• How Purchasing and Procurement Impact Incentive Travel Decisions
• IPC White Paper Outlines “New Rules of Engagement”
• Study Shows Overall Incentive Marketplace Is Still Growing

How Purchasing and Procurement Impact Incentive Travel Decisions

It’s no surprise that there’s a disconnect between incentive travel planners and corporate purchasing and procurement departments.  They have different goals.  According to Bob Dawson, research committee chair for the Incentive Research Foundation (IRF), “Incentive travel planners are driven to create the most effective program and award experiences possible for participants, while procurement departments are tasked with containing costs.”  But a recent IRF study on “The Involvement of Procurement or Purchasing in the Incentive Travel Business” found that there are constructive ways to address this relationship and have the two work departments together more effectively. 

In fact, survey respondents suggested that the increased involvement of procurement departments in incentive travel planning has implications which suppliers would be wise to note.  They include the understandings that:

• In the current marketplace, procurement cannot be ignored.  To do so would exacerbate the provider/purchaser relationship and alienate a key stakeholder department.
  
  
• Incentive travel providers need to acknowledge procurement's increasing role and address their needs and issues during the proposal and implementation processes.
  
  
• It behooves providers to educate procurement executives about the value of their services with a strong emphasis on return on investment, to show how incentive travel programs can maximize “bang for the buck.”

For more information about the Incentive Research Foundation and its current and ongoing research programs, visit www.TheIRF.org; for a more detailed summary of  the IRF study on procurement and incentive travel, click here.

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IPC White Paper Outlines “New Rules of Engagement”

With competition high and employee retention and customer loyalty at all-time lows, the need for companies to create emotional engagement with employees, channel partners, and customers has never been greater.  That’s the message delivered in a recent white paper, “Going One-on-One: The New Rules of Engagement,” sponsored by the Incentive Performance Center (IPC).

Drawing on interviews with some of the leading experts on engagement, including Don Peppers of the Peppers & Rogers Group, Mark Schumann of Towers Perrin, Alex Edmans of the Wharton School, and Allan Schweyer of the Human Capital Institute, the white paper offers a working definition of engagement and talks about some of the prerequisites of engagement in organizations, including:

• A clear and promising direction.
• Clear development opportunities.
• Confidence in the organization.
• Teamwork and collaboration.
• Meaningful objectives and expectations.
• A system of measurement.
• The necessary skills and tools.
• A system of reinforcement.

The paper has an important message for brands as well.  To build customer loyalty, customers will have to step up their efforts to fulfill the brand promise.  “And to ensure that you are fulfilling the brand promise and meeting customer expectations,” the white paper argues, “companies will have to have employees who are engaged and enthusiastic about their work, have the right training, have the right tools and information, and have the authority to take action.”  The IPC white paper offers some suggestions on how companies can begin to move in that direction.

To see a copy of the complete white paper from IPC, click here.

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Study Shows Overall Incentive Marketplace Is Still Growing

A total of $46.1 billion was spent by U.S. companies on incentive travel and merchandise in 2006, according to the “Federation Study 2007: A Study of the Incentive Merchandise and Travel Marketplace,” sponsored by the Incentive Federation and conducted and prepared by GfK, the fourth largest marketing research organization in the world.  That total represents a significant increase from the just-under-$30 billion figure that was reported in the Federation’s last comprehensive survey in 2000.  It also represents $32.7 billion spent on incentive merchandise and $13.4 billion on incentive travel.

In addition to budget figures, the report looks at how merchandise and travel incentives are being used.  According to the study, some 34% of U.S. companies overall used either travel or merchandise incentives last year, with 31% using merchandise and 10% making use of travel incentives.  The average budget for travel incentives in 2006 was $164,271, with more than three-quarters of incentive travel end-users spending between $100,000 and $500,000.  The typical budget for merchandise incentives was lower - $119,008 – and just under half of merchandise incentive users spent between $100,000 and $500,000.

For a more detailed look at the “Federation Study 2007,” click here.

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