DENVER, July 7 /PRNewswire-FirstCall/ -- Following in the footsteps of
their overwhelming acceptance by the American consumer, gift cards are fast
becoming a preferred choice for corporations looking to motivate, retain and
reward employees and customers with incentives, according to a new study
commissioned by ValueLink, the gift and spending card service of First Data
Corp. (NYSE: FDC).
In a first-of-its-kind study of the incentive market within American
business organizations, 40 percent of the 460 corporate incentive program
decision makers interviewed indicated that they used gift cards and/or gift
certificates as incentive items within the past year, with 14 percent stating
that gift cards are the most used incentive items within their company. Only
cash (58 percent) was used more frequently as an incentive item in what is
estimated to be up to a $30 billion a year incentive industry, according to
ValueLink Vice President of Marketing and Product Evolution, Karen Larsen.
In addition to the proven use of gift cards as incentives over the past
12 months, 41 percent of the respondents said they would "definitely" or "very
likely" use gift cards as incentives in the next 12 months. Another
18 percent responded "somewhat likely."
"We understand the tremendous opportunities that exist as a result of the
continued growth and expanded use of gift cards as incentives," said John
Manzer, senior manager of national sales for Lands' End. "An objective
evaluation and understanding of the business-to-business opportunities
provides us with in-depth intelligence which helps us create a strategic
growth plan for the coming year."
Merchants with established gift card programs are focused on incentive
card growth opportunities as well.
"With the tremendous success we've experienced in our consumer gift card
program, it has been a natural progression for our gift cards to be requested
as corporate incentives," said Bill Kiss, vice president and general manager
of Sears Promotions, LLC. "The overall value, flexibility and ease of Sears
custom gift cards helps companies meet their incentive objectives by
delivering what their employees want to receive as an award."
Thirty-five percent of current gift card incentive purchasers anticipate
expanding the number of cards they distribute in the next year. Of those,
17 percent said they will increase purchases by up to nine percent and,
18 percent of respondents said they will increase gift card incentive
purchases by more than 10 percent.
"The projections and the expectations for future opportunities in gift and
spending cards should be very encouraging to merchants and restaurateurs with
established gift card programs," said Kevin Harte, senior vice president and
general manager of ValueLink. "Those organizations will be well positioned to
meet the growing needs and demand of this relatively new gift card market."
The research indicates that incentives are used extensively across
industries, for companies of all sizes, and for both employees and customers
alike. The most prevalent incentive programs are designed to motivate, retain
and reward employees. Seventy percent of the respondents offered incentives
for employee performance, 56 percent for employee length of service and,
54 percent as a sales incentive.
"When considering choice, value, and measurability, incentive gift card
programs offer tremendous advantages," said Cary Kuykendall, manager of gift
card sales with O'Charley's Restaurants. "Incentive program managers
appreciate the ability to provide specialty cards and card values customized
for specific program objectives."
Customer incentives were highest in the service industries, especially
finance, insurance and real estate.
"Incentive program decision makers have welcomed gift cards with open
arms," said ValueLink's Karen Larsen. "This benchmark research indicates that
new uses of gift and spending cards will help drive market growth similar to
what we have tracked through our consumer research over the past three years."
Other key research findings include:
* Six out of 10 businesses that use incentives are in the service and
manufacturing sectors. More than three quarters of those companies
have less than 500 employees.
* Fifty-five percent of gift cards given out as incentives are for less
than $50. Approximately one-third carry values of $25 - $49;
20 percent are for $100 or more.
* Incentive program decision-makers who have used gift cards personally
(74 percent) are more likely to use gift cards as business incentives
in their company.
* Incentive decision makers report the following key reasons for using
gift cards the most as incentives:
Recipient highly values a gift card (84 percent);
Reasonable costs associated with gift cards (83 percent);
Gift cards offer good value relative to cost (81 percent); and
Gift cards are easy to order and distribute (80 percent and
81 percent, respectively).
About ValueLink
ValueLink, a service of First Data Corp., is an industry leader in gift
and spending card programs, offering a wide range of transaction processing,
card acquisition, card fulfillment and customer service capabilities. In
1995, ValueLink introduced its first, third-party gift card program. Today,
the company develops, implements and provides program management support for
130 major national brands at more than 78,000 locations in 15 countries. For
more information, visit http://www.valuelink.info.
About First Data
First Data Corp. (NYSE: FDC), with global headquarters in Denver, helps
power the global economy. Serving approximately 2.8 million merchant
locations, 1,400 card issuers and millions of consumers, First Data makes it
easy, fast and secure for people and businesses to buy goods and services,
using virtually any form of payment: credit, debit, smart card, stored-value
card or check at the point-of-sale, over the Internet or by money transfer.
For more information, please visit the company's Web site at
http://www.firstdata.com.
Data for ValueLink's Corporate Insights Survey was collected during March
and April 2004 using the Harris Interactive Online Panel, one of the major
marketing research panels in the United States. Interviews were completed
with 460 manager or higher level individuals in sales, marketing or human
resources who are responsible for making incentive program decisions in
companies with 50 or more employees.
SOURCE First Data Corp.
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Related links:
http://www.valuelink.info
http://www.firstdata.com
CONTACT:
Sherry Johnson of First Data Corp.,
+1-303-967-8348, sherry.johnson@firstdatacorp.com
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