This year appears to be looking up in regard to the incentive market. Incentive Magazine’s 2011 Sales IQ study reveals a number of promising statistics, first of which is a 40 percent boost in the respondents sales incentive budgets, compared to last year. In addition, over 65 percent cited that per recipient, this year’s incentive spending was up.
Of the 500 participants, 47 percent consisted of companies with fewer than 50 workers; 23 percent consisted of companies with 51 to 500 workers. Thirty-seven percent of all the respondents cited their companies had a yearly incentive budget of less than $10,000 for recognition and reward programs; 19 percent reported having an incentive budget of $10,000 to $50,000. And, a large majority, 75 percent, reported intentions of providing anywhere from one to five various sales incentive initiatives during 2011.
The survey also targeted major sales program goals. Results showed that major goals focused on increasing and/or maintaining sales, boosting employee morale, and acknowledging worker performance. Additional objectives are geared toward fostering customer loyalty, enhancing and/or maintaining market share, establishing new markets, and selling new accounts.
Along with the above, over 40 percent of the participants cited their company’s incentive initiatives are managed by a C-level executive, president, or CEO. Sixteen percent of the programs are handled by a sales VP.
Analyzing the individual programs, in-house sales employees are the focused target, according to 66 percent of the respondents. One form or another of merchandise comprised 41 percent of the programs’ employee rewards. Of the 41 percent: 27 percent were individual or group travel initiatives, 33 percent were gift certificates/cards from retailers, and 37 percent were in the form of cash.
Other survey respondent statistics include:
- Twenty-five percent cited feeling that cash is the best incentive
- Twenty-six percent cited supporting combo-incentives: a mix of gift cards from retailers, individual and group trips, merchandise, cash, practical rewards, and prepaid cards issued by banks
- Thirty percent intended on spending under $50 per reward recipient
Results pertaining to where and how respondents purchased reward incentives include:
- Thirty-nine percent find and purchase incentive rewards through catalogues
- Thirty-six percent cited using online vendors
- Thirty-five percent take advantage of a service provider or manufacturer
- Thirty-two percent purchase from retailers
- Twenty-one percent use a pay-it-forward incentive and buy from a reseller, or use an incentive house.
Incentive Magazine reported that one survey participant explained, “It can be difficult to purchase incentive rewards that are well liked by everyone equally."
This is the case with some of the merchandise rewards. Not all employees have the same likes or dislikes – a trip to a ski resort will not thrill someone who loves the beach. But, when it comes to non-financial rewards such as a ‘desired’ parking space or a day off with pay, most employees will appreciate the incentive.