Incentive Use Trends Upward as Economic Conditions Ease

The recently released Pulse Survey from the Incentive Research Foundation (IRF), “Incentive Industry Trends 2011,” finds that economic indicators for the incentive industry have stabilized—and are on an upward track since the IRF’s last look at comprehensive trend data two years ago. Respondents predict that the incentive business will improve in both 2011 and 2012.

The IRF began exploring the outlook for incentive industry trends in late 2008, asking participants to consider anticipated economic conditions in 2009 on their business. Given the extended slowdown at that time, the IRF wanted to see how the industry outlook had since changed for 2011 and beyond.

Data was collected from 130 survey participants—including incentive providers, corporate incentive travel buyers, incentive suppliers, and others—from September 13 through September 30, 2010. Participants were asked specifically about trends related to travel programs, merchandise non-cash programs, budgets for 2011, and other issues of interest to the industry.

Key findings included:

Overall: 68 percent of Pulse Survey respondents predicted that business will be better for the incentive industry in 2011, with 77 percent saying it will be better in 2012.

Merchandise: 46 percent of respondents in October 2010 saw the economy as having a positive impact on implementation of noncash merchandise incentives compared to just 24 percent in November 2009. Likewise, only 24 percent saw the economy as having a negative impact, compared to 34 percent one year ago.

Travel: 55 percent saw the economy having a positive impact on implementing travel incentives compared to just 33 percent in November 2009. The negative impact factor decreased from 53 percent to 28 percent.

Merchandise budgets: 55 percent anticipated an increase, 10 percent a slight decrease, with only 1 percent registering a significant decrease.

Travel budgets: 44 percent of respondents saw an increase in budgets for travel for 2011, however 40 percent anticipated reduced number of days/nights per trips, 32 percent saw reduced number of rooms, and 37 percent were adding individual reward trips as an option over group travel.

Increasing procurement: Nearly two-thirds (64 percent) of participants agreed that corporate procurement departments will increase their involvement in travel program planning to some degree in 2011; 59 percent saw an increase on the merchandise side.

Gift cards: 41 percent of respondents expect to see increased use of debit gift cards as an award selection for merchandise programs in 2011.

CSR: 23 percent of respondents said customers request corporate social responsibility (CSR) components to reward programs “often” or “every time,” with 51 percent requesting it “sometimes.”

Social media: 58 percent respondents said they make use of social media to communicate with participants prior to an incentive or recognition program.

While the overall findings are positive for the industry, many participants believe there is still work to be done in terms of communicating the value of incentive programs to stakeholders and to the media. Only 11 percent of survey participants indicate that they feel the industry is “doing enough to demonstrate the business value of incentives,” while 55 percent agree that more case studies would assist in demonstrating the business value of incentives.

For a complete copy of the study, visit www.theirf.org.