U.S. Businesses Spend $176 Billion on Incentives, Recognition, Rewards, Incentive Travel and Corporate Gifting New Incentive Market Study Shows
A new Incentive Marketplace Estimate Research Study released by the Incentive Federation, Inc. (IFI) reveals that 84% of U.S. businesses spend $176 billion annually on award points, gift cards, trips and travel, merchandise, and experiential rewards to reward sales staff, employees, channel partners and customers.
IFI’s study shows the non-cash incentives market grew a remarkable 49% since the last market estimate study in 2016. In addition, 92% of companies with revenues of $5 million or more use at least one form of non-cash incentive program. Gift cards, including digital gift cards, are most prevalently used in all programs, with Award Points the second most used in three of four program types. Trips and travel are used as rewards in sales incentive programs and channel/distributor/partner programs more often than in the other targeted types. Branded Merchandise and logoed merchandise are the most prevalent uses for client gifts, which are used in 75% of companies with more than $1 million in revenues.
The Incentive Federation conducted the survey in partnership with Rickard Garlick & Associates Consulting and Market Research Services. Data was drawn from a national sample of 1,000 business executives responsible for non-cash incentive programs in companies with at least $1 million in revenues.
The study also revealed:
- Companies with revenues from $1 million - $10 million represented 91% of businesses in the overall sample.
- Non-cash sales incentives and employee rewards are the most prevalent forms of non-cash incentives, with 55%of businesses using sales programs and 70% of companies having employee programs.
- Non-cash customer loyalty programs are used in 55% of firms, while 48% of companies use non-cash channel/distributor/partner programs.
“This study reaffirms that the use of non-cash incentives has been and continues to be an important part of many businesses’ growth strategies. The growth in the use of non-cash incentives is an important signal that U.S. businesses value tangible incentives over simply using cash to recognize performance and loyalty,” said Mike Donnelly, Chair of the Incentive Federation and President of Hinda Incentives, a Chicago-based incentive solutions provider.
“The Federation’s research in 1996 revealed that only 26% of U.S. businesses were using non-cash incentives, and our 2000 research reflected a $27 billion marketplace,” said Steve Slagle, The Federation’s Managing Director. “The growth in the marketplace over 25 years is certainly gratifying and a tribute to the excellent work by the industry’s companies to educate businesses about the value of all forms of non-cash incentives.”
The study was made possible with major assistance from: the Incentive Marketing Association, the Incentive Research Foundation, the Promotional Products Association International, and a host of corporate sponsors that include:
Major Corporate Sponsors: Blackhawk Network, E2E Group, GiftNow, Hinda Incentives, Inspirus/Sodexo Benefits and Rewards Services, Marketing Innovators International, Inc., Promotion, Incentive & Engagement Professionals, RepLink/The DataDirect Group, Tango Card
Contributing Sponsors: All Star Incentive Marketing, Citizen Watch America, Fujifilm North America, Seiko Watch of America
Contributor Sponsors: Enterprise Engagement Alliance, Logos Communications
About The Incentive Federation, Inc.
Founded in 1984 to focus on government affairs, the Incentive Federation continues to educate state and federal governments and agencies and has been successful at providing constructive input into tax laws related to the treatment of qualified noncash rewards, in helping OSHA see the benefits of safety incentive programs when writing related regulations, and in helping federal regulators understand that financial institutions have legitimate uses for premiums and incentives. An alliance and umbrella industry organization of associations and corporations involved in various aspects of the incentive marketplace, the Federation has expanded into three related domains: corporate outreach, education, and research. The mission is to Promote, Protect and Advance the broad incentive marketplace. More information can be found at: http://www.incentivefederation.org.
IMA Webinar: IFI Marketplace Research Study
August 25, 2022 • 11:00 AM CDT / 12:00 PM EDT
IMA members will get an exclusive look into this study, learn new trends, and find out how the industry is evolving. Not an IMA member? Join today!