Research Confirms Incentive Market on the Rise

The Incentive Federation has released a study which confirms incentive programs among business in the United States are on the rise. Since the Incentive Marketplace Estimate Research Study was last compiled in 2013, the non-cash incentive market has grown by 17 percent to $90 billion in annual spending. Each year, businesses spend $14.4 billion on incentive travel and $75.6 billion on award points, merchandise and gift cards to employees, partners and customers.

Nearly 1,400 business executives participated in the national study, conducted in partnership with research firm Intellective Group. It found that a third of the incentive marketplace is driven by small businesses with up to $10 million in annual revenue. They generate a total of $29 billion a year in spending on incentives. Larger organizations with up to $100 million in revenue accounted for 84 percent of total expenditures.

“This study reaffirms that the use of non-cash incentives has been and continues to be an important part of many businesses’ growth strategy,” said Melissa Van Dyke, co-chair of the Incentive Federation and president of The Incentive Research Foundation. “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.”

Highlights from the Incentive Marketplace Estimate Research Study:

Employee rewards and corporate gifts are the most common forms of non-cash incentives, with 72 percent of businesses having one or both types of programs.

Non-cash sales incentive programs are present in three out of five businesses; non-cash loyalty programs are used in 45 percent of firms; 41 percent use non-cash channel programs.

Gift cards are the most prevalent form of reward in all programs, except customer loyalty. Trips and travel is most frequently used with sales programs and least often within customer loyalty. Merchandise use is highest for channel programs.

Organizations, regardless of their size, increased their use of non-cash incentives by 36 percent from 2013 to 2015.

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