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The word is out. There’s steady growth in the incentive industry, according to “A Study of the Incentive Merchandise and Travel Marketplace” conducted with 8,000 sales, marketing and human resources executives from a cross section of American businesses by the Incentive Federation at the end of year 2000. But there’s plenty of room for further growth, the study shows. Total expenditure for merchandise and travel items used by U.S. companies for incentive programs increased to $26.9 billion last year from $22.8 billion in 1996. The study also found that there’s a 6% increase in the number of responding companies that say they use incentives--from 26% in 1996 to 32% this year.
Of the 32% of respondents using merchandise or travel, 64% of the responding companies use merchandise and/or travel as sales and other incentives for sales management and internal/outside sales forces, dealer and distributor personnel and independent sales representatives. This year “business gifts” was added as a category.
Key findings and target opportunities
Thirty-seven percent (37%) of the survey’s respondents using incentives have acquired motivational items from a promotional products distributor within the past 12 months. Thirty-six percent (36%) purchased from a local retail store or direct from manufacturer followed by 35% from an incentive company/incentive house. Thirty percent (30%) purchase from a corporate travel agency. Fifteen percent (15%) have used the Internet for motivational programs.
Eighty-three percent of respondents had a Web site for their organization, but only 16% used incentives to build traffic to it, concluding that this could be a whole new market to tap for incentive suppliers to pitch and develop incentive programs. Additionally, the Internet is also an untapped area for the incentive industry overall, with only 15% of respondents using it. Of this group, 48% used it to source incentive vendors/suppliers-a key reason incentive suppliers could consider and developing their own Web presence. Other common uses included communicating a program to participants (31 percent), purchasing merchandise or services (30 percent), and obtaining information on creating an incentive program (26 percent).
In 1999, the Incentive Federation requested that the Center for Concept Development conduct focus groups with incentive users in the New York, Los Angeles, Dallas, Chicago, and Atlanta areas. The purpose of this qualitative research was to identify issues regarding the following:
In 2000, the Incentive Federation requested that the Center for Concept Development execute the second, quantitative, phase of this research. This research consisted of a mail questionnaire sent to 8,000 executives in a cross section of American enterprises on a national basis. The questionnaire, designed by Ralph Head & Associates, was sent with a $1.00 bill and a postage-free return envelope and reflected issues that were learned in the focus groups conducted among incentive users in 1999. A test mailing of 1,000 was made to ensure that the desired results would be obtained. Once it was determined that the desired results would be obtained the full mailing was made. The mailing was sent to Sales, Marketing and Human Resource executives in organizations where such titles existed. In others it was sent to the ranking individual (President, owner, etc.), but in all cases it was sent to an individual and not just a company name. The names were provided by Dun & Bradstreet. Of the 8,000 questionnaires mailed out, 315 were returned as non-deliverable resulting in a net mailing of 7,685. When the mailing was closed for tabulation on November 18, 2000, 808 useable returns had been received. Subsequent to the close 27 additional questionnaires have been received bringing the total return to 835. |
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