Spending On Incentives Hits $46 Billion!
travel and merchandise incentives reached $46.1 billion in 2006,
according to a new benchmark study by the Incentive Federation. The
study, conducted earlier this year, is based on responses from 1,212
U.S. companies handled by GfK, a marketing research organization.
The full report will be released next month.
Of that, about
$32.7 billion was spent on merchandise, or items used as part of an
incentive or recognition program targeting employees, sales people,
customers, distributors, dealers or consumers, and the study found
$13.4 billion was spent on travel.
promotions were the most popular type of incentives, representing
about 27% or $12.6 billion of all spending in incentive travel and
merchandise last year. Non-sales employee recognition with
merchandise placed second, accounting for 25% or $11.35 billion.
Sales incentives (using travel) made up 14% or $6.6 billion, while
business gifts totaled 12% or $5.59 billion.
categories included: sales incentives (merchandise) 11% or $5.1
billion, non-sales employee recognition (travel) 7% or $3.3 billion,
dealer incentives (travel) $800 million, and dealer incentives
(merchandise) $750 million.
Overall 34% of
companies used either travel or incentives last year. Of those, 10%
used travel while 31% favored merchandise as motivators. Companies
earning revenue of more than $100 million were more likely to use
travel and merchandise incentives than smaller firms.
The primary use
in the travel category was sales incentives (81%) followed by
non-sales employee recognition (58%), consumer promotions (52%),
dealer incentives (36%), and business gifts at 20%. In merchandise
incentives the breakdown was non-sales employee recognition (80%),
business gifts (66%), consumer promotions (53%) sales incentives
(34%), and dealer incentives (17%).