Current Uses of Incentive Travel in Germany

SITE - Society for Incentive Travel Excellence - DEFINITION of Incentive Travel:

Incentive Travel is a self-funding marketing activity that employs unique travel experiences to reward people who achieve exceptional business performance.

Productivity is an essential factor in economic progress and in all business success. Well-trained and highly motivated people are what power productivity and it is people who motivate people. Human motivation is influenced by the recognition, interest and sympathy of other individuals. This motivation is generated by positive interpersonal relationships that are balanced and managed with care, attention and sound leadership.

Incentive / motivational travel is a global management tool that can assist in this vital process because it is a catalyst that uses exceptional travel experiences to motivate and / or recognise participants for increased levels of performance.

Incentive / motivational travel is an instrument that may be employed in helping to tackle many of today‘s economic, organisational and indeed social and ecological challenges.

Companies today face more varied challenges and many are experiencing increased difficulty attracting and retaining the high-potential and skilled employees necessary to compete globally.

Incentive travel programmes have been proven to increase sales, boost productivity, retain customers, retain talent, promote teamwork and decrease staff turnover, among other results.

The following are some Current Uses of Incentive Travel in Germany:

 
Efficient direction of sales & distribution networks

Problems experienced by companies often include too many leads for too few salespeople, no influence upon consumer behaviour at points of sale, pressure on turnover and profit margins from direct competitors.

Solutions include employing an external sales force or sales & distribution business partners. Competitive pressure means that companies have to differentiate themselves with their sales partners. Differentiated incentives (travel, cash, vouchers) can be a crucial factor in business success.

Rekindling / maintaining relationships with customers (ROR)

'Return on Relationship' (ROR) incentives are especially effective in branches where customer relationships stretch over a longer period of time or where there is high personal contact frequency over a short period of time. Both instances are sometimes prone to periods of inactivity and to the possibility of dissatisfaction and desire for a change. The challenge is to keep customers and clients satisfied and to keep them convinced. Should customer expectations be surpassed by an unexpected incentive there is then a good chance that they will remain loyal to a product or service.

Increasing and maintaining customer loyalty via target group specific measures

There are two ways to grow business – win new customers and / or keep current customers loyal. The latter is more cost efficient and this is where Customer Relationship Management (CRM) comes into play. This means turning new customers into happy customers and maintaining that bond with sustainable incentives that show apprectiation and gratitude for their continued loyalty.

Winning new clients with attractive rewards

Marketing and sales managers have two possibilities to generate growth in turnover: win / acquire new customers or customer retention. Winning new customers in strongly competitive markets is a big challenge. How can I attract customers away from my competitors and generate additional turnover with my products and brand? It is necessary to create attractive incentives in order to create interest and strengthen purchasing impulses.

Employee motivation and satisfaction

“Motivation” is derived from the Latin “movere” – to move. Only when employees are moved to perform is corporate success guaranteed. Motivation arises as a result of appreciation and recognition. Companies who offer the right incentives are taken seriously by employees and management roles are strengthened, as they are often involved in the incentive decision-taking process.

Incentive packages may also be decisive in attracting and binding scarce employees and talent and at the same time spread a positive word-of-mouth message to potential employees in times of skills shortages and demographic change.

Employees, who experience appreciation and recognition work harder, take fewer days off, seldom resign and are more engaged in and for their companies. 'Individual Incentives' can also play a positive role here – and may not only be tied to individual performance but also to specific occasions and anniversaries. This way a company can visibly show how they value their employees.

TIP: UK “ENGAGE for SUCCESS Campaign”

Have a look at the "Get Engaged" video on employee engagement and motivation in the workplace.

This is a great UK government website and YouTube campaign video.

See: https://www.engageforsuccess.org

PARTICULARLY RELEVANT BRANCHES

Challenges in the areas of marketing, sales and personnel are as large as they are varied whether in the finance, automotive, consumer electronics or pharmaceuticals sectors.

One thing, however, is common to all of the following incentive-intense branches: the primary concern is about increasing turnover, business growth, corporate success, maintaining relationships and inspiring loyalty.

Finance & Insurance

Business with finance and insurance products and services is characterised by trust and relationships. If trust is broken then customers will take their business to a competitor. Personal contacts and client consultations are quality factors for customers and what makes this branch attractive to employees.

The central incentive goal for banks and insurance companies is the employment of appropriate rewards that allow them to remain attractive employers and help maintain broker and customer loyalty – the latter especially in the light of online comparison portals.

Sustainable customer loyalty is the primary goal of all this effort. Allied to this is gaining the loyalty of and incentivising independent finance and insurance brokers to recommend and sell financial and insurance products above and beyond competing companies’ offerings.

Automotive

German automobile brands are world-renowned and very successful. Despite this, competition is tough – both in winning new customers and in attracting qualified employees. This applies to car manufacturers, their suppliers and dealers – and to service partners in particular.

The central incentive goal for the automotive branch is the employment of appropriate reward solutions that will help generate both new and additional business and / or which enhance the branches image as an employer.

Challenges for marketing and sales include a decline in the number of new car registrations, a reduction in classic marketing budgets and increased price competition.

In addition, a highly dissected distribution and partner network has to be managed and optimised.

This is rounded off by the fact that automobile manufacturers are not only interested in selling vehicles but also in developing and nurturing long-term relationships with their customers. The development of cross- and upselling is an additional goal that is not easily mastered, requiring direct after-sales customer contact on the ground.

Consumer electronics

“Connectivity” isd a mega- trend. Smartphone and tablets sales are on the rise while turnover of other devices is on the decline. Large consumer brands dominate the market. Complex distribution and point of sale networks are particularly affected by this. The incentive opportunity for the consumer electronics branch is to discover appropriate reward solutions that reach customers, distributors and employees.

Challenges for marketing and sales include high marketing and advertising spends. Multi-tiered distribution nets also make it more difficult for manufacturers to influence customers’ purchasing decisions at Point of Sale . On-going dialogue and binding of distributors via incentive measures are, therefore, all the more important for sales promotion. POS promotions must also be relevant to the specific target groups in order to attract new and hopefully loyal customers.

Pharma Sector

The pharmaceuticals and life sciences industries are important sectors that traditionally generate a great deal of German MICE events - from classic congresses to incentive travel programmes. They are currently undergoing rapid change as patents expire, prices fall and global competition increases. The pharma industry, in particular, requires extensive experience, interdisciplinary expertise and an understanding of where this industry is heading.

With Pharma events you have to distinguish as to whether the participants are either doctors or pharma company employees and / or distributors. The so-called "Pharmakodex" does not apply to the latter, i.e. employees and distributors.

The following trends are evident for pharma business events including incentive travel for pharma company employees and / or distributors:

·      Shorter duration

·      Shorter distances and travel times (this bodes well for Berlin)

·      As a result, good access and central locations required

·      More conference, more training, more coaching, less social programmes

· Stricter programmes with clear demarcation guidelines to traditional "insurance brokers'-type fun parties"

with

·      "Normal" toned-down evening events

·      Lots of workshops and breakout sessions

·      Lots of new cost reduction measures

·      Much shorter lead-in periods and shorter planning horizons

Favourite German pharma event locations are indeed Germany and Berlin. In Europe, Spain and Mallorca score well, with their good flight connections, sunshine and not "too expensive" image.

The Pharmacodex

The pharmacodex has to be strictly adhered to for pharma business events including incentive travel for physicians and doctors:

·      No luxury, no wellness, no free-time, "team-building" or sporting activities, no over the top food & beverages, no social programmes, no accompanying persons, no longer stays

·      Further training is essential: best of all with CME certification - no promotional events for pharma company products. External speakers are required (often via speakers offices) and an external medical director

·      Accommodation: 4-star hotels as a general rule - if a 5-star hotel then a city centre business hotel with conference facilities

·      Locations: e.g. Sylt is often a no go, Berlin is OK

Pharma companies rarely organise MICE business events themselves any more but invite doctors to large international and national congresses instead which are organised by medical associations (e.g. Deutsche Krebs, Deutsche Urologen, Deutsche Diabetes Gesellschaft, Europäische Diabetes Gesellschaft).

The locations are a given, the associations decide where the congress is being held, the pharma companies decide which of these congresses best fits their pharmaceutical products and how high their budget for any particular congress is - therefore the importance of canvassing medical and pharmaceutical associations at home, in Europe and in Germany.

Pharma company budgets for congresses in particular will depend on the product in question and its product cycle. If it is a mass medicine then many doctors will be invited, if it is a niche product (fewer patients, fewer prescribers) then fewer doctors will be invited.

Of significance for the product cycle is in which stage a product currently finds itself. In the beginning a lot will be invested in marketing and worldwide congresses will be visited, in the USA in particular - the USA being regarded as a leading pharma research nation. At the end of the cycle budgets will sink and European and / or national congresses will be attended.

When a patent runs out then rigorous savings measures will be introduced since the product / s cannot compete any more in price with generic drugs. The product will no longer be promoted and relevant congresses will no longer be attended. Sales will then cease.

·      Activities in the pharma sector are independent of the general market / economic situation but are dependent upon the success and product cycle stage of their product/ s

·      Strict observance of the "Pharmacodex": less expenditure, no 5-star products, simple food & beverage services, no social programme, no accompanying persons

·      Destination: dependent upon the choice of the scientific association congress organiser (medical association and NOT a PCO, agency or pharmaceutical company)

Many of these "compliance" guidelines are increasingly being adopted and applied by the automotive, insurance and financial services sectors.

© Dr. Patrick Patridge 2017 - https://www.patrick-patridge.com