You look like you need a vacation

When was the last time you took to the lazy river with your customers?

It turns out that booking a vacation can be a productive use of your time and resources — and in more than just a “rest breeds renewed morale and focus” kind of way.

Many retailers across many industries are wise to the benefits of vacation incentive programs, which, beyond offering loyalty perks to their customers, also provide a face-to-face opportunity to build lasting memories and relationships with their clientele.

“Most industries are using travel incentives to increase market share or employee recognition,” said Sandra Robinson, president of Incentive Travel House, which manages incentive travel programs for businesses. “What makes it special is the relationships you create on these trips. You can’t find those at the worksite or anywhere else.”

As president of Lester Lumber, which operates four Virginia lumberyards, Jim O’Brien knows firsthand the value of the travel incentive programs. It’s not unusual for wives of builder customers to call him on the phone to find out about upcoming trips, he said.

“We know them all, husbands and wives,” O’Brien said. “And we have customers who come back and socialize. The trips give us the relationships that we’re not going to get any other way.”

A recent HBSDealer reader poll asked readers whether they offer travel incentives to customers. The results from 101 responses:

• 
  51%: “No. That’s not our business — we’re lumber and hardware people.”


• 
  34%: “Yes. It’s a great way to build relationships with customers


• 
  15%: “We’re thinking about it.” Robinson wasn’t surprised by this.

“Whether it works or not, it’s hard to see the [return on investment] sometimes,” she said. “But we’ve had clients for over 28 to 30 years doing these trips. They feel that out of all their marketing dollars, even when we had the downturn in 2008, that was the one thing they kept.”

Victoria, Texas-based Zarsky Lumber has been using Incentive Travel House for more than 20 years, and the company has traveled all over the world with its customers in that time: Alaska, the Panama Canal, Canada, Paris, London, Costa Rica and beyond. About 100 people get together every year, and some customers have even been on board for every single trip.

Cally Fromme, VP of business development for Zarsky, said that one of the first things customers asked when they learned of Zarsky’s sale to Kodiak Building Partners was whether the travel incentive program would remain intact.

“They do business with us expecting that as a reward, and it keeps them very loyal to us,” said Fromme. “Because of the personal face-to-face interaction we have on the trip, they become our friends more than just customers. So it’s harder to sever relationships once you travel together every year. You spend time with someone on a chairlift, or whitewater rafting, and those are lifelong memories you’ve created together.”

According to Robinson, this relationship equity can often far outweigh the ROI on rebates and merchandise promotions.

Additionally, Robinson thinks these programs are becoming more common in the lumber and hardware business.

“It’s the most cost-effective marketing tool used by companies to increase market share, reward, motivate, encourage and, most importantly, create long-term relationships, goodwill and loyalty to the company that sponsors the trip,” she said.

Of course, attractive as this offer may be, it’s not a foolproof strategy.

According to Fromme, the key to making an incentive travel program work successfully is making sure it’s offered consistently, and making sure the trips are consistent in quality of execution and quality of location.

By failing to implement simple rules and guidelines, companies run the risk of falling flat with their efforts.

Robinson takes a slightly more practical approach: “The key to making incentive travel work is creating a simple and straight-forward (purchases versus reward/trip) program that will excite and motivate customers to purchase all materials with the lumber/hardware company and pay their bills on time,” she said.