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September 2016


Report: Small Biz Uses Merchandise to Motivate

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A new survey of small businesses reveals high levels of success with merchandise incentive programs. Small businesses believe that merchandise incentives, including apparel, food and beverage, and electronics, improve morale (82 percent), are an effective motivator (80 percent) and are more memorable than cash rewards (61 percent).

"The IMRA Small Business Merchandise Study," produced by the Incentive Manufacturers and Representatives Alliance (IMRA) through a grant to the Incentive Research Foundation (IRF), examined how the small business market used merchandise reward incentive programs for salespeople, employees, distributors and customers. Small businesses were defined as companies with between $1 million and $50 million in annual sales, which represented more than $16 billion in merchandise spend.

Some of the findings include:

  • The vast majority of small businesses reported using merchandise for reward/recognition of employees (89 percent), salespeople (87 percent), distributors (83 percent) and customers (80 percent).
  • Small businesses provide top merchandise rewards for a variety of objectives, including customer gifts (60 percent), top performers (59 percent) and sales quotas (53 percent).
  • Small business using merchandise to motivate key partners tend to be in good health: 72 percent report growth in the past year.
  • Nearly half (47 percent) of small businesses using merchandise have budgets of $10,000 or more, and many report their budgets are increasing.
  • Many different types of merchandise are used, and the top types of merchandise used by small businesses are apparel (76 percent), food and beverage (70 percent), electronics (58 percent), writing instruments (57 percent) and sporting goods (53 percent).
  • Personalization is key to small business rewards. In-person presentation of merchandise rewards (at company meetings and functions, or on the spot) are most preferred (70 percent).
  • Most small businesses often source the merchandise they use for rewards online (76 percent) and/or from retailers (61 percent).
  • Small business owners are generally unfamiliar with the services and advantages a merchandise representative can provide, such as below-MSRP pricing.

"The research demonstrates that merchandise incentive programs are an effective business practice for small businesses," said IRF President Melissa Van Dyke. "Both IRF and IMRA have a wealth of research, benchmarks and best practices that can help small businesses create new incentive programs or enhance existing programs."

IMRA President Ted Moravec said the study results are important to helping IMRA better understand the preferences and priorities of small businesses. "Our IMRA merchandise representatives and suppliers dedicated to serving this market give the business owners access to experts who understand their needs and a one-stop shop for hundreds of brands and tens of thousands of products at below retail cost to use to recognize and reward their employees, customers and partners."

For more information, visit www.theirf.org. To find out how partnering with IMRA members can help drive your small business to success, visit www.imraonline.org.