Our recent interview with Eric Anderson, Sales Director for the PMC incentive division of Almo reminded us of a serious challenge that we, the associations and our fellow media in the rewards and recognition business, should all remember: This is still an unknown business.

Despite Incentive Federation research indicating U.S. companies spend over $50 billion on rewards, almost no one I’ve met outside of our business has ever heard of it. In our interview, Anderson points out that it amazes him how many businesses buy rewards bulk at retail simply because they don’t know any better. He said he has seen situations where one department in a company is buying through the special markets channel while others shop at retail. Even if in some cases retail is price competitive with the special markets channel, he said that the extra services and convenience far outweigh the benefits of using most retail solutions for merchandise rewards. In that same interview, Anderson made another unrelated comment that might help explain how this remains the case: this is a much smaller industry than we think.

Working for one of the largest wholesale distributors active in the incentive business, carrying a large percentage of the leading brands and only selling through intermediaries, Anderson suspects his company does business with most of the leading incentive, recognition, loyalty and related companies in the marketplace. So how many serious volume resellers are there really, we asked? His answer: probably under 500 companies. Compare that with the advertising industry, in which there are estimated to be at least 8,000 firms, or the promotional products business, with over 20,000.

Over the years, some of our industry organizations and trade magazines have undertaken various efforts to make businesses aware of our marketplace, usually focusing on the importance of using incentive programs, and they should be supported whenever possible.

Perhaps it’s time to undertake an effort with an even simpler message: Businesses can get better price and service for most reward programs through the special markets channel than they can through retail.

After all, everybody likes a deal.

In a recent Rewards Recognition Network (RRN) article, we quoted recognition innovator Cheston Elton, who has now become a major proponent of the broader field of engagement, as saying: “When someone hits their five-year anniversary and a company sends them a link to a catalog, the real message is ‘We don’t know you at all. Hopefully there is something in the 500 things in the catalog that will make you happy.’ When you know someone, you don’t give them a catalog.”  

Elton’s instincts have been confirmed by a new study produced for the Incentive Marketing Association (IMA) by the Incentive Research Foundation (IRF), which found that the manner in which rewards are given is almost as important as what we actually give. It turns out that the true impact of rewards is based on the sincerity with which they are selected and given.

This research, produced by Megg Withinton with Intellective Group, confirms the concept of “engaging rewards” that is the foundation of www.RewardsRecognitionNetwork.com. The study was based on in-depth questions asked of over 450 program participants of different demographics and job titles, finding that the intrinsic elements of award selection and presentation are as important as the extrinsic elements.

Selecting awards is as much of a science as media selection in advertising – maybe more so – since it demands a careful understanding of the company’s brand, the message it wishes to convey, the recipient, his or her significant other and family, and the company as a whole. And because this reward is presumably being given to someone important to the organization, selection and presentation are even more critical.

Based on almost all of the research we know of, rewards, when used properly, have nothing to do with compensation; they are a means of expressing personal gratitude for the loyalty and performance of people in a way that resonates throughout his or her community of loved ones and the organization as a whole.

The science of the proper use of rewards & recognition is as much in its infancy as the field of engagement, and once more we have the Incentive Research Foundation and its industry sponsors to thank for providing the necessary evidence.