A Travel Incentive is Not an Expense ...
A Travel Incentive is not an expense ... For those of you accustomed to writing reams of justification to get your incentive travel program into your companies fiscal forecast. Hear me out! I am telling you that any outlay of monies spent on a properly structured travel incentive will return more than the amount paid out in additional profits. Thus a profit generator (profit center).
Here comes the example to validate my assertion: A long, long time ago, when I was a lad, I worked as an Ad Director for a vacuum cleaner manufacturer. I firmly believed we could persuade our distributor’s to sell more vacs than they ever thought they were capable of selling if we could offer them a good enough reason. We finally decided to offer each of them a trip to Rome, Italy (with spouses) in return for a set number of vacumn cleaners purchased. Perfect choice because until the early sixties the only way to Rome from the USA was by cruise ship, or prop planes that stopped three times and took about 26 hours. This was the early 60’s so none of our distributors had ever been to Rome.
We had the prize, we could make the vacs. We needed just the money to run the trip! So I created this "P&L Pro Forma" (that’s what we called it), to convince our president that we had the money to run the trip. Because I knew that a travel incentive could generate its own budget – because it is a profit center!
-
The year was 1964 (as I said, I was a young lad)
-
We did about $20 million annual volume in 1964, each of those dollars is worth eight of today’s dollars. We were, in essence, a $160 million company in today’s dollars.
