Transforming the Industry: Status of Non Cash Award Use in the U.S. October 2011

Agenda TimeTopic 2. The WHAT: What vehicles are used? 3. The WHY: Why these vehicles are used 3. The WHO: Who is most often rewarded with these types 4. The HOW MUCH: Thresholds

TRANSFORMATION #1 Must first know where we’ve been. #2 How to best serve clients 3

This Study Completed with Help of IFI All Star Incentive Marketing Hall Erickson Inc O.C. Tanner A.T. Cross Co. EGR International Maritz MotivAction Rideu Recognition Ryman Marketing Services 4 Samsonite Corp. Top Brand Inc. Tumi Inc. Incentive Marketing Assoc. IRF PPAI RPI SITE

On the Agenda The Study The WHAT The WHY The WHO The HOW MUCH 5

The Study End Users/Buyers Sample Inventory Target Audience Program Rules: Award Type Used Award Value 6

7 Company Size Information

WHAT AWARD VEHICLES ARE USED? THE WHAT 8

9 CashTravelMerchCard 1. Employee37%27%48%67% 2. Channel17%33%56%67% 3.Both25%57%65%61% 4.All Respondents31%37%54%65%

Number of Award Types Used 10

Use Only “this” Award Type 11

WHY ARE SPECIFIC AWARDS SELECTED ? THE WHY 12

PRE-PAID CARD TRAVEL Ease of use Flexibility Ease of Administration Provide Unique Experiences Build loyalty to Brand Emotional Connection Primary Reasons 13

MERCHANDISE CASH Tangible Reminder Trophy Value Employee Preference Primary Reasons 14

AWARD USAGE BY AUDIENCE THE WHO 15

Usage By Audience 16

Use By Employee Level LevelCashTravelMerchCards Individuals72%68%70%65% Supervisors55%37%58%56% Managers: Front-Line53%44%55%53% Middle45%42%51%46% Senior36% 28% 17

Use By Employee Level 18

Use By Employee Function CashTravelMerchCard Sales66%77%65%61% Operations/Mfg.53%24%53%47% Customer Service53%29%59%47% Marketing45%29%50%46% Technology/IT45%26%44%39% Human Resources40%21%45%41% Finance/Accounting42%26%40%41% 19

Use By Employee Function 20

21 Use By Employee Function

22 Use By Employee Function

23 Use By Employee Function

Travel Specific 24

Travel Specific In the past one to two years, what has happened to your Travel budget? 25

Average Award Value By Firm Size 26 # of EmployeesCashTravelMerchandiseCards < 100 $760.71$2,007.14$148.35$ to 1,000 $536.43$2,672.73$113.09$ ,001 to 5,000 $306.25$2,542.86$184.80$ ,001 to 10,000 $1,920.67$2,933.33$236.50$95.83 > 10,000 $1,212.50$5,946.78$650.63$ ALL $732.54$3,115.34$206.27$133.30

HOW MUCH 27

Average Award Value By Firm Size 28 $5,946 $2,007 $2,933

Optimum Award Value By Type ValueCashTravel Merchandi se Card No Response 7.5%14.5%15.2%12.6% < $ %3.2%35.9%49.5% $101 - $ %8.1%34.8%34.2% $501 - $ %8.1%9.8%0.9% $ $ %46.8%2.2%0.9% > $ %19.4%2.2%1.8% 29

Optimum Award Value By Type % 46.8%

Most Common Per Award Amt Most Common AverageMedian Cash$732$250 Travel$3,115$2,500 Merchandis e $206$100 Cards$240$50 31

Most Common Per Award Amt

Award as % of Salary AverageMedian Cash7.8%3% Travel6.0%4.5% Merchandi se 7.2%2% Cards7.9%2% 33

34 Award as % of Salary (TippingPoint)

Value Determination 35 CashTravelMerchCards Intuition19%16%22%31% Experience36%37%41%30% Observation17%32%33%20% Data19%18%10%8% Experiment13%10%9%7%

Value Determination 36

What Results Are You Experiencing? 37

38 Give us “The One Big Thing”