The newly released 2022 Incentive Travel Index (ITI) reports that, overall, the incentive travel industry is strong....
Research / Glossary of Terms: Incentives, Rewards, and Recognition
by Incentive Research Foundation
ACCOUNT-OPENER: A direct premium offered by a bank or savings and loan association to a depositor opening a new account.
ADVANCE PREMIUM: One given to a new customer on condition he or she will earn it by later purchase, a technique originated by home-service route firms.
ADVERTISING SPECIALTY: Close cousin to a premium—a useful item bearing an advertising imprint and given freely with no strings attached. Also known as a promotional product.
BOUNCE-BACK: An additional offer mailed with a consumer premium. Several items may be offered, frequently related to the first. Often used to test items for future use.
BUSINESS GIFT: A gift to a customer, stockholder, employee or other business friend as an expression of appreciation.
BUY-IN: Opportunity for travel incentive participants to purchase part of trip if they do not fully qualify by sales performance. This term is also used to describe the engagement of a target audience vis-à-vis a company initiative, such as an incentive program.
COMBINATION SALE: A tie-in of a premium with a purchase at a combination price; sometimes self -liquidating: often an on-pack
CONTAINER PREMIUM: A type of factory-packed direct premium—a reusable container that serves as a product package. All or part of the extra cost may be added to the price to make the promotion self-liquidating. Sometimes called a dealer incentive.
CONTEST: A competition based on skill, in which prizes are offered. Proof of purchase is usually required with entry. (Compare with “sweepstakes”.)
CONTINUITY PROMOTION: A supermarket or other retail plan—see “piece-a-week” and/or “tape plan”. Term may also apply to coupon plan.
CONTROLLED-MARKDOWN PLAN: A retail stamp or tape-redemption program that applies all markdowns to a limited group of grocery items and restricts them to loyal customers.
COUPON PLAN: A continuous program offering a variety of premiums for coupons, labels or other tokens from one or more products.
DEALER INCENTIVE: One given to a retailer with a specified purchase of one or more products—or for coupons or purchase credits accumulated over a period of time.
DEBIT CARD: A gift card loaded with a fixed dollar amount that can be redeemed by consumers at select or multiple retailers. Some debit cards can be recharged with additional dollars at any time.
DIRECT PREMIUM: The simplest kind—an item given free with a purchase at the time of purchase. Includes on-packs, in-packs and container premiums as well as those given separately. Now also applied to self-liquidating offers at point of sale.
DISPLAY PREMIUM: A form of dealer incentive which is part of a point-of-purchase display—may be a sample of a consumer premium, or a functional element of the display itself.
DOOR-OPENER: A relatively inexpensive premium given by a direct salesperson to induce a prospect to listen to a sales presentation.
ELECTRONIC MARKETING: System using card at checkout to give retail customers incentive credits, accumulate purchase information, issue discount coupons, authorize check-cashing and other functions.
EMPLOYEE AWARD: An incentive to a non-sales employee for safety, quality control suggestions, attendance or productivity achievement.
FACTORY-PACK: A direct premium attached to a product—includes in-packs, on-packs and container premiums.
FREE: A magic word with some strings attached. Its use is not so severely restricted as it once was—but it’s still wise to be sure it really is free if the advertising says it is. Conditions on which the free offer is made should be clearly stated.
FREE MAIL-IN: Consumer offer of premium by mail for proof of purchase— plus, usually, a sum for postage & handling.
FREOUENT-BUYER INCENTIVE: Continuing offers designed to build customer loyalty: akin to coupon plan or trading stamps.
GAME: A chance promotion, employing a bingo-type card, matching device or rub-off card.
GIVE-AWAY: akin to a promotional product or a traffic builder.
GROUP TRAVEL: Incentive program in which qualifiers (and spouses, usually) travel together to a single destination: business meetings are often included.
INDIVIDUAL TRAVEL: Travel incentives offered to an individual, who can travel with a significant other or family on their own. Often offered in the form of a gift card or certificate.
IN LIEU OF INTEREST: A premium offered by a financial institution instead of all or part of normal interest payments.
INCENTIVE: Merchandise or travel offered to consumers, salespeople, dealers or employees as a tangible reward for purchase or performance. Also called a premium.
INCENTIVE REPRESENTATIVE: A specialized manufacturers’ representative serving premium users: a commission salesperson representing several different manufacturers.
IN-PACK: A direct premium enclosed inside a product package.
KEEPER: A premium offered in direct-mail marketing, for accepting a free trial of the sale merchandise—and to be kept by the consumer even it the trial item is returned.
LOADER: An obsolete term (also “dealer loader”) for a dealer premium given with a specified product purchase. In disfavor because of obvious negative connotation. “Dealer premium” or “dealer incentive” has replaced it.
LOTTERY: A plan (generally legal in sales promotion) that awards a prize on the basis of chance and requires consideration to enter. Becomes a legal sweepstakes or game when consideration is removed, or a contest when chance is eliminated.
MAIL-IN: Any premium offered upon mail request—either a self-liquidator or a free offer for multiple proof-of -purchase tokens.
MOTIVATION: The stimulation of a salesperson’s, dealer’s, or employee’s innate desires end personal objectives by a program of recognition or achievement through merchandise or travel incentive techniques.
NEAR-PACK: A recently coined term for a direct premium in the grocery field (derived from “on-pack” and “in-pack”).
ONLINE INCENTIVE PROGRAM. Usually refers to software used to manage incentive programs on the Internet.
ONLINE INCENTIVES: Any incentive offered online.
ON-PACK: A direct premium attached to the exterior of a product package— or, sometimes, riding with it in a special sleeve, carton or film wrap.
PART-CASH REDEMPTION: An option often included in coupon plans, permitting the consumer to get premiums faster by redeeming fewer coupons with a cash amount which may be self-liquidating.
PIECE-A-WEEK OFFER: A self-liquidating or profit-making retail offer of related premiums, one a week for 12 to 15 weeks, with specified purchase.
PREMIUM: An article of merchandise offered as an incentive to the performance of a specified service. Most often applied to consumer offers. Also “incentive”.
PREMIUM REP: An incentive representative.
PRIZE: Reward given to winner in a contest, sweepstakes or lottery: also sometimes refers to sales incentive award.
PROMOTIONAL PRODUCTS: a useful item bearing an advertising imprint or logo and given freely with no strings attached.
PROOF OF PURCHASE: A box-top, label, trademark, coupon, UPC symbol or other token from a product, which qualifies a consumer to receive a premium.
PURCHASE-WITH-PURCHASE: A self -liquidating direct premium offer.
REFERRAL PREMIUM: One offered to a satisfied customer who refers the seller to a friend who purchases a product. Also the “use-the-user plan”.
SALES CONTEST: A sales-incentive program. The word “contest” is used less today than previously, since direct competition among salespeople is no longer the rule.
SALES INCENTIVE: An award to a salesperson for performance—exceeding a quota, signing new accounts, reopening accounts, selling specified products or other stated objectives of the company.
SAVER PLAN: See “tape plan.”
SELF-LIQUIDATOR: A consumer premium offered (usually by mail) for proof of purchase and a cash amount sufficient to cover the merchandise cost plus handling and postage. May refer to any promotion in which the recipient pays the premium cost.
SPECIALTY ADVERTISING: See “promotional product.”
SPRINT: A brief campaign within a longer sales or dealer incentive program, designed to maintain interest and excitement.
SWEEPSTAKES: A promotion that awards prizes on the basis of a chance drawing or preselected numbers. Similar to a contest, but without the element of skill—and usually for legal reasons, without “consideration”.
TAPE PLAN: More formally, “cash-register-tape redemption plan.” A continuity promotion by supermarkets, offering one or more premiums in return for register tapes, coupons or stamps representing specified purchases—and, most often, cash amounts sufficient to make the promotion self-liquidating or profitable.
TEST: Any of half a dozen methods of measuring appeal of a premium in advance of a promotion. Frequently done by personal interviews, sometimes by a mail ballot or split-run newspaper advertising.
TRADING STAMP: A gummed stamp given by a retailer, usually for each 10 cents of purchase, to be pasted in a saver book or card, redeemable for premiums presented in the stamp-company catalog. These still are used at truck stops and in online promotions.
TRAFFIC-BUILDER: A relatively low-cost premium or promotional products offered free as an inducement to visit a store for a demonstration.
TRAVEL INCENTIVE: A trip—group or individual—offered to salespeople or dealers. Often tied in with a sales meeting at resort area.
The Incentive Research Foundation’s Industry Outlook for 2023: Merchandise, Gift Cards and Event Gifting reports an optimistic outlook for 2023 despite continuing challenges to the global economy. With a critical focus on attracting and retaining talent, businesses consider non-cash incentive programs to be a valuable tool to motivate a changing workforce.
IRF President Stephanie Harris and IRF Chief Research Adviser Rick Garlick present this useful analysis of how incentive, rewards and recognition programs are being designed and budgeted for 2021.