The Incentive Research Foundation (IRF) recently released their annual “trends study”, identifying the top trends impacting the incentives and rewards industry. The IRF is a research foundation within our industry that conducts numerous, insightful research studies each year. Their annual trends study is typically the most sought-after white paper they publish.
Our business here at Brightspot is being impacted, both positively & negatively, by just about every trend mentioned in this study. You can read the entire IRF trends study here. However, in this blog post, my aim is to summarize the trends that are having the biggest impact on our business.
Thanks to a growing US economy and expanding global market, optimism in the incentives industry continues to be strong, increasing by almost 20 points according to the IRF’s net optimism score. This is reflected in budget increases for incentive travel, gift card and merchandise programs (collectively, non-cash awards). For incentive travel programs, the average spend per person has increased to $3,915.
Cost & Time Pressures Continue Too
While non-cash award budgets are on the rise, costs are unfortunately rising at a faster rate than these budget increases. According to the IRF, hotel, and F&B costs are increasing the fastest. Moreover, the limited supply and growth of incentive grade hotels require that hotel contracting be started earlier than ever before – which in most cases is contrary to the last-minute decision making most companies tend to make.
Program Disruptions Rise
Program disruptions come in many forms – weather events, flight delays, union strikes, Zika concerns, terrorism, and the like. According to the IRF, more than half of those surveyed indicated that their programs had encountered some form of disruption in the past year. The impact of these disruptions can cost anywhere from $10,000 to $100,000 on average. The need to mitigate these disruptions are also costly and can come in the form of additional on-site staffing, backup plans, and increased security measures.
Meaningful Merchandise Options
According to the IRF, electronics, sunglasses, and luggage are still in high demand by program participants. However, meaningful experiences such as individual travel packages (ex: “trip of a lifetime”) and experiential rewards (ex: Porsche driving experience) have grown over 20%. In other words, program participants don’t just want choices, they want meaningful choices. These types of awards can also offer greater trophy value, higher emotional connection, and increased loyalty.
Gift Card Momentum
Companies are using gift cards increasingly to incentivize their employees, channel partners, and customers. According to the IRF, both the rate of gift card usage and the annual spend on gift cards continues to gain momentum. There has been significant growth in the use of e-gift cards too. This is not surprising given the wide availability of merchants offering gift cards in retail stores and online. But sourcing gift cards from retail channels rather than from an incentive provider can prove more costly.
Whether you are looking to provide your program participants with travel, merchandise, or gift card awards, Brightspot can help. Our comprehensive reward solutions can provide meaningful, memorable, and motivating experiences for your reward earners.
We work hard every day to make our clients’ programs more successful, their jobs easier, and make them look good. We strive to be a bright spot for our individual customers and make their incentives the bright spot for their company.
For more information on how we can help you and your program be a bright spot for your organization, download our 12.5 Steps Incentive Program How-to Guide.