Many incentive initiatives fall short when it comes to defining and analyzing measures of success, asserts a new study from the Incentive Research Foundation (IRF). The study, IRF's 2009 Vertical Markets Study, assessed approaches to and deployment of incentive programs and found that 79 percent of companies measure the success of their programs not in relation to program objectives, but rather in terms of incremental sales improvements.
"The difference between goals and measures of success points to a disconnect in business where the psychological and financial impact of incentives intersects," IRF Chief Research Officer Rodger Stotz said in a statement.
For its study, IRF analyzed incentive programs in six industries—electronic computer/component manufacturing, pharmaceutical preparation/manufacturing, new car dealers, telecommunications resellers, commercial banking, and insurance agencies and brokerages—and identified as the most important the following three incentive goals:
• Building customer loyalty and trust
• Starting new relationships
• Maintaining existing relationships
Only telecommunications resellers said they stressed "recognizing performance" and "creating new markets."
"There is an opportunity here for incentive program providers to help clients better define goals and measures that can then help justify budgets going forward," Stotz said.
Other key findings:
• Seventy-eight percent of companies do not use third-party incentive companies; of those, 68 percent said they had their own in-house capability.
• Twenty-two percent of companies reported increases for motivational meeting budgets.
• While half of incentive buyers are in sales and marketing, half are not; 28 percent are in field services/support, 8 percent in product design/management and 8 percent in other service management roles.
For more information about IRF's 2009 Vertical Markets Survey, or to download a PDF of the full report, visit www.TheIRF.org.