by Leo Jakobson | April 04, 2012
Despite a better economic and business climate, demand for incentive merchandise remains mostly conservative, although there are a couple of encouraging signs, according to Incentive’s 2012 Merchandise IQ survey. The merchandise budgets of more than half of the 381 survey respondents are where they were last year, while purse strings at most organizations remain under $10,000 and under $50 per recipient. 

A heartening trend is the rise in the percentage of respondents who reported slight budget increases (up to 9%), and the bracket of respondents holding up to five percent more spending dollars this year ranks second, behind only those who are working with same-size budgets. Still, the percentage of program managers who are working with 50 percent fewer dollars this year is notably higher, too. 

For every six out of 10 program managers, merchandise awards represent 10 percent or less of their overall annual incentive budgets, which means that there is still a lot of the spend pie left for merchandise suppliers to capture at organizations using rewards and recognition. To grab more of that pie, suppliers will have to reach the C-suite, as more than one-third of respondents said the CEOs, COOs, or CMOs of their companies handle the programs.  

In another promising sign, organizations are being thankful, as they award their non-sales personnel (41.3%) almost as much as salespeople (50%) this year. Employee recognition ranks highest this year as a reason for using merchandise awards. And survey respondents pointed out that building morale and job satisfaction (44.7%) is nearly as important as increasing sales (52.2%) and building customer loyalty (50.8%) this year at their organizations.  

For 2012, food and beverage awards are noticeably more popular among program managers, ranking second—just behind apparel—in the types of awards they choose to offer program participants. Electronics up to $500, cameras, office accessories, watches and clocks, entertainment software, and fine-writing instruments continue to be merchandise mainstays. Managers also are handing out a healthy number of plaques and trophies. 

Somewhat surprisingly, more than half of the respondents view brand names as “somewhat important,” while the greatest factors influencing their purchasing decisions are price point and the perceived value of merchandise. 

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