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Study Reveals Non-cash Incentives Market Strong

The non-cash incentives market is booming in the U.S., according to a recently-released study conducted by the Incentive Federation in partnership with Aspect Market Intelligence.

The goal of the study, which collected data from a national sample of nearly 2,000 business executives, was to estimate the current size and characteristics of the non-cash incentives marketplace. It found that 74 per cent of U.S. businesses spend $76.9 billion annually on incentive travel ($22.6 billion) and merchandise and gift cards ($54.3 billion) to reward employees, partners and customers.

The research also showed that smaller businesses ($1 to $10 million annual revenue), whose budgets may be tighter, accounted for half the market, spending $39 billion a year on incentive travel, merchandise and gift cards.

The study also revealed:

• 98 percent of businesses running non-cash incentive programs include merchandise or gift cards, spending $54.3 billion each year.
• 46 percent of businesses running non-cash programs include incentive travel, spending $22.6 billion per year.
• Non-cash employee awards are the most prevalent with 56 percent of U.S. businesses having programs, followed closely by corporate gift programs.
• Non-cash sales incentive programs are present in almost one-half of U.S. businesses, and non-cash customer loyalty programs are used in one-third, while only one-quarter of U.S. firms use non-cash channel programs.
• Gift cards are more frequently used for employee programs (88 percent) than for corporate gifts (55 percent), while merchandise is used relatively evenly.
• The incidence of all program types tends to increase with firm size.

“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 of Incentive Federation and president of The Incentive Research Foundation.

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