pulse survey the incentive industry trends 2012 september 2012
TRANSCRIPT
P U L S E S U RV E Y
The Incentive Industry Trends 2012
September 2012
Background and Survey Purpose
Beginning in August 2008 it was decided that an appropriate topic for the 2008 Pulse Survey would be an incentive industry trends outlook for 2009 and with the continued economic conditions, also an appropriate topic for the trends outlook for 2012/2013.
Given that the Incentive Research Foundation (IRF) is charged with advancing the science of incentives, it surveyed industry professionals to obtain their opinions about the more salient trends affecting the industry during 2012/2013.
To this end, the IRF asked these professionals questions on trends with regard to incentive travel programs, merchandise non-cash programs, and budget changes forecast for 2012.
In addition to the current topic on industry trends, the IRF tracks core issues of continuing interest to the industry:
• The extent to which company financial forecasts influence incentive programs;• The effect of competitor reactions on company incentive programs; and• Sensitivity to others’ perceptions of company incentive programs.
2
Research Methods
Invitations to participate in this online survey were sent to 2461 incentive providers, suppliers to the industry and corporate incentive travel buyers.
• Buyer (Corporate planner, Incentive Company, Program Manager) (57.3%)• Supplier (i.e./ Hotel, Airline, DMC, Brand/Merchandise) (33.7%)• I am not involved in incentive programs (8.9%)
The 246 survey participants can be categorized1 as follows…
Data collection was conducted August 21st through September 4th, 2012.
3
1 This question was changed to segment the respondents into categories for logical question sequencing in Fall 2012.
Highlights: Core Issues
4
Findings indicate that the trends have stabilized this period compared to the previous four survey periods which indicated a strong positive upward trend for each of the core issues beginning in July 2009 – October 2010. The overall trends continue to remain lower than reported in 2008.The positive trend continues with respect to the perceptions of the company’s financial forecast influences the design and implementation of our incentive program(s) compared and the previous three survey periods.
Sep
-08
Oct
-08
Mar
-09
Jul-0
9
Nov
-09
May
-10
Oct
-10
May
-11
Oct
-11
Mar
-12
Sep
-12
30%
40%
50%
60%
70%
80%
90%
100%
84%86%
75%73%77%
81%
93%
74%
61%
68%
74%
47%
64%
31%
40%39%43%
64%
42%41%44%
49%
45%
75%
63%
52%
61%64%
69%64%
49%44%
48%
0.546
0.617
The company financial forecast influences the design and implementation of incentive programsCompetitors’ reactions to programs impact the products and services included in company incentive programsPerception of the Public significantly influences the design of our incentive program(s). *Perception of internal (non-incentive) stakeholders signif-icantly influences the design of our incentive program(s).
*Previously question was asked as; “Sensitive to perceptions of program extravagance to the extent that it would impact the type of company program awards and inclusions”
Current TopicIndustry Trends for
2011/20125
Incentive Travel ProgramsMerchandise Non-Cash
ProgramsROI – Budget Considerations
Perceived Impact of the Economy on Ability to Plan and Implement Incentive Travel Programs
6
Respondents in the current survey (September 2012) indicate they are less optimistic and consider the economy as having a less of a positive impact on their ability to plan and implement incentive travel programs when compared with the previous result in March 2012. (All positive 36% September 2012 vs. 60% March 2012)
• Strongly negative 0.7% March 2012 vs. 5.3% September 2012.
• All negative impacts 22% March 2012 vs. 36% September 2012.
In the coming year what impact will the economy have on your ability to plan and implement travel incentive programs? (N=151)
Mar
-09
Jul-0
9
Nov
-09
May
-10
Oct
-10
May
-11
Oct
-11
Mar
-12
Sep
-12
4 2 3 310 9 6
0 0
4 6 5 85 10
49 5
3
1828
61 50 40
19
51
38
4
6
11
7
8 16
9
18
20
43
51
38
1722 21
55
22
3143
18 155 5 4 7
15
No Answer Strongly Positive Somewhat Positive
Have No Impact Somewhat Negative Strongly Negative
Note: The response categories were modified in the May 2011 and the historical data was adjusted to reflect these changes.
Perceived Impact of the Current Air Transportation Environment of Incentive Travel
Programs
7
Most respondents (63%) have a negative perception of the current Air Transportation Environment and it’s impact on incentive travel plans.
• Significantly negative- 12% March 2012 vs. 13% September 2012.
• All negative perception- 71% March 2012 vs. 63% September 2012.
What impact does the current air transportation environment have on your incentive travel program planning?(n=151)M
ar-1
2
Sep
-120
20
40
60
80
100
0 03 25 8
2227
5950
12 13
No Answer Significantly Positive Slightly Positive
Have No Impact Slightly Negative Significanty Negative
Techniques Used In Coming Year To Enhance The Air Transportation Portion Of Incentive Travel Programs, What Component?
52% anticipate that “All costs for air transportation-related expenses”, are to be included components of Incentive Travel Programs in the coming year.
• 51% indicate that “Only Tickets” will be provided.
• 15% indicate that “Non-air options” will be included.
• 9% indicate that seating upgrades will be included.
• 7% indicate that “Airline club passes” will be included
In the coming year, do you anticipate any of the following changes will be made with regard to choices of incentive travel programs? Check all that apply. (n=151, multiple choice)
8
Airline club passes will be included
Seating upgrades will be included
Non-air options (train, bus, driving allowances) will be use)
Only tickets will be provided
All costs for air transportation-related expenses will be included
0% 20% 40% 60%
7%
9%
15%
51%
52%
Trending of Techniques Used To Enhance The Air Transportation Portion Of Incentive Travel Programs
The inclusion of both components has decreased slightly compared to the results reported in March 2012.
9
May
-10
Oct
ober
-10
June
-11
Oct
ober
-11
Mar
ch-1
2
Septe
mbe
r-12
0%
10%
20%
30%
40%
50%
60%
42%
28%32%
53%55%
51%52%
45%
22%
30%
56%
52%
Only tickets will be provided
All costs for air transportation-related expenses will be included
Anticipated Changes In Coming Year With Regards To Incentive Travel Program Destinations
Most of the respondents (45%) anticipate no change with respect to the program destinations for Incentive Travel Programs in the coming year.
• 16% indicate that they anticipate a change from “International to Domestic” with regards to the travel program destinations
• 15% “Will pick locations closer to “home” with regards to the travel program destinations.
10
From cruise to land
From domestic to international
From land to cruise
Will pick locations closer to "home"
From international to domestic
No change
0% 20%40%60%
3%
3%
4%
15%
16%
45%
In the coming year, do you anticipate any of the following changes will be made with regard to incentive travel program destinations? Check all that apply. (n=151, multiple locations)
Trending Anticipated Changes With Regards To Incentive Travel Program Destinations
There has been a significant decrease in program destinations from “International to Domestic” since 2010.
11
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2%4% 3%
1%
9%
3%
7%4% 5% 6%
11%
4%7%
15% 14%
10%
19%
3%
42%
28%26%
16%
23%
16%0.152
From cruise to land From land to cruise
From domestic to international From international to domestic
Will pick locations closer to "home"
Anticipated Changes In Coming Year With Regards To Incentive Travel Accommodations
21% percent of respondents anticipate reducing the “On-Site inclusions per participant” for the accommodations portion of Incentive Travel Programs in the coming year.
• 27% indicate “No Change”• 21% indicate the “Total number of
days/nights will be reduced”.• 18% indicate the “Number of rooms will
be reduced”• 12% indicate a “Change to “all
inclusive” pricing options”.
12
Don't Know
Number of room upgrades increased
Total number of days/nights increased
On-site inclusions per participant increased
Total number of rooms increased
Number of room upgrades reduced
Change to "all inclusive" pricing options
Number of rooms reduced
Total number of days/nights reduced
On-site inclusions per participant decreased
No change
0% 10% 20% 30%
1%
5%
5%
7%
9%
10%
12%
18%
21%
21%
27%
In the coming year, what changes, if any, will be made with regard to accommodations for incentive travel programs? Check all that apply.(n=151, multiple response)
Trending Anticipated Changes With Regards To Incentive Travel Accommodations
The “anticipated reduction” of both components with regards to hotel accommodations has decreased compared to the past two survey periods.
13
May
-10
Oct
ober
-10
June
-11
Oct
ober
-11
Mar
ch-1
2
Septe
mbe
r-12
0%
10%
20%
30%
40%
50%
60%
47%
40%
28%
41% 42%
21%
52%
15%19%
32%30%
18%
Total number of days/nights reduced Number of rooms reduced
Anticipated Changes In Coming Year With Regards To Sponsored Non-Meal Related Components
Nearly half (48%) of respondents anticipate No Change with regards to Sponsored Non-Meal Related Components for Incentive Travel Programs in the coming year.
• 32% indicate that Sponsored Non-Meal related components will be Reduced to some degree, and
• 21% indicated that Sponsored Non-Meal related components will be Slightly Increased.
14
Significantly increased
Slightly increased
No change
Slightly reduced
Significantly reduced
0% 20% 40% 60%
0%
21%
48%
30%
2%
With regard to the sponsored (paid by your company) non-meal related components such as airline tickets, transfers, gifts, etc for incentive travel programs, what changes will be made in the coming year? (n=151)
Anticipated Changes With The Involvement Of Procurement And Purchasing In Travel Incentive
Programs
Most of the respondents (44%) anticipate No Change with regards to involvement of procurement and purchasing for Incentive Travel Programs in the coming year, 51% agree that procurement involvement will increase by some degree in the coming year.
• 38% indicate that procurement and purchasing involvement will “Slightly Increase” in the coming year.
• 13% indicate that procurement and purchasing involvement will “Significantly Increase” in the coming year.
15
Significantly increase
Slightly increase
Remain unchanged
Slightly decrease
Significantly decrease
0% 10%20%30%40%50%
13%
38%
44%
2%
3%
In the coming year, do you anticipate the involvement of procurement and purchasing with regard to your incentive programs to…(n=151)
Anticipated Changes In Incentive Travel Program Budgets for This Year
Forty-eight percent (48%) of the respondents anticipate budgets for Incentive Travel Programs to “Remain Unchanged” this coming year.
• 21% indicate that budgets for Incentive Travel Programs will decrease by some degree in the coming year.
• 31% indicate that budgets for Incentive Travel Programs will slightly increase this coming year.
16
Significantly increase
Slightly increase
Remain unchanged
Slightly decrease
Significantly decrease
0% 20% 40% 60%
1%
31%
48%
18%
3%
In the coming year, do you anticipate budgets for incentive travel programs in general to… (n=151)
Trend Strategy For The Consideration Of Award Strategy Moving (Either Temporarily Or Permanently) From "Group Trips" To
"Individual Travel Packages"
The majority (73%) of the respondents do not anticipate changing (either temporarily or permanently) from "group trips" to "individual travel packages" in the coming year.
• A combined 9% indicate that the consideration of award strategy moving (either temporarily or permanently) from "group trips" to "individual travel packages“ in coming year to decrease.
• 18% indicate that the consideration of award strategy moving (either temporarily or permanently) from "group trips" to "individual travel packages“ to increase in the coming year.
17
Significantly increase
Slightly increase
Remain unchanged
Slightly decrease
Significantly decrease
0% 20% 40% 60% 80%
1%
17%
73%
8%
1%
With regard to planning and implementing incentive travel award programs, do you anticipate the consideration of award strategy moving (either temporarily or permanently) from "group trips" to "individual travel packages" to…n=151)
Geographic Region Chosen as “Destinations" for Incentive Travel Program(s).
53% of the respondents indicated that North America was their chosen region for Incentive Travel Destination programs.
• Top regional destinations include:• The Caribbean (46%)• Europe (41%)• Central America (16%)
18
Middle East
Not Applicable
Africa
South America
Asia
Central America
Europe
Caribbean
North America
0% 10%20%30%40%50%60%
4%
7%
10%
13%
16%
16%
41%
46%
53%
In the coming year, please indicate which geographic region you will choose as your "destinations" for your incentive travel program(s). (n=151)
Perceived Impact of the Economy on Ability to Plan and Implement Merchandise Non-Cash Incentive Programs
19
In September 2012, respondents continue to anticipate the impact of the economy to have a “positive” effect on their ability to plan and implement merchandise non-cash incentive programs potentially indicating a positive trend in the coming year.
• Negative impact 22% in September 2012 vs. 17% in March 2012 .
• No impact 28% in September 2012 vs. 31% in March 2012.
• Positive impact 50% in September 2012 vs. 53% in March 2012 .
Do you anticipate budgets for merchandise non-cash incentive programs in the coming year to…(n=124)
Mar
ch-0
9
July-
09
Novem
ber-0
9
May
-10
Octobe
r-10
May
-11
Octobe
r-11
Mar
ch-1
2
Septe
mbe
r-12
33 3320 15 13
3424
0 0
4 1
22 2
4
1
11 12
11 19
24 39 44
28
2442 38
1723
20
21 1920
2731
28
3119
27
23 2211
1816 20
5 5 70 2 3 6 1 2
No Answer Significantly PositiveSlightly Positive Have No ImpactSlightly Negative Signficantly Negative
Note: 2008 vs. 2009 percentages not comparable because “not involved” response category added in 2009 survey.
Note: The response categories were modified in the May 2011 and the historical data was adjusted to reflect these changes.
Anticipated Changes This Year With Regards To Merchandise Non-cash Incentive Programs Award
Selections
36% of the respondents anticipate “Increased merchandise award values” in the coming year with regards to Non-Cash Incentive Program Award Selections
• 16% indicate “No change” to the merchandise non-cash incentive program this year.
• 32% indicated “Included individual travel as an option”
• 31% indicated “Increased use of debit/prepaid gift cards”.
• 29% indicated “Added Merchandise”.• 27% indicated “Included experience-
related (SPA, event tickets, etc.)”
20
Decreased merchandise award value
No change
Decreased use of debit/prepaid gift cards
Added debit/prepaid gift cards
Included experience-related (SPA, event tickets, etc.) as an option
Added merchandise
Increased use of debit/prepaid gift cards
Included individual travel as an option
Increased merchandise award value
0% 20% 40%
13%
16%
17%
24%
27%
29%
31%
32%
36%
With regard to merchandise non-cash incentive programs, what changes,, will be made this year with award selections? Select all that apply. (n=75)
Merchandise Types Used Within Reward and Recognition Programs
Electronics (79%), Golf Items (68%), Luggage (66%) and House wares (62%) are the most common merchandise used in Reward and Recognition Programs.
• More than half of the respondents indicate they use:• Open Cards (59%)• Jewelry/Watches (58%)• Office Accessories (58%)
21
Flowers
Plaques/Trophies
Closed Card
Restricted Card
Food
Clothing/Apparel
Office Accessories
Jewelry/Watches
Open Card
Housewares
Luggage
Golf Items
Electronics
0% 20%
40%
60%
80%
100%
34%
38%
38%
42%
49%
49%
58%
58%
59%
62%
66%
68%
79%
What types of merchandise are you using within your reward and recognition program? Select all that apply (n=71)
Use of Points Based System for Merchandise Non-Cash Incentive Programs
A majority (82%) of the respondents indicate they use a points based system for their Merchandise Non-Cash Incentive program(s).
• 18% indicated they do not use a points based system.
• Compared with October ‘11, more respondents indicate the use of a “Points Based System” for Non-Cash incentive programs.
22
Yes82%
No18%
Pulse SurveyFall ‘12
Do you use a "points-based" system for your merchandise non-cash incentive program? (n=124) October-12 March-12 Sept.-12
0%10%20%30%40%50%60%70%80%90%
40%
74%82%
48%
26%18%
12%
0% 0%
Yes No Don't Know
Anticipated Changes In Non-Cash Incentive Program Budgets for This Year
Forty-four percent (44%) of the respondents anticipate budgets for Non-Cash Incentive Programs to “Slightly Increase” this coming year.
• 10% indicate that budgets for Non-Cash Incentive Programs will decrease by some degree in the coming year.
• 49% indicate that budgets for Non-Cash Incentive Programs will increase by some degree in the coming year.
23
Significantly increase
Slightly increase
Remain unchanged
Slightly decrease
Significantly decrease
0% 10%20%30%40%50%
5%
44%
41%
10%
0%
Do you anticipate budgets for non-cash incentive programs in the coming year to...(n=124)
Anticipated Changes Incentive Program Elements
In general, respondents indicated that they anticipate most incentive program elements to remain the same in the coming year.
• The “Number of total qualifiers” is the element that has the highest reported increase in the coming year at 41%.
• The following elements received “Increased” ratings of greater than 20% for the coming year:• Awards budget (36%)• Third Party/Incentive Company
involvement (23%)• Communications budget (22%)
24
Per diem cash allowances
Administration budget
Incentive program on-site gifts
Incentive program non-meal components
Third Party/Incentive Company management
Communications budget
Third Parth/Incentive Company involvement
Awards budget
Number of total qualifiers
0% 20% 40% 60% 80% 100%
5%
7%
12%
12%
12%
22%
23%
36%
41%
52%
73%
52%
54%
60%
64%
54%
49%
40%
14%
18%
22%
19%
18%
12%
12%
12%
12%
29%
2%
14%
14%
11%
2%
11%
3%
7%
Increase Remain the SameDecrease No Answer
This year, do you anticipate the following incentive program elements will increase, decrease or remain the same? (n=124)
General IssuesOf Interest to the Industry
25
Budget Changes for Incentive Program Elements
Impact on Incentive Program As A Result Of The Current Economic Conditions
51% of the respondents anticipate no changes to the budget for Incentive Programs in the coming year as a result of the recent economic conditions.
• 18% indicate that that budgets for Incentive Programs have been reduced as a result of the recent economic conditions.
• 18% indicate that budgets for Incentive Programs have increased as a result of the recent economic conditions.
• 12% indicate no budget change, but reduced the component and added or increased a merchandise incentive program component.
• 1% indicate the program has been eliminated entirely as a result of the recent economic conditions.
26
No budget change, but replaced the travel incentive
Eliminated the program entirely
No budget change, but reduced the travel component and added or increased a merchandise incentive program component
Increased the budget
Reduced the budget
No changes
0% 20%40%60%
1%
1%
12%
18%
18%
51%
As a result of the recent economic conditions, have you made a change to your upcoming incentive program, and if so have you… (n=141)
Impact of Budget Changes on Employee Morale
Aside from the respondents that indicated an increase in the budget for the coming year, in general, respondents indicated that changes to their Incentive travel program will have either a “decreased impact” or “remain the same” on Employee morale.
27
Reduced the Budget (n=25)
Increased the budget (n=25)
No budget change, but reduced the travel component (n=17)
No budget change, but replaced the travel incentive (n=1)
0% 20% 40% 60% 80% 100%
48%
0%
29%
0%
0.48
0.470588235294118
84%
24%
Increase DecreaseRemain Same Don't Know
You indicated that you have [inserted response on change to their program], what impact has this has on…
Impact of Budget Changes on Sales Results
The impact of budget changes on Sales Results indicate significant differences. For those that increased the 88% indicate an increase in Sales results. Conversely, those that reduced the budget or reduced the travel incentive portion, between 24% indicate that Sales Results have decreased.
28
Reduced the Budget (n=25)
Increased the budget (n=25)
No budget change, but reduced the travel component (n=17)
No budget change, but replaced the travel incentive (n=1)
0% 20% 40% 60% 80% 100%
0%
88%
6%
0%
24%
0%
24%
0%
76%
71%
Increase DecreaseRemain Same Don't Know
You indicated that you have [inserted response on change to their program], what impact has this has on…
Impact of Budget Changes on Profitability Results
The impact of budget changes on Profitability Results indicate significant differences. For those that increased the 88% indicate an increase in Profitability results.
29
Reduced the Budget (n=25)
Increased the budget (n=25)
No budget change, but reduced the travel component (n=17)
No budget change, but replaced the travel incentive (n=1)
0% 20% 40% 60% 80% 100%
12%
88%
29%
0%
28%
0%
24%
100%
60%
47%
Increase DecreaseRemain Same Don't Know
You indicated that you have [inserted response on change to their program], what impact has this has on…
Use of Enhancement Tools/Techniques for Incentive Programs
Many of the respondents (62%) indicate they use Social Media tool/techniques to enhance their incentive program.
• 48% indicate the use of CSR components.
• 36% indicate that they use Gaming techniques.
• 27% indicate that they use Integration with Sales Management Tools.
• 26% indicate that they use a Virtual elements component.
30
Virtual elements
Integration with Sales Management Tools (salesforce.com, etc.)
Gaming Techniques
CSR components (Corporate Social Responsibility)
Social Media
0% 50% 100%
26%
27%
36%
48%
62%
Are you using any of the following to enhance your programs? (Check all that apply) …(n=134)
Trending of Enhancement Tools/Techniques for Incentive Programs
While all components show decreases in the enhancement of incentive programs, “Gaming Techniques” had the only increase (6%) compared to March 2012 as an enhancement tool for incentive programs.
• Social Media, CSR components, Integration with Sales Management Tools and Virtual Elements each have significant decreases as enhancement tools when compared with October 2011.
31
Virtual elements
Integration with Sales Management Tools (salesforce.com, etc.)
Gaming Techniques
CSR components (Corporate Social Responsibility)
Social Media
0% 50% 100%
26%
27%
36%
48%
62%
31%
37%
33%
57%
74%
23%
14%
19%
44%
56%
October-11 March-12 September-12
Are you using any of the following to enhance your programs? (Check all that apply) …(n=176)
General Perceptions of the Coming Year
Most respondents (54%) perceive “The Economy” to be either Slightly or Extremely positive in the coming year.
32
Pre-Paid Gift Cards (n=181)
Incentive Group Travel (n=208)
Individual Travel (n=200)
Merchandise Awards (n=191)
The Economy (n=221)
0% 20% 40% 60% 80% 100%
14%
5%
7%
11%
5%
29%
40%
39%
40%
49%
39%
33%
38%
32%
18%
15%
17%
13%
16%
23%
4%
5%
3%
1%
6%
Extremely Positive Slightly PositiveNO Change Slightly NegativeExtremely Negative
As you look ahead to the coming year, what is your view of the following. (n=138)
• While the outlook on the Economy is generally “positive”, 29% of the respondents also indicate a “negative” perception of the economy in the coming year.
• In general, over 40% of the respondents perceive “Slightly Positive/Extremely Positive” views with respect to each of the areas measured.
Impact of 2012 Presidential Election on Incentive Program Planning for 2013 and Beyond
60% indicate they not changing the current plans for 2012 or 2013 because of the upcoming Presidential Election.
• 27% indicated that changes may be made next year (2013) based upon the process/outcome of the 2012 Presidential Election.
• 7% indicated that changes are planned to be made next year as a result of the upcoming Presidential Election representing the only significant change compared with March 2012.
• Only 6% indicated that changes have already been made to this years program because of the upcoming Presidential Election.
33
The upcoming Presidential Election has already caused changes to be made this year
Changes are planned to be made next year as a result of the upcoming Presidential Election
Changes may be made next year depending upon the process/outcome of the upcoming Presidential Election
Not changing our current plans, or next year’s, in any way because of the upcoming Presidential Election
0% 20% 40% 60% 80%
6%
7%
27%
60%
6%
2%
25%
66%
March-12 September-12
Which of the following statements best describes the impact the upcoming Presidential Election will have on your planning for 2013 and beyond?…(n=224)