Incentive Federation Releases More Info From Industry Study
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The study estimates that the industry has grown to $176 billion in annual spending, up from $27 billion in the 2000 study.The recent Incentive Federation industry study highlights the tremendous opportunity and challenge facing the Incentive, Rewards, and Recognition (IRR) industry: the estimated dollars spent on non-cash awards exceeds by a magnitude of 10X or more the amount of estimated combined revenue of all industry recognition, loyalty, incentive company, gift card, etc. companies in the industry. One can only conclude that the remainder of the business is sold through consumer retail channels because of the low-level of IRR industry awareness.
See RRN: IFI 2022 Study Pegs IRR Industry at $176 Billion
Of the estimated $176 billion spent on incentives, rewards, recognition, incentive travel and corporate gifting in the US, gift cards, including e-cards, are the most generally used of all non-cash rewards, according to the study. Award point programs are the second most frequently used form of non-cash awards, followed by travel for sales and channel incentive programs, with brand name and logoed merchandise most prevalent for client gifts. Two thirds of companies with revenues of more than $1 million annual reported using brand-name and/or logoed merchandise for business gifting. It is quite possible that much of this is purchased through retail channels.
The estimates are based on a national sample of 1,000 business executives responsible for non-cash incentive programs in companies with at least $1 million in sales. Companies with revenues from $1 million - $10 million represented 91% of businesses in the overall sample. The study was conducted by Richard Garlick & Associates.
The study also found plenty of room for growth for the use of non-cash rewards:
- 55% of businesses using sales programs and 70% of companies with employee programs use non-cash rewards.
- Non-cash customer loyalty programs are used in 55% of firms, while 48% of companies use non-cash channel/distributor/partner programs.
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