The Experience Advantage

incentive

What form of non-cash incentive is compelling to your workforce? Consider an experience.

For many direct sales companies, the challenge of how to attract and retain the best possible people remains a head-scratcher. In the March issue of Direct Selling News, Courtney Roush dove into the world of compensation plans and examined how companies are rewarding consultants, versus how much to reward them.

So what does research say motivates people better? The Incentive Research Foundation (IRF) states that non-cash
rewards are up to three times more effective than cash. Why is this? Practical thinking would assume that cash is a one-sizefits- all reward, but that’s not always proven to be the case. For one, non-cash rewards are often something that an individual wouldn’t purchase for themselves. Sure, the utility of cash is nice, but most often it is spent on household items like home repairs, auto repairs or childcare needs and forgotten as soon as it is spent. Seldom do the recipients actually reward themselves.

Receiving a non-cash reward is guilt-free and creates a true vehicle for the celebration of a job well done, whereas cash is firmly viewed as transactional and compensational. Noncash rewards also offer increased social utility. The IRF also reports that being recognized in front of your peers is a proven form of motivation, but it can be embarrassing or inappropriate to discuss cash rewards in public. Non-cash rewards are far more acceptable to talk about with colleagues, old friends and family, or even posted on social media, generating enthusiasm, motivation and a shared sense of pride.

Motivational Forces Have Changed

The frequency in the use of non-cash rewards in the U.S. has exploded. Today’s estimate is that over 80 percent of U.S. companies use some form of non-cash rewards. This is up from only 25 percent in the 90’s, according to the Incentive Research Foundation. Why the shift in proliferation? As the U.S. workforce has changed, so have their motivational drivers. The IRF reports that cash no longer fulfills an employee’s organizational commitment, meaning, they don’t necessarily feel valued by their organization when handed a cash bonus that is seen as part of
compensation. However, they do when given a non-cash incentive that is considered in addition to compensation.

So, what form of non-cash incentive is compelling to your workforce? Consider an experience. According to a 20-year research study completed by Thomas Gilovich, a psychology professor at Cornell University, people consistently experience more long-term satisfaction from experiences than by acquiring more things. Gilovich states “People often think spending money on an experience is not as wise of an investment, but in reality, we remember experiences long after we forget our possessions.” Gilovich finds that adaptation and flashy consumer marketing is what causes material possessions to lose their luster more quickly. According to his research, we adapt rather quickly to new material possessions, raises or cash bonuses, where the thrill wears off fast, and marketers are very good and making the next version seem more appealing.

In contrast, we actually tend to upgrade memories of our shared experiences over time, emphasizing the positive moments and downplaying the bad. Gilovich’s research is reinforced by an additional study by the Incentive Research Foundation which reported that fewer people expressed regret over not buying a “thing.” However, many people can describe the regret they feel when passing up an experience, even years after the event has passed. Think about those passed up tickets to a sporting event, group vacation or concert that you wish you had attended at some point in your life.

Experiences Live On, Possessions Fade Away

The lingering desire for experiences proves that the gift of an experience, especially travel, can serve as an excellent motivator and recruitment tool for direct selling companies. According to a research study from the travel news website Skift, American Express surveyed their cardholders to find that 72 percent of respondents would rather spend money on experiences than things and 88 percent of respondents reported that travel topped their bucket lists. “Psychologically, experiences live on, and possession fades away,” says the Incentive Research Foundation. Travel is an extremely desirable motivator, especially to the millennial generation, which currently makes up approximately 37 percent of the direct sales population. But travel isn’t only desirable to millennials—it’s a common desire across all generations. The Skift study also included statistics from Tourism New Zealand, who surveyed over 20 million Americans between the ages of 22 to 65 and found that the desire for experience-based travel was virtually the same, regardless of age.


“People often think spending money on an experience is not as wise of an investment, but in reality, we remember experiences long after we forget our possessions.” —Thomas Gilovich, Psychology Professor at Cornell University

Beyond pleasant memories, travel experiences also build powerful relationships. Companies that travel together are more successful at building a connected culture and business owners that travel find themselves more refreshed when returning to their work. Travel also provides an opportunity to experience diverse perspectives and provides new inspiration or approaches to old problems, something that’s not possible within the confines of a home office or traditional workplace.

Impact Of Technology On Experiences

Technology is another reason for the shift in desire for experiences over possessions. In our increasingly social-media driven world, travel experiences are easier than ever to share and more motivating than ever before. In an interview with Joe Diaz, co-founder of AFAR magazine, Skift discusses how social media motivates others to travel. “When people see through the beautiful lens of Instagram these incredible things their friends are doing, they find that extremely inspiring, and they only have to click a button or two to find out what their friends did and how to do it too,” says Diaz. Direct selling companies that reward through travel experiences should promote social media before, during and after the trip. Diaz and Skift go on to emphasize the positive effect of social media in motivation, by encouraging companies to approach the use of social media and along with travel as a form of a reward and incentive. This creates a conversation much more powerful than a traditional marketing tool. It becomes a centralized part of the culture, and the experience creates limitless opportunities to engage new consumers, distributors and fans by posting genuine, authentic moments from the experience.

As direct selling companies continue to navigate the best methods to attract and retain the best possible salesforce, these organizations must remember that simply expressing appreciation for the work people do is no longer enough. It’s crucial to create an incentive program that rewards people effectively and aligns with your organization’s culture, goals and values. Next time, consider the power of transformative experiences and group travel as a new take on rewarding, motivating and celebrating your top performers.


Key Takeaways For Creating A Winning Incentive Travel Experience

  • Try to stay away from contrived, pre-packaged tourism and look for more personal, immersive experiences with human connection. A travel expert can help you identify authentic, “non-Google-able” experiences and create an itinerary that feels natural, relaxed and veritable.
  • Maximize Relationship-building opportunities by incorporating group activities and team dining experiences.
  • Encourage social experience by selecting resorts with informal gathering places like fire pits, walking paths and other informal gathering places.
  • Do your research or engage a travel expert that can do it for you. You want to make sure you select a destination that is attractive and motivating to your participants, plus offer one-of-a-kind experiences.
  • If you do present gifts on your trip, try to keep them experimental. An example of this is selecting a travel camera or athletic gear.
  • Get more bang for your buck! Encourage your participants to post their experiences on social media. Not only will this promote your brand, but this will also promote their own business and allow them to brag on themselves for their own achievements.
  • Increase the communication window. Travel does not only take place on the trip. Connect with your attendees before and after the trip to build anticipation and encourage them for next year. The anticipation of the trip can often be the most exciting part!
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