Research among recipients of incentives and rewards shows that up to a whopping 70% of a Cash incentive or reward goes to pay bills, buy household items and other family members. In an automotive sales environment where 0% financing is seen increasingly as a customer 'right', getting away from cash as an incentive just makes good business sense!

Over and over research reveals the diminishing returns that Automotive dealers can look for from cash rewards or promotional items like cameras. The reason is not hard to find!

Automotive buyers are now conditioned to seek 0% financing and can directly price compare the retail value of the ‘goodies’ offered. The automotive dealer does not really get much credit.

Travel is becoming increasingly the incentive of choice for automotive businesses today. The flexibility of the travel incentive itself, the high perceived value to the consumer and the ease and speed of execution for the dealer are what makes this a smart choice.

Consider the following:

1. Cash has Poor Motivational Power. It has come to be viewed as a part of the base price of the auto, an entitlement that is aggressively compared between dealers. (Once this pattern of incentive is established, it becomes difficult to withdraw) For the employee, cash is often viewed as a normal part of compensation.
2. Cash or goodies have almost no Trophy Value You can't mount it. You can’t photograph it. You may not want to show it off, if you are going to use it to reduce debts. Cash or goodies have a very temporary association with the sale or performance improvement!
3. Cash provides little Personnel Fulfillment. Travel Incentives offer guilt-free enjoyment of a reward and can be shared with dependants; while cash is typically expended on short term needs or is laden with guilt. 'How do I spend it?' turns into 'How should I spend it?'.
4. Cash has diminished Promotional Appeal. A travel incentive has greater perceived value than cash. A tropical vacation for two that includes airfare, a luxury Caribbean or Alaskan Cruise with exotic ports of call, chilled champagne in the cabin, plus 4 star dining has significantly more appeal than an equivalent amount of cash.
5. Cash or goodies are an 'Expensive Use' of the Reward Budget. The cost to the business of a dollars worth of cash or an item like a digital camera is a fixed quantity and likely measured by the recipient. A combination of bulk-buy discounts, travel industry allotments and the sheer perceived luxury of a vacation experience, all ADD up to significant sense of value attached to the reward.
6. Cash has reduced Financial Impact. You can't buy performance nearly as well as you can motivate it. Dedicate 3-5% of yearly compensation to travel incentives and yield the same gains that 15% of compensation in cash rewards would produce. This amounts to a 3-fold increase in spending to achieve the same results* *Drawn from "People, Performance and Pay", American Productivity Center and American Compensation Association