A new study conducted by the Incentive Federation, in partnership with Aspect Market Intelligence, confirms that the non-cash incentives market is thriving with 74% of U.S. businesses spending $76.9
billion annually on incentive travel, merchandise and gift cards. Half of this market is driven by smaller businesses (between $1 million and $10 million in annual revenue), whose budgets may be
tighter, but whose total volume generates $39 billion annually, says the report.
A study of a cross-section of US businesses confirms that incentive travel, merchandise, and gift cards are popular
tools for firms seeking to reward and recognize their employees, sales teams and customers. U.S. businesses spend $22.6 billion annually on incentive travel and over $53 billion on merchandise and
gift cards to reward employees, partners and customers, the study reports. Key findings from the study include:
- 74% of U.S. businesses use non-cash rewards to recognize and reward key
audiences in the form of incentive travel, merchandise, or gift cards
- U.S. businesses spend $76.9 billion per year on incentive travel, merchandise, and gift cards
- 98% of
businesses running non-cash programs include merchandise or gift cards as a reward spending $54.4 billion each year
- 46% of businesses running non-cash programs include incentive travel as an
award, spending $22.5 billion per year
- Smaller firms account for half of the market based on the sheer number of these companies
- Non-cash employee awards are the most prevalent,
with 56% of U.S. businesses having programs, followed closely by corporate gift programs
- Non-cash sales incentive programs are present in almost half of U.S. businesses, and
non-cash customer loyalty programs are used in one-third, while one-quarter of U.S. firms use non-cash channel programs
- Gift cards are more frequently used for employee programs (88%) than
for corporate gifts (55%), while merchandise is used relatively evenly
Non-cash Employee programs are the most prevalent, followed closely by Corporate Gifts. Non-cash Sales programs
are present in almost one-half of U.S. businesses, and non-cash Customer Loyalty programs are present in one-third. Non-cash Channel programs are the least prevalent, with one-quarter of U.S. firms
reporting the presence of these programs. The incidence of all program types increases with firm size.
Incidence of Non-Cash Programs |
Weighted Total Incidence | % of Respondents |
Sales Non-cash Rewards | 46% |
Channel Non-cash Rewards | 26% |
Employee Non-cash
Rewards | 56% |
Customer Non-cash Rewards | 32% |
Corporate Gifts | 53% |
Source:
Aspect Market Intelligence/Incentive Federation, October 2013. To avoid bias, calculations exclude respondents from industry lists such as Incentive Magazine. Calculations are based to all U.S.
businesses, not just those offering non-cash awards. |
Concluding, the report says that the study findings confirm that the incentives market is very large
and thriving – the 74% of US businesses using incentive travel, merchandise, and gift cards spend $76.9 billion annually in this category. The market is largely driven by smaller businesses
(those between $1 and $10 million in annual revenue).
For additional
information about the Incentive Federation and to access the complete study with charts and graphs in PDF format, please visit here.