Incentra Insights

Sales Channel Incentives – A New Ballgame

Posted by David Chittock on Apr 1, 2015 11:50:00 AM

The Growth of Incentive Gift Cards


Recently, the IRF conducted a study into the meteoric growth of the incentive and gift card channel partner sales.  For over five years, merchandise and gift card incentives have been steadily building and show no signs of trending downward. During 2014, more than a third of planners increased their incentive merchandise/gift card budgets while less than 10 percent decreased them during this time. In 2015, the market is projected to continue to strengthen, with 44 percent of program owners increasing their budgets and a scant 6 percent decreasing them.

What’s Driving This Growth?


Incentive planners report that adding merchandise and gift cards to their compensation mix significantly increases sales over traditional cash only programs.  The estimated average per-gift cost of $195 for gift cards and $255 for merchandise shows corporations are more than willing to invest in these programs,  Not only chosen for their ease of use and flexibility, gift cards and merchandise are perceived to be much more rewarding.

It’s All About the Experience


Industry analysts agree we are moving toward an experience-based economy.  People are seeking experiences that are transformative and exceptional; goods and services are no longer enough. According to authors Pine and Gilmore, we are on the threshold of a new economic era in which all businesses must orchestrate memorable events for their customers and employees.  This trend is particularly applicable to sales people who see these type of awards as tangible results of their efforts and valuable personal experiences for them and their families. 


Why Gift Cards and Merchandise Work



The Incentive Gift Card Council (IGCC) recently listed ten reasons why merchandise and gift cards work better than cash as sales incentives:


  • Gift card purchases create a lasting reminder of achievement.
  • Employees tell each other how they redeemed gift cards.
  • It’s polite to mention non-cash awards.
  • Gift cards are not viewed as part of compensation.
  • Gift cards combine the benefits of merchandise with the benefits of cash.
  • Recipients don’t feel guilty treating themselves.
  • Gift cards are more likely to improve work performance:
  • The participant’s family is involved in selecting awards
  • There is a strong motivation to earn an award for one’s significant other or children.
  • Gift cards reinforce positive associations with sponsoring organizations.

The Advantage of These Type of Incentives


The IGCC identified the following advantages in the use of merchandise and gift cards as incentives:

  • Gift cards give the recipient a wide choice of options for redemption, so reward possibilities abound, allowing the recipient to select the most motivational award


  • Gift cards are easily incorporated into point-tracking programs where award levels are tracked and awards issued almost instantaneously


  • Recipients can store points or value on their card until they’ve found the reward that most suits them and their families.


  • For many people and for their families in particular, half the fun of receiving an award is shopping. Recipients can share the experience with their families by involving them in the reward selection and ultimately the reward itself

Implications for Sales Managers


It seems pretty clear from all these statistics that merchandise and gift cards are the way go for sales incentives.  If you haven’t adopted them yet, you may want to give them another look. The IGCC reports that over 70% of organizations use some type of gift cards as rewards for customers and employees.  If it’s a new ballgame, you better make sure you’re in it!

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Categories: Sales Incentives