That slippage in promotional program offerings was echoed through three of the four industry verticals tracked in the survey:
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:
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.
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.