According to the 2009 Promo Premiums and Incentives survey from Promo Magazine, 38.6% of the companies polled in this year's survey said they offer a promotional incentive program to customers or
sales prospects, down slightly from the 42.1% who ran such programs last year.
That slippage in promotional program offerings was echoed through three of the four industry verticals tracked in the
survey:
- 48.6% of goods manufacturers polled in 2008 ran a customer incentive program, but this year, only 42.4% of those respondents said the same. (9% in this category
"do not know")
- Retailers offering customer incentives declined to 50% of respondents this year from 52.9% in the last survey
- Marketing agencies offering such
programs slid from 34.3% in 2008 to 31.9% this year
- Providers of branded services showed a slight increase in customer incentives in this year's survey, up to 50% from
47.5% last year.
60% of those with no current incentive program for customers said they had no plans to offer one in the next year, says the report. 17% would launch a premium program,
and 22% are undecided. A vertical look at those who say they'll institute such a program in the coming year shows that goods manufacturers dominate (25%), followed by retailers (21.4%).
The largest proportion of respondents to this year's Promo P&I Survey (15.5%) said they expect to spend less than $5,000 on customer promotions this year, comparable to last
year's result of 13.6%. However, while the 2008 P&I Survey found only 6.4% forecasting $5,000 to $24,999 for premiums, this year the $5,000 to $24,999 category almost doubled to 11.8%.
And marketers expecting to spend $25,000 to $99,999 more than doubled to 6.4%, equal to the percentage who expect to spend nothing this year.
Looking at 2009 spending projections by
verticals:
- Last year 17.6% of goods manufacturers surveyed said they expected to spend $100,000 to $249,000 on customer incentives, while 5.9% anticipated spending $25,000
to $99,999.
- This year only 7.1% of goods makers say they will spend the higher amount, while 14.3% expect to keep their premium spending in the lower bracket
- Manufacturers
predicting premium spending of less than $5,000 grew from 11.7% in last year's survey to 21.4% this time around
- In 2008, 15.8% of service providers polled said they would spend
$5,000 to $24,999; this year only 9.5% said the same
- Retailers expecting to keep promotional spending below $5,000 grew from 16.7% in the 2008 poll to 35.7% this year
More than 50% of respondents answered that they "do not know" how much their companies will spend on customer incentives this year, higher than the proportion in past surveys who were
unable to project spending. Possibly indicating that marketers are keeping the door open for incentives launched on the fly as needed to stimulate business during the second half of 2009, posits the
report.
Poll respondents were less optimistic than a year ago about what will happen to incentive spending in 2010. This year about a third said they expect their budgets for customer premiums
to grow, less than the 38.5% who foresaw budget growth in the 2008 poll. The numbers who expect budgets to stay flat year to year were almost identical. But those who expect to spend less on customer
premiums in 2010 increased to 17.3% of the response group, from 7.7% in the last survey.
Gift cards rank as the top giveaway among almost one-fourth of respondents, about the same proportion
as in 2008. But this year dining and entertainment vouchers and certificates turned out to be the second most popular reward format, with just more than 10% of the respondents naming them as their
preferred form of customer incentive.
Hard cash dropped far down in popularity as a premium, with only 10% of those polled dolling out money as an incentive, off from the 15.4% who opted for
dollars in 2008. Gift certificates, travel, and refillable stored value cards remained fairly steady.
Last year, 44% of respondents said that they hand out premiums at events or on marketing
tour campaigns, while only 25% of those brands polled said they distribute premiums in that way,
The apparent pullback from live events as distribution channels plays out across the vertical
segments in this year's poll.
- Goods manufacturers said last year that 41.2% of them handed out premiums at these events; this year, that proportion is only 28.6%
- Service providers handing out premiums through events and tours dropped from 52.6% last year to 28.6%
- Retailers using events and tours to incentivize customers fell
from 38.9% in 2008 to 14.3% in this year's study
- Marketing agencies were off more than half, declining to 23.3% this year from 54.2% in 2008
- Premiums handed out
at retail saw an increase of almost five percentage points
51.8% of respondents cited incremental sales as their measure of return on investment from their customer incentive programs,
off from the 60.4% last year who looked to sales growth to validate their premium spending. In the place of incremental sales as a measure of promotional performance, long-term or lifetime value
increased slightly to 27.3%.
The number of marketers polled who report incentive programs within their own companies has dropped from about one-quarter last year to one-fifth this time. And
only about 10% of the holdouts say they plan to launch a workplace rewards program in the coming year. Notably, notes the study, more marketers say their companies are using incremental productivity
and employee attitude surveys as gauges for the impact of their internal incentive programs.
For more information about the study, please visit Promo Magazine here.