Incentive glossary
Incentive and loyalty programs come with their own vocabulary. Here is what the terms actually mean, and why each one matters when you are planning a program.
A structured offer of rewards for hitting a defined goal. Unlike a bonus, the rules and the prize are published in advance so people can decide to chase them.
Rewards aimed at customers rather than sellers, designed to increase how much of their total category spending comes to you.
A program aimed at people who sell your product but do not work for you: distributors, dealers, contractors and retail staff.
The annual trip or event for a company's highest achievers. Usually the most visible reward a sales organization offers.
A short, targeted push on one product or period. Fast to launch and useful for clearing inventory or supporting a launch.
Everyone who reaches a set level earns the reward. There is no fixed number of winners, so participants compete against a target rather than each other.
The published logic that converts behavior into reward: what counts, how much it is worth and over what period.
A personal target set above a participant's own prior-year result, so each person competes against their own history rather than a company-wide number.
Levels of achievement with different rewards. Well-built tiers keep mid-range performers engaged instead of conceding to the top few early.
The running balance a participant accumulates and later redeems from a catalog. Lets people save toward something they actually want.
The moment a participant exchanges points for a reward. Redemption rate is one of the clearest signals of whether a program is working.
Points earned but never redeemed. Some is normal, but high breakage usually means the catalog or the thresholds are wrong.
A trip earned through performance rather than bought. The qualification is what gives it its motivating power.
Someone who has met the criteria to earn the trip or reward.
Rooms reserved in advance at a negotiated rate for a group. Securing one early is usually what makes a destination affordable.
The contract term setting how many reserved rooms you must fill before penalties apply. One of the biggest financial risks in group travel.
Destination management company: the local partner who arranges transport, venues, guides and logistics on the ground.
A traveler's request to fly on different dates or routes than the group, usually to extend a trip or depart from another city.
The performance level before the program starts. Without one recorded in advance, any lift you claim afterward is guesswork.
Sales above the baseline that can reasonably be attributed to the program, rather than all sales during the period.
How much of a customer's total category spending comes to you. The central measure for most loyalty programs.
The share of eligible people who actively engage. Low participation usually points at the rules, not at the people.
Total program cost as a percentage of the incremental revenue it generated. The quickest read on whether it paid for itself.
Demand created further down the channel, such as a contractor specifying your product because of a reward they are working toward.
Still have questions
A short conversation is enough to sketch a program and a budget. There is no cost to plan.