In a year in which many of the responses to Incentive's annual "Merchandise IQ" survey were fairly similar to the previous year's, one thing stood out: a substantial decrease in the number of salespeople targeted by incentive programs that use merchandise awards.
Just 43.5 percent of the respondents said their programs were for salespeople, compared with 53.9 percent in 2013, a more than 10 percent drop. In 2014, 46.5 percent of merchandise incentive award programs were designed to increase sales, compared with 53.8 percent in 2013, representing a decrease of 7.3 percent.
Nor was there a corresponding increase in the number of other types of programs using merchandise incentives. Dealer/distributor programs, consumer/customer programs, and non-sales employee programs using merchandise were all nearly unchanged. Consumer/customer programs were the top overall users of merchandise incentives, with 50.2 percent of respondents using them.
Employee recognition remained the top objective of merchandise incentives, used by 59.4 percent of the respondents. This was followed by building customer loyalty (47 percent), increasing sales, employee and client gifts (46 percent), and building morale and job satisfaction (41.6 percent).
Though small overall, the number of companies spending more than $1,000 per recipient saw big percentage increases. Merchandise programs in which the recipient award budget was $1,000 - $1,999 more than doubled, to 1.8 percent from 0.7 percent last year. The number of programs spending more than $2,000 per recipient more than tripled, increasing to 4.1 percent in 2014 from 1.2 percent in 2013.
And merchandise incentive program budgets are growing compared to last year. The number of respondents who said their budgets rose in 2014 was 35.3 percent, compared to 31.8 percent in 2013, and the number whose budgets remained unchanged grew to 56.3 percent from 52.5 percent. And the number of respondents who decreased their merchandise incentive program budgets was 8.9 percent, about 40 percent fewer than the 15.8 percent who cut these budgets in 2013.