Promo - April 2008 - (Page S3) INCENTIVES: $46 Billion Strong and Growing How important are incentives in today’s marketplace? Very, judging by the amount spent on them. U.S. companies shelled out $46.1 billion for incentive travel and merchandise in 2006, according to the Incentive Federation’s latest marketplace study. That’s a 71% increase from the $26.9 billion reported in the Federation’s last comprehensive survey in 2000. It includes $32.7 billion spent on merchandise and $13.4 billion on travel. A few revealing highlights: <According to the Incentive Federation, travel and merchandise incentives for consumers accounted for $12.6 billion, or 27% of incentives spending in 2006. Non-sales employee incentives totaled $14.65 billion (32%); sales incentives $11.7 billion (25%); business gifts $5.59 billion (12%) and dealer incentives $1.55 billion (4%). <Of the companies surveyed, 34% used travel or merchandise incentives last year. Broken down, 31% of those offered merchandise and 10% travel. <The PROMO’S 2007 PREMIUMS AND INCENTIVES SURVEY CONFIRMS THE ROBUST GROWTH TRENDS, SHOWING: 4 35.4% of companies use consumer/customer incentive programs (14% plan to create one within a year), and 28% use employee incentive programs. 4 Nearly half (48%) report that consumer incentive budgets will increase this year, and 43% report that employee incentive spend will increase. typical annual budget for merchandise incentives was $119,008, with nearly half of users spending between $100,000 and $500,000. <For travel, the average budget was $164,271, and more than threequarters of users spent between $100,000 and $500,000. <Nearly WHY THIS IMPRESSIVE GROWTH? Merchandise and travel rewards provide instant gratification, and have more impact than cash rewards. They also produce measurable results. They help companies achieve a wide range of goals, including higher revenue and market share, improved margins and profitability, better customer retention and greater brand differentiation. In the pages ahead, industry experts share the latest trends and advice on gift cards and branded merchandise incentives, plus insights on measuring and improving incentive programs’ all-important ROI. < 60% of merchandise incentive users and more than half of travel incentive users expect budgets to increase over the next few years. And more than a third of both groups said that budgets will, at minimum, stay the same. Headquartered in Naperville, IL, the Incentive Marketing Association is the leading voice of suppliers in the incentive marketplace. IMA provides education and information services, publications, conferences and seminars, and research to help businesses efficiently use incentives. Marketers can access research and resources via the IMA’s website (www.incentivemarketing.org). Also visit www.incentivecentral.org — a portal with valuable case studies, articles written by experts in the field, a guide to industry events and a full listing of incentive suppliers. For additional information on incentives, visit PROMO’s website (www.promomagazine.com) for a wealth of research, articles and case studies. SPECIAL ADVERTISING SUPPLEMENT S3 http://www.incentivemarketing.org http://www.incentivecentral.org http://www.promomagazine.com
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