In 1998, the Harvard Business Review published an article from B. Joseph Pine II and James H. Gilmore about what they called “the experience economy.” The hypothesis was that “leading-edge companies—whether they sell to consumers or businesses—will find that the next competitive battleground lies in staging experiences.”
The widespread adoption of the concept was music to the ears of event professionals, who have long understood how live events and experiences can be crucial to building loyalty and improving a business’s bottom line. It also helps showcase the value of incentive travel programs, which are a powerful way to improve employee productivity, retention, and morale.
But why exactly have incentive trips become such a great way to motivate teams and improve businesses? Taking a closer look at the neuroscience behind the concept can give a good picture of what makes them so effective—and how they can be improved. Here are three things to keep in mind.
1. Incentive Travel Programs are a More Powerful Motivator Than Cash
It’s true! A study from the Incentive Research Foundation (IRF) found that incentive programs increase workplace performance by an average of 22%, with team incentives able to improve performance by as much as 44%. Moreover, according to a study by Site International Foundation and the Incentive Travel Council, a whopping 96% of employees say they are motivated by travel incentives, and 72% who earn the reward say they feel increased loyalty to the company.
Those are great stats—but how do they compare to cash rewards? Incentive travel can actually be a more powerful motivator, particularly for the younger generations that make up the largest portion of the workforce. According to the IRF, 78% of millennials would choose to spend money on an experience over a product. After all, it’s all too easy to mentally combine cash rewards with regular salaries, thereby spending it on necessities rather than treating themselves to a memorable, relaxing experience.
“Interestingly, most sales incentive trip winners could afford the monetary value of their travel award on their own,” points out the IRF. “However, a unique experience where they enjoy traveling with their peers and have access to company leaders helps to create special focus that is more effective than the cash to travel on their own.”
2. Incentive Travel Programs Make Employees Feel Valued As Individuals
Everyone wants to feel special—and incentive travel can do just that. While top performers are likely hesitant to brag about their cash bonuses, winning a spot on an incentive trip is something colleagues can celebrate together, thereby motivating each other through a sense of playful competitiveness and FOMO.
Incentive travel can also be customized depending on the attendees and their individual talents, creating a more personal, authentic experience that strengthens their ties to your company. People want to feel valued and appreciated, especially in the workplace, and rewarding them with a thoughtful trip is an effective way to do just that.
3. Incentive Travel Helps Create a Powerful Internal Culture
According to the Incentive Travel Index survey from October 2022, 91% of organizations agree that—with an increasingly remote workforce—incentive travel has an even more critical role in building engagement and company culture. This can both retain employees and offer a competitive advantage in the hiring process, points out the survey.
This can also be a way to showcase a company’s values and foster goodwill. Corporate social responsibility programs, for example, are a common aspect of incentive travel. Incentive travel also gives top performers a much-needed break to relax and recharge—meaning they’ll return to the office feeling energized and ready to hit the ground running.
And don’t forget the value of the positive connections and team building opportunities that come with incentive travel, letting colleagues and leadership connect in more unconventional, authentic ways. Because after all, employees who make deep connections with their peers are more likely to report higher satisfaction, productivity, and creativity—a win-win!