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New IRF Spring 2012 Pulse Survey Shows Recovery, Stability of Incentive Industry


By: 
Date: June 27 2012

St. Louis – June 27, 2012 – In the results of its Spring 2012 Pulse Survey conducted in March, the Incentive Research Foundation (IRF) provides a snapshot of the current state of the incentive industry and the key issues that determine its health and well-being.
 
Looking back over the last two years, researchers polled industry professionals on the economy, budgets, program elements and trends, discovering a generally positive outlook and slowing of reductions and cutbacks implemented in response to economic downturn and media pressure.
 
General Trends:
Economic recovery is being felt in program planning and implementation. In October 2011, 62% of respondents said the economy would have a negative impact on their ability to plan and implement travel incentive programs. That number had fallen dramatically to 22.7% by March of this year. For merchandise/noncash programs, the percentage that say the economy is having a positive impact more than doubled since October, from 25% to 53%. Moving forward, 73% of respondents say their general perception of the economy in the coming year is positive.
 
Budgets have stabilized. When asked about the impact of current economic conditions on incentive program budgets, 15% of respondents said their budgets actually increased and nearly half said no changes have been made, while 23% said budgets were reduced. Concerning the rest of 2012, most respondents say travel incentive budgets will stay the same (49%) or increase slightly (36%). For merchandise/noncash programs, the figures are 41% and 44%, respectively.  
 
Procurement/Purchasing ‘gatekeepers’ are the new normal. In recent years, many companies have implemented policies where all incentive program costs have to be reviewed and approved by the Procurement/Purchasing department. When asked whether the involvement of Procurement and Purchasing with regard to incentive programs will increase, decrease, or stay the same in the coming year, 42% of respondents said their involvement will remain unchanged, while 53% say it will increase to some degree.
 
 
Incentive Travel Trends:
The move from international to domestic destinations has slowed dramatically and seems to have leveled off. From a high of 42% in May 2010, the trend toward switching from international destinations to domestic destinations in order to cut incentive travel costs has become less pronounced. In March of this year, only 23% of respondents said they were planning such a change, which looks to be more in line with numbers from October 2010 (28%) and June 2011 (26%), indicating a leveling off trend.
 
Changes in the numbers of rooms and/or days booked for incentive travel programs have also leveled off. After some wild fluctuations in 2010 and early 2011, 30% to 40% of respondents seem to agree that reductions in the number of days and the number of rooms will continue in the coming year as planners attempt to keep program costs under control.
 
Dueling trends in air transportation costs will continue. Until recently, incentive travel programs typically included all air transportation-related costs (e.g., transfers, ground transportation, driving, parking, seating upgrades, and FF club memberships). But in the past two years many companies have decided to only provide airline tickets and to have recipients absorb any related costs. Although both these policies remain popular, the ‘tickets-only’ trend has become more prevalent in the past year, hovering between 53% and 55%.
 
Incentive Merchandise Trends:
Individual travel and debit/gift cards are increasingly being incorporated into merchandise/noncash incentive programs. Approximately one-third of respondents anticipate including individual travel (33%) and increasing the use of debit/gift cards (32%) in their incentive program award selections in the coming year.
 
Points-based programs are gaining in popularity. Between October 2011 and March 2012, the percentage of respondents indicating they use a points-based system for their merchandise/noncash incentive programs rose from 40% to 74%.
 
Technology & Social Trends:
CSR, social media and gaming techniques are increasingly being used in incentive programs to inform and engage participants. When asked what tools/techniques they use in conjunction with incentive programs, 74% said they incorporate social media, and 33% use gaming techniques. In addition, 57% said they regularly add a corporate social responsibility (CSR) component to their incentive programs in order to give something back to the communities they serve.
 
 
About the IRF:
The Incentive Research Foundation (www.TheIRF.org)  funds and promotes research to advance the science and enhance the awareness and appropriate application of motivation and incentives in business and industry globally. The goal is to increase the understanding, effective use, and resultant benefits of incentives to businesses that currently use incentives and others interested in improved performance.
 



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