A key group of industry veterans discusses the coming paradigm shift in meetings and incentives, coping strategies and the need to maintain incentives in a shifting economy. Edited by Sandra Eagle, Photograph by Ian Crysler, November/December 2008
Nicola Kastner, CMP, CMM, manager, Strategic Event Marketing Maritz Canada Inc., is responsible for providing strategic guidance to opportunities in incentive travel, event marketing and meetings management; Liliane Leger, president & CEO World Wide Meetings & Motivation, is a 25-year veteran in the travel and incentive industry; and Vladimir Haltigin, CITE, programme manager, Xerox Canada Ltd., has a meeting and incentive career spanning 40 years, and has won eight SITE Crystal Awards.
These industry veterans talk to the coming paradigm shift in meetings and incentives, coping strategies and the need to maintain incentives as the world economy shifts.
M&IT: It’s all about the economy. Most industry sectors are reeling from volatility in world markets. What does that mean for the meetings and incentive sectors and what kind of strategies are you going to utilize going forward?
Kastner: Our industry, actually, is in a transition as a whole. Events, meetings and incentives are all being looked at as part of a business strategy versus stand-alone events. So within the meeting sector, we’re seeing cutbacks, certainly in the number of participants that are attending meetings. We’re advising our clients to look at their programmes as an investment, versus an expense, and how they can target them to make them more meaningful.
M&IT: Is there going to be more focus on measurement?
Kastner: Absolutely. I think measurement needs to start in the beginning stages of the process. I think we’re seeing a paradigm shift in the industry. We’re going from meetings that are all about the tactical to results-based meetings.
M&IT: So planners need to ask their clients, specifically, what types of outcomes they want from a meeting?
Kastner: I read a quote recently and I think it shows the need for evolution in our business. It was from a CEO of an organization. He said, “I need my people to think about the business of meetings, not the meetings business.” I think that’s the perfect way to summarize the shift that we need to make in our industry. We need to be able to think about learning strategies, content and measurement. We as meeting-planner professionals can add a great deal more value and if we can prove our worth, then our industry proves its worth.
M&IT: What about incentives in tough economic times?
Haltigin: It depends on the company. Successful companies will always look at the business goals they have and plan for meetings and incentives that are clearly related to the business objectives that they have for a particular period of time. Certainly, there will be budget cuts, we know that. There will be fewer people in business, but it’s still critical to maintain the motivation of those people who are in the company. The salesforce should continue to be rewarded appropriately.
Leger: Some corporations have been relocating their incentive destinations, even though a programme has been launched, especially in the financial industries. A particular client had decided to cancel their programme, but have now relocated their programme from the Caribbean into Quebec for January and it is purely for perception purposes.
Kastner: We’re seeing a lot of downturn in space for our clients. Programmes are being cancelled; others that have been launched have been cancelled, flat out. In tough economic times, incentives become more critical. Instead of abandoning the incentive model, we must focus on showing the value of incentive programmes and that value goes beyond boosting sales. An incentive programme can reinforce employee commitment, retention and loyalty. And it’s those returns that will have to be measured and considered in the future. We must look for new ways of designing, measuring and articulating the value of incentive programmes, so that companies understand their value as critical business and communication tools.
M&IT: What kind of strategies are you going to employ or keep top-of-mind, going forward?
Kastner: We’re working with our clients on budget management. It’s important to know what is critical to maintain and what can be cut. We’re really focusing on results. What are the objectives you’re trying to achieve for the meeting or the programme? How are you going to define success against that and how are you going to build that? Because at the end of the day, the event needs to meet a business objective.
Haltigin: Then there are tactics that can be used to adjust various programmes – budgets are number one when the going is tough. If you were doing a travel incentive, then you would be looking at different destinations, maybe closer to home. Also, potentially limiting the number of winners. There are other programme and contractual tactics that can be used to optimize the winners’ experience, but the most important thing of all is, once a decision is made to go, you have to have the perception of quality all the way through. That’s the most critical continuity factor, that whoever participates in the event, comes away with the feeling that, “Yes, it was as special as any other time.”
Kastner: It’s also about the after-glow effect, right? How it affects that participant to achieve their goals next year, as well as those around them. If you’re not going to keep that continuity of the experience, you’ve undone any good that you’ve done by operating that programme.
Leger: We’re presenting a proposal next week, and our client would like to see what the cost is for a five- or a four-night programme. And depending on how the economics will be between now and the time to deliver it, we’ll be able to make a decision as to the final number of nights. So it gives us flexibility at this point; it’s still the valuable destination, the content is still the same; however, if we reduce it to four nights, the delegates can do a pre- and post-programme, so it still gives the full effect of the incentive.
M&IT: The volatility of the dollar must have a huge impact as well.
Kastner: When I spoke at the SITE conference in October, the dollar was close to 86 cents. Now, it’s what, 77 to 78 cents? Just even that impact from a month ago is significant, never mind from when a programme is costed out and was budgeted six months ago. The dollar was on par then.
M&IT: Are clients asking you about retaining their staff?
Haltigin: One of the other trends that happened in previous downturns in the ’80s and ’90s was that actually people became more loyal to a company during those times, because the ability to change was not as easy as it is when the economy is booming.
M&IT: What about clients who are thinking of cutting back right away?
Leger: It feels like we’re going back to 9/11. If the client needs to shift or change, I’d rather not cancel a programme, but delay it. So it’s going back to the suppliers and saying, “We need to reinstate this particular incentive at a later time. How can you work with us to avoid the attrition and the cancelation fees? We would investigate reinstating the air space, the block.” So if a client is asking to cancel, I look at all those elements and then come back with the pros and the cons. The client will be in a better position to make a final decision. Then basically, either they will proceed or do it with just a smaller group size.
Kastner: And that starts with the contracting phase. You have to keep the worst scenario in mind when you’re booking or negotiating your contracts, so you have legal clauses that are in there to help protect or offset some of the damage. But I also think there are absolutely times that a programme should be deferred. There are also times when it makes more sense to continue to run the programme and you start looking at how you can cut back, perhaps on entertainment. We hear time and time again from participants that, “I want free time.” So you can give your people a day of leisure and they will be perfectly happy with that.
Haltigin: The key is knowing your participants and understanding what motivates them. It obviously varies with age groups, it varies with demographics within the same company, depending whether the participants are in sales, service or administration. People love the opportunity to go on the programme, so maintain the quality as much as you can, but build in flexibilities that they will appreciate.
M&IT: Will economic chaos play into your relationship with suppliers when you negotiate with them?
Haltigin: Relationships that are built up both ways between the supplier and client really help. The client relies a great deal on the incentive. I rely a great deal on them to give me the trends of what’s happening in the marketplace. I rely on them as well to give me the best information that I can have, in order to present back to my management team. In turn, the client can show loyalty by using the same pool of suppliers constantly.
Leger: I find, on the supplier side, what’s been happening recently is hotels are offering 20 per cent commission on their room rates, which is the first I’ve ever seen in over 30 years. It’s because there’s more availability. More upgrades are being offered. That’s on the hotel side, but on the destination side, the DMCs and tourist boards are offering more familiarization trips. With airlines, I find that they cannot reduce fees anymore, because airfares have not really increased for the last six, seven years. So the air, really, it’s a little bit more confused, it’s more limited to work with. Those are the three areas, for me, that have been affected.
Kastner: From our perspective, from the time when we’re quoting a proposal to time of sale, we’re seeing fare fluctuations and schedule changes are happening constantly. It’s a juggling act that you just have to deal with. But lift is certainly down; so is the availability and the capacity on flights, because they’re using smaller planes, but fares are going up.
I read a quote somewhere recently that was a great summary of what we are facing with our airline partners: “Not only are you not getting the honey-roasted peanuts anymore, but you’re now paying the cost of a filet mignon dinner to check your bag.” What I’ve heard from our hotel partners is 2009 is soft, 2010 and 2011 are really strong. You know, when we look at working with our clients, we’re often looking into ’10 and ’11. So 2009, I think, is going to be a bit of a softer year, 2011 may turn softer with a lot of cancelations, who knows. But at this point, everybody’s just holding their breath, waiting to see what will happen.
M&IT: In your general experience, does the industry as a whole realize the importance of incentives in motivating, retaining and keeping staff happy?
Kastner: I think there’s awareness, but I still think it’s a tough sell.
Leger: The 2006 Gallup Poll showed that 65 per cent of employees received no praise or recognition in the workplace in 2005. But, according to the Society for Human Resources Management, 79 per cent of people leave their job because there is a lack of appreciation as a key scenario. Now, do the clients totally understand that? I’m not sure. And it depends on what industries you’re dealing with.
Kastner: Our career path is in transition. We should have a seat at the table and we should be using our voices. I think it’s up to us, as meeting professionals, to educate our internal stakeholders, and the industry as a whole, as to the true value of incentives and how they can affect business.
M&IT: How do you get that across?
Kastner: As the war on talent grows, it’s becoming a large focus in organizations these days. People spend a lot of money trying to recruit good people and retain their best employees. I think there’s awareness, but there’s a very high perceived cost with an incentive-travel programme. So often, people will look at an incentive such as cash versus an incentive-travel programme or even a reward programme. Depending on the client’s climate, there are times that different types of incentive programmes work. So I think for us to say that an incentive-travel programme is the only way to go is wrong, because we’re doing a disservice to the industry as well.
M&IT: Can you elaborate on how our industry seems to be shifting?
Kastner: The logistical side will always be important, because you cannot have a successful event learning without flawless logistics to support it. But we as an industry need to recognize that logistics are just a piece of the puzzle and look at the meeting or incentive holistically.
Leger: I find some clients like to do some of the programme logistics because they want to cut costs i.e.: handle registrations, coordinate the meeting content. It is easier with all the new technologies in place now. That’s done in-house and then they leave it up to the professionals – us – to do a site search or to develop a proposal for a destination.
Haltigin: On the other hand, the meeting planner inside the company should act as the interpreter of the requirements of the people within that company to the incentive house, or the DMC, to make sure that the content relates to their expectations. The incentive house absolutely wants to do a good job and to work with the people within the company to try and meet their needs.
Kastner: I think for corporations, it’s important to understand there are a lot of individuals that are planning meetings, events and incentives that, if you look at it from a spending perspective and sort of a liability perspective, it’s what the industry’s come to know as strategic meetings management – using that spend as a negotiating tool and to understand where your spending is, leveraging it with your partner and hotel suppliers and signing appropriate contracts. So you have executive assistants that are signing contracts with millions of dollars of liability that have absolutely no reason to be. So I think if an organization does have in-house planning, one thing that they really need to do is to look at their business holistically and to understand what that spend is and capture the benefits of it.
M&IT: Is four generations of employees in the workforce impacting your programmes at all?
Haltigin: Well, there’s Generation Y, Generation X, the baby boomers and the traditionalists. One of the attributes of the younger X and Y generations is that their motivations and their expectations are very different. They live in a connected world. But there’s an expectation of good things and an appreciation of quality. There’s an appreciation of something that is special that they cannot buy for themselves. That’s consistent across all of the generations.
Kastner: It absolutely impacts the programme design. What motivates me will be different than what motivates my father, or my nephew who is just entering the workforce. There are many more dual-income families and that has a significant impact on the design of a programme. Our challenge is to help clients understand that the needs of participants are different than they were a number of years ago, and even very different within the same audience. We hear time and time again from participants that they’re interested in family programmes, although clients are often reluctant to consider these. To motivate an audience, you have to determine their needs before you design the programme. It is important to remember to ask all the audience, not just those that have won in previous years. From a meeting perspective, I think we’re seeing a huge impact, because different generations learn differently. They want to see things differently; it’s how you deliver the content that’s important. Technology is changing the traditional meeting format – understanding where technology fits is huge – and that is a change for our industry.
Leger: In our proposals, we offer more of ‘your day, your way’ with incentives. So if you choose to go to Bilbao and go to the Guggenheim, or if you choose to just go on the beach, that’s also available. So it’s just giving more freedom on-site.
Haltigin: Yes, variety and choice are very important. Everyone, irrespective of their age group, likes to choose. Everyone values their free time and likes to have some time on their own.
M&IT: What about the group dynamics on incentives?
Kastner: Many of our client’s goals and objectives in designing an incentive programme is networking with executives and networking with one another. If you think about it, you’ve got the top percentage of your salesforce on-site. What better way to have one-on-one meaningful dialogue between your employees and executives than when you’re there? But the days of shaking an employee’s hand at the awards ceremony are no longer enough. We must look for ways to incorporate meaningful one-on-one time with those senior executives and participants. It’s an open forum that creates dialogue. The participants feel they’ve had face time with the executives and their contribution is perceived as valuable. The executives get phenomenal information out of it. The key is to continue the dialogue after the event and keep the lines of communication open and to document it. Often the clients will set up a networking site afterwards, so they can continue that conversation.
Haltigin: The value of incentive programmes is that, typically, people from various parts of the country don’t see each other on a day-to-day basis, and need time to interact. One of the things that is always valuable is the sharing of day-to-day challenges and successes that they have. The social networking is a very valuable business tool.
M&IT: Are there any other trends that concern you?
Kastner: The direct flight access is a really hot button, because Canadians really want the direct flights. And that limits a lot of destinations. And in today’s changing air schedules, what might be direct today may not be by the time a programme operates. From a textbook programme-design perspective, I see shorter durations. Most of our clients are looking at four or five nights and some even three nights. I’m also seeing some trends from a strategic direction. Our clients are starting to look at their incentive programme design and focusing more on the concept of, ‘how do we move the rest of the audience rather than the same people who win year after year? How are we going to motivate the rest of the audience to achieve the greater business objectives?’ People are more willing to have those discussions about a programme that they’ve had in place for a long time and start to poke holes at the structure. The focus of measurement outside of the traditional on-site survey – aka the smile-sheet survey – is huge now. Typically, in our industry, we’d ask the question: “Did you like your time on the catamaran?” Really, in the scheme of things, does that really matter? I’m sure you had a nice time, but is that going to improve the programme for future years? So how do you use measurement to a) measure success, but b) to drive improvements, year after year?
– Sandra.eagle@mtg.rogers.com
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