As any consumer knows, American business has a love-affair with incentives. Almost everyone has received countless offers from some of the biggest names in American business and from some of the smallest, local shops: A Burger King sweepstakes tied to a new product launch; your credit card’s loyalty program; your bank’s incentives to open up new accounts or credit lines; your favorite airline or hotel chain points program; that sign-up incentive you received from your favorite magazine; continuity programs at your local supermarket that save you money on name brand merchandise; the free gift for agreeing to hear a sales presentation, or sign up for an e-mail newsletter. The variations are endless.
Industry estimates put the market for travel and merchandise incentives at about $29 billion in 2005, and that’s probably a conservative estimate. The promotional products industry alone, which has a significant overlap with the incentive industry, posted $18 billion in sales in 2005. According to the most recent Incentive Federation “Survey of Motivation and Incentive Applications,” 68 percent of the companies participating used incentives to support consumer promotions, specifically to:
- Increase sales
- Encourage pantry-loading
- Promote loyalty
- Promote permission
- Break through marketing clutter
- Target key audiences.
The use of incentives has proliferated in this new age in which businesses want to increase their use of target marketing and more effectively engage consumers over the long run – not only to buy more product, but to refer their friends and family.
Consumer incentive programs target not only individuals, but also target businesses and the people who buy products and services on their behalf.