Corporate Incentive Travel - 3 Psychological Reasons Why Better Than Cash

Uploaded by CorporateTravelsNow on 11.09.2010

bjbjqPqP Corporate Incentive Travel 3 Reasons Why Shrinks Say It s Better Than Cash So you
re looking to motivate a team, reward them for a job well done, or incentivize them to
hit a new quota. What s the best way? Cash or a travel incentive program? The easiest thing you can do is figure out how
much it s worth to you, then put up a cash prize for that amount. Right?
Wrong, according to recent studies in behavioral economics and human psychology. Here s three
reasons why an incentive travel experience is better than just cash. People Don t Like
To Feel Guilty About Spending Money Drazen Prelec and George Loewenstein, behavioral
economists, found that people experience a "pain of paying," which lowers your excitement
at time of purchase. So that $500 bonus you were looking forward to spending doesn t actually
FEEL so good when you head to the store you use it on that new outfit. This leads to a
guilt factor which lowers the motivation to spend. In a group of studies where thousands
of people had to choose between a luxury item (trip, jewelry, electronics, ect) and cash
of equal or greater value, a large part of the group (between 13% and 39%) chose the
luxury item over cash Why? "If I went with the cash, I d spend it on something I really
need instead of something I ENJOY and "Now I can pamper myself and not have to spend
the cash on groceries. Here s the takeaway: If you don t make your incentive program relevant
and MOTIVATING, like using a travel incentive experience, your $500 bonus to your sales
star Andy for hitting quota just ended up being spent on pizza, beer and cereal. And
this leads to the 2nd reason why incentive trips are better than cash Cash Is Quickly
Forgotten Wirthlin Worldwide Research conducted a recent study asking the question: "How did
you spend your last cash reward?" 29% paid bills 18% didn't remember 15% said they never
received cash 11% bought a gift for the family 11% bought something for the house 11% saved
the money What? 33% said they didn t remember what they did with it or said they never received
it? Wow. This is a BIG reason why most cash incentive pale in comparison to travel incentive
programs. Your team WILL remember a week at the beach, under the sun, sipping a Pina Colada
or even a nice weekend retreat with the spouse at one of the local 5 star properties. Here
s the takeaway: Remember Andy s $500 cash bonus you were going to give him? Instead,
you could have taken that $500 and paid for a weekend stay at a nice 5 star hotel locally.
Crank it up a notch to $1000 - $5000 bonus, and you could send him and his whole family
to the Caribbean for a week for an all inclusive resort. The memories, pictures on his cubicle
walls, facebook posts, will last much longer than last weeks groceries. Whenever he talks
about that trip, he ll remember exactly WHY he was there (because he s a sales rock star)
and WHO sent him (the company he s now more loyal to). And this brings us to our LAST
reason why Incentive travel is better than cash Humans Will Work Harder For Travel Ran
Kivetz, the Sidney Taurel Associate Professor of Marketing at Columbia University Graduate
School of Business recently revealed something fascinating about human psychology and motivation
People are wired to commit in advance to a luxury item, like a business incentive travel
program, more so than a necessity like groceries when the conditions to get the reward are
increased. This means that if you raise the quota, your team is more likely to WANT to
hit it if the reward is a non-essential payout (i.e, something instead of cash) Here s the
proof: In two different studies with loyalty programs, people were given the choice between
a program with a one hour facial or massage with a retail value of $70, or they could
join a program that gave them a $70 gift certificate to a local grocery store. Regardless of the
study, when the requirements to get the reward were low, a higher percentage of people opted
for the grocery certificate program. When the requirements were made a little tougher,
they shifted to the luxury offer rather than the groceries. So here s the takeway: If you
want mediocre response and lackluster effort to hit a new quota, throw cash around. But
if you want to get some REAL deals in the door, use that same money and make it an incentive
travel experience. If you re looking for more ideas on what kind of corporate incentive
travel experiences you can offer, grab your free copy of Corporate Incentive Travel 21
Great Ideas to motivate, retain and build the greatest teams at our website HYPERLINK
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