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Incentive Encounters: Motivation in the Making
September 03, 2008
A look at the history of incentives
By Terry Epton, CITE, DMCP
Working in an industry that is relatively young means that the rules aren't quite as clear—or as rigid—as they are in other industries. The incentive and the DMC industries are both prime examples. We are still making the rules, defining the landscape and redefining the lines as innovations and new ways of thinking are applied.
In the Beginning
With its beginnings traced back to the great depression, the incentive business was born out of necessity. If there was ever a need for a leg up on the competition in an American business, it was during the depression years when companies struggled for survival. To gain or lose market share then meant the life or death of many businesses.
As the Story Goes…
It is my understanding that Maritz became a recognition company out of such necessity. Having originally been a jewelry company for over 30 years when the stock market crashed in 1929, jewelry sales would likely become an early victim of the broken economy. At that point a move was made to feature the engraved "gold watch" as the parting recognition gift to so many executives who were compelled to retire in those tough times. Getting the "gold watch" has since become metaphor for "retirement with honor" from a respected corporation.
That "find a need and fill it" creativity blossomed into a new direction for companies wishing to improve their sales. It was only a short leap from recognition to incentives, providing merchandise to sales executives in the form of non-cash rewards and service awards. From this humble beginning grew one of the world's most innovative and successful companies…
Not Alone in the Creativity Department
In the late 1930’s Curtis Carlson founded the Gold Bond Stamp Company, created to promote customer loyalty through inducement to accumulate trading stamps coupled with purchases, which could later be redeemed for merchandise. Customer loyalty programs in the form of trading stamps exploded into a huge business reaching its peak in the 1960s. Merchandise incentives then took another short leap and travel incentives emerged. Incentive travel has been a major player in the motivation industry ever since.
Many existing businesses capitalized on this new industry. Obvious players to benefit from this new powerful motivation tool were hotels, resorts, airlines and cruse ship companies. Additionally, motivation companies began forming to provide the incentive marketing formats, proposals, designs and measurement tools necessary to carry out successful incentive programs. Starting with sales incentives, and branching out into many other areas, an industry was born. By the 1970s it became apparent that creative extraordinary programs would win the business when trying to craft motivational challenges to spark productivity.
Industry research later proved what was already becoming apparent: travel was a greater motivator than cash. (The research is available through the IRF (Incentive Research Foundation "The Benefits of Tangible Non-Monetary Incentives.") The trophy value of a once-in-a-lifetime trip, coupled with the corporate identity attached to that trip, dwarfs the generic fleeting value of same-dollar-worth cash rewards. Logically, during this time of growth, the creativity that demanded more and more professional incentive travel program delivery necessitated acute destination knowledge, and another industry was born: destination management.
Necessity Is the Mother of Invention
In 1958, two creative college students realized there was a difference in the service levels and contributions necessary to satisfy Fortune 500 companies choosing to bring groups to the West Coast. No longer could tour wholesalers, receptive operators or ground suppliers offer "canned" experiences. Travel rewards needed to be custom designed, creative and extraordinary from initial concept to the actual delivery. Those two college students saw a need and filled it. They started the nation’s first DMC, San Francisco Hosts, which eventually grew into the first multi-city DMC, today's USA Hosts.
Columnist Note: As this column develops in future issues, I plan to explore the long and winding road that the incentive industry has taken to get where it is today. There are many stories, many lessons learned and fabulous tales to be told. Some of these tales are romantic, some are adventurous, some illustrate genius, some are tragic and some are just plain bizarre—such as one tale told to me several years ago at an incentive industry conference by one of SITE's founding members and past presidents. It'll make you gasp in disbelief! Visit the Daily Perk, Incentive's official blog, to read the whole story…
Chief Executive Officer of USA Hosts, Ltd., Terry Epton has been an executive in the Incentive Industry for 26 years. As past Chairman of the Board for The New Orleans CVB, Terry is deeply involved in marketing and hospitality Industry leadership of New Orleans. Twice President of ADME, the Association of Destination Management Executives and long time member of SITE, Terry served on the Society's International Board for two terms and as an officer for four years. Mr. Epton is a Trustee on the IRF, Incentive Research Foundation. Terry was named "Incentive Travel Personality of the Year" in 1999. With both the Certified Incentive Travel Executive (CITE) designation and the Destination Management Certified Professional (DMCP) designation, Mr. Epton believes strongly in on-going industry education and community involvement.
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