The Case For Incentives

One of the most frequently asked questions by PFI Marketing Partners is "What do you have that I can use to justify incentive programs?" The answer is we have several documents or "white papers" that may be helpful in justifying the use of merchandise incentives. The most useful information may be found in a document we've created that features industry statistics, including who is using incentives and how they are being used. The document also includes case studies with performance results information from a variety of industries. We also have program justification white papers for all employee programs, including safety and suggestion programs.  In addition, here are some interesting and powerful statistics that were recently featured at www.incentivesatwork.com, a new website dedicated to publishing and promoting information about the incentive industry and its positive impact on industries and business worldwide.

Fewer than one in four American workers is working at full potential; half of all workers do no more than directly asked, and 75% of employees say they could be more effective in their jobs, according to the Public Agenda Forum.

70% of unhappy customers abandon vendors because of poor service, according to the Forum Corp.

A 5% increase in customer retention can increase lifetime profits from a customer by 75 percent, according to The Loyalty Effect, by Frederick Reichheld.

65% of executives believe that incentive programs using travel and merchandise are more memorable than those using cash.

60% of executives believe that sources of merchandise and travel are more helpful in creating an incentive program than are sources of cash.

57% of executives believe that bonus payments are often regarded by employees as something they are due, according to the 1999 Incentive Federation Survey on Incentive Practices.

Every year, U.S. businesses spend more than $25 billion to motivate salespeople to sell, customers to buy, and all employees to work more effectively, according to the Incentive Federation. Yet surprisingly, few business executives have ever heard of the incentive business or received formal training in incentive programs.

Incentives are a part of everyday business. Who hasn't heard of frequent buyer programs, gift-with-purchase offers, sales contests, sweepstakes, or factory productivity programs? Yet these programs get scant coverage in business schools, books, and business publications. Although executives take for granted the need for expertise when using other business strategies, many somehow believe that anybody can develop an incentive program.

Read more articles from the August 2001 Newsletter>