift cards, or local experiences.
Emphasis on the experience economy
As preferences shift from material things to seeking out unique experiences, incentives professionals are becoming experts in the experience economy. For incentive travel to be a true reward, it needs to be unique, fresh, and authentic to the destination. The Incentive Travel Industry Index reported that 73% of DMCs, DMOs, and suppliers indicated that offering one-of-a-kind, exclusive experiences was the top method to add value. Experiencing the destination and building relationships through meals remain top rated items for successful incentive travel programmes.
Closer to home, programme designers are creating memorable experiences for focused on participant preferences, with rewards including guitar lessons, spa days, cooking classes, access to new restaurants etc. At events, the traditional “gifting suite” has evolved into a marketplace experience where attendees can select and often customise gifts based on their preferences.
Managing risk online and onsite
Marriott’s massive data breach affecting the records of up to 500 million customers demonstrates a potential risk to any business that collects customer information. As incentive software becomes more sophisticated and programme owners collect more participant data, the risk of being hacked also increases. Investment and commitment to data security will continue to be critical to the incentives industry. Regulations, such as the European Union’s 2018 implementation of the General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA), which went into effect in January 1, 2020, are also driving increased measures to improve data management and security.
Incentive travel continues to involve a degree of financial and physical risk. The Incentive Travel Industry Index noted that challenges around safety, security, and marketplace uncertainty were the most important negative factors impacting programmes planned for 2020 and 2021. Additional security concerns include border security between countries, terrorism, natural disasters, and general marketplace uncertainly. With locations that are considered risky, planners are investing more in security reviews prior to contracting, including background checks, extra security personnel, and additional risk management support from the venue.
Long haul destinations are becoming more in-demand
The Incentive Travel Industry Index reports that Western Europe and Central America are the top long-haul destinations used by North American buyers. As the focus sharpens on the experience economy, programme participants are craving new destinations and new experiences. Planners are expanding their searches to second- or third-tier destinations so that participants experience something new and unique. North American buyers are also showing more interest in Oceania, Southeast Asia, and Central America, with approximately 9-12% more buyers expected to increase use of those destinations over the next two years.
One size does not fit all – personalisation is key
When it comes to motivation and rewards, one size does not fit all. Programme designers are developing innovative ways to include personalisation throughout their programmes in order to make a lasting impression on programme participants. Incentive event planners survey attendees prior to the event in order to provide attendees customised experiences, meals, and gifts based on their personality traits and expressed preferences. Personalisation requires a higher level of data collection and analysis, as well as a longer lead time. For example, custom-made items may need to be sourced ahead of the event.