Survey: Who Outsources? August 01, 2006 Online Incentive Council research reveals popularity of in-house programs.
By Leo Jakobson
A new survey comparing incentive programs run in-house with those outsourced to an incentive provider unearthed some surprising results. The biggest was that 81 percent of the respondents to the Incentive Marketing Association's Online Incentive Council (OIC) 2006 survey ran their own programs, compared with just 19 percent who hired an outside incentive firm.
"That eighty-one percent caught us off guard," says Brian Galonek, president of All Star Incentive Marketing in Sturbridge, Mass., and education committee chairman of the OIC. The OIC contracted with researcher Victoria Schafer, Ph.D. of Wichita State University to develop and conduct the survey, and analyze the results. The survey itself was turned over to Incentive magazine, which hired a company to send it to readers who are known end-users of incentive programs in North America, garnering 222 qualified responses.
Galonek attributes the results to the fact that the study contacted many small businesses, not just larger, Fortune 500 companies. "Small companies are not targeted by incentive solution providers," he says. Of the respondents, 122 had 1,500 or fewer employees, while just 50 employ more than 5,000 people.
Scott May, senior vice president of marketing for Atlanta–based incentive house Loyaltyworks, suggests that some respondents are companies using cash as an incentive award, which can be run in-house fairly easily.
The percentage of companies that perceived their programs as very or somewhat successful was virtually identical, whether in-house or outsourced. Still, outsourced programs had a slight edge in satisfaction ratings overall.
Other significant findings in the report: Dealer/distributor programs are more likely to be outsourced, as are those for manufacturing companies; 66 percent of in-house programs use cash, compared with just 21 percent of outsourced programs (this is true regardless of company size); and outsourced programs communicate more frequently and are more likely to use brand-name merchandise and travel as an award.
The OIC white paper based on the survey will be available on Incentive's new Web site, www.Manage Smarter.com.
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