American companies spent $46.1 billion
on incentives ($13.4 billion on travel and $32.7 billion on
merchandise) in 2006, according to research from the Incentive
Federation, a consortium of incentive associations. Conducted in
early 2007, the study was prepared by New York City-based GfK
Custom Research North America and involved phone interviews with
1,121 executives responsible for travel and merchandise
Among the key findings:
* A third of U.S.
firms used either travel or merchandise incentives last year.
* The average budget
for travel incentives was $164,271, and the typical budget for
merchandise incentives was $119,008.
* More than half of
the respondents from large companies (annual revenues of $100
million or more) said their budgets for incentive travel have
increased over the past two years, a trend they believe will
continue over the next two years.
* On the merchandise
side, 30 percent of respondents reported their budgets have
increased over the past two years, and 59 percent anticipate these
budgets will grow over the next two years.
* Incentive travel is
seen as an investment by 85 percent of those polled; merchandise
incentives are seen as an investment by more than three-fourths of
* Nearly half of large
companies use merchandise incentives; of those, 23 percent use
* The most popular
incentive travel application is for sales programs.
* Merchandise most
often is used for nonsales recognition and business gifts.
This study will be used as the
Federation’s new benchmark, since the methodology and some
definitions differed from those of earlier studies, according to
Frank J. Katusak, above, executive director of the New York
City-based Incentive Research Foundation.