Incentives Market Driven By Small Businesses
$22.6 Billion Spent Annually
A new study released this week by the Incentive Federation (IF) shows that 74% of U.S. businesses – including many small firms – spend money each year on incentive travel, merchandise and gift cards for employees and customers. Overall, U.S. companies spend $22.6 billion annually on incentive travel and more than $53 billion on merchandise and gift cards, largely for rewards or similar campaigns. The latest research also now shows that about half ($39 million) of the incentives market is driven by smaller businesses (less than $10 million in annual revenue).
"This study reaffirms that the use of non-cash incentives has been and continues to be an important part of many businesses' growth strategy, even in light of recent economic challenges," said Melissa Van Dyke, research chair for the Incentive Federation.
Data revealed that 98% of businesses running non-cash incentive programs include merchandise or gift cards in their offerings. Non-cash employee awards are the most prevalent with 56% of U.S. businesses providing programs, followed closely by corporate gift programs. Gift cards are more frequently used for employee programs (88%) than for corporate gifts (55%), according to IF research, while merchandise is used relatively evenly.
Conducted by the Incentive Federation in partnership with Aspect Market Intelligence, the study collected data from a national sample of nearly 2,000 business executives.