Maritz Engagement Executive: Cost Pressures, Changing Audiences, and AI Are Reshaping the Incentives, Rewards, and Recognition Market

One of the leading players in the engagement marketplace shares its views with the state of the marketplace.

Cost Pressures Are Changing Program Priorities
A New Generation Wants Authentic Experiences
Speed, Flexibility, and AI Are Changing Program Management
Merchandise Rewards: The Retail Experience and Halo Effect
Enterprise Engagement Requires More Than a Broader Service Offering
AI Creates New Opportunities to Measure Business Impact
The Opportunity Ahead

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Carrie Hanichak, Global Head, Engagement Solutions at Maritz, St. Louis, identifies three major trends reshaping the IRR market: tighter budgets, demands for greater speed and flexibility, and a new generation of participants seeking authentic experiences. She also sees significant opportunities for AI, improved impact measurement, retail-like merchandise redemption experiences, and more sophisticated enterprise engagement services.

Maritz is one of the industry's largest and oldest incentive, recognition, and engagement companies in the industry, and has been in business for 132 years

She believes the incentive, rewards, and recognition (IRR) industry is undergoing significant changes in how clients design programs, allocate budgets and measure results. Based on her experience working with corporate clients, she identifies three major trends: increasing cost pressures, the need for faster and more flexible program management, and changing participant demographics that are creating demand for more authentic and personalized experiences. At the same time, she sees artificial intelligence opening new opportunities to improve program performance, connect data across organizations and demonstrate lasting business impact. She also emphasizes that the quality of the reward experience, whether travel or merchandise, can have a significant influence on the loyalty and business value programs create.

Cost Pressures Are Changing Program Priorities

Hanichak says budget constraints have become one of the most important factors shaping client decisions. Organizations are increasingly willing to compromise on preferred technology functionality or program design to keep costs under control. The pressures are particularly apparent in incentive travel, where she cites airfare increases of 10% to 20% in the market she is observing, compared with general inflation of approximately 4%. These rising transportation costs consume dollars that clients would rather devote to memorable experiences at the destination. For incentive travel planners, she says, this creates difficult choices about how to preserve the elements of a program that make it special while managing unavoidable expenses. The challenge is not simply reducing costs but protecting the participant experience that makes the incentive worthwhile.

A New Generation Wants Authentic Experiences

A second important development involves the changing composition of incentive and recognition audiences. Hanichak reports that participants are becoming younger, more female, and more diverse, requiring companies to reconsider long-established assumptions about what constitutes a desirable reward. One example involves incentive travel programs that traditionally permitted qualifiers to bring spouses or significant others. Hanichak says some organizations are broadening these policies to allow participants to bring friends or other family members, reflecting changes in relationships and participant expectations. She also sees growing demand for authentic experiences that participants cannot easily obtain on their own, helping explain the continuing appeal of individual travel rewards that give recipients greater freedom to choose experiences matching their interests.

Hanichak believes travel has a particularly powerful effect on long-term loyalty because participants remember not only the destination but also the achievement or relationship that made the experience possible. She encourages clients to include travel options in their reward collections because they provide aspirational value and opportunities that participants might not otherwise enjoy. In her view, these experiences can create a lasting "halo effect," reinforcing the connection between the recipient and the organization that provided the reward. This emotional association, she believes, is an important part of the business value that memorable rewards can deliver.

Speed, Flexibility, and AI Are Changing Program Management

The third major trend she identifies is the growing importance of speed and flexibility. Businesses are changing rapidly, and incentive programs must be able to respond when promotions need to be launched, market conditions shift, or existing initiatives fail to generate the desired response. Rather than waiting until the end of a campaign to evaluate results, she says clients increasingly need the ability to adjust program rules, promotions, and communications while programs are underway. She sees AI accelerating these expectations by making information available more quickly and creating opportunities to analyze performance and make changes faster.

On the other hand, she emphasizes that the availability of data does not automatically make it easy to use. Organizations still need the expertise and technology to assemble information from different systems, interpret its significance, and translate findings into effective program changes. She sees this as an important opportunity for engagement solution providers that can help clients turn information into action, both by improving program responsiveness and by identifying ways to create greater value from existing budgets.

Merchandise Rewards: The Retail Experience and Halo Effect

Although travel provides particularly memorable experiences, Hanichak also emphasizes the continuing importance of merchandise rewards and the quality of the redemption experience. She sees value in making reward selection as similar as possible to a modern retail shopping experience, with appealing merchandise, recognizable brands, convenient selection, and straightforward rapid fulfillment. Technology integrations, including APIs that connect reward platforms with merchandise suppliers, can help create a more seamless experience with the familiarity and convenience consumers have come to expect from online retail.

For Hanichak, the redemption experience itself is an important part of the reward's value. Participants should feel that they are selecting something desirable from a compelling retail assortment rather than simply exchanging points for a product. The quality of the selection and fulfillment experience can help reinforce the perceived value of the award and the positive association with the sponsoring organization. She sees the ability to connect participants more directly with merchandise and brands as an important opportunity for reward providers.

She also believes merchandise can create a stronger emotional connection than a gift card because the recipient associates the product directly with the organization that provided it.
A gift card introduces an additional step between the award and the eventual purchase, potentially weakening that connection. Merchandise, by contrast, can preserve the relationship between the reward, the achievement, and the sponsoring organization, creating a more powerful halo effect and reinforcing the behaviors or loyalty the program is intended to encourage. She acknowledges that merchandise can also offer monetary value but considers its greater potential to be the lasting business value it creates. The objective, she explains, is not simply to distribute rewards but to motivate additional sales, encourage desired behaviors, or build stronger relationships.

Enterprise Engagement Requires More Than a Broader Service Offering

Hanichak also addresses the growing interest among incentive and recognition companies in expanding their services across employee engagement, channel partner incentives, customer loyalty, and other stakeholder relationships. While this broader enterprise engagement approach offers opportunities, she cautions that offering a wide range of services is easier to describe than to execute. Effective programs require genuine domain expertise in the audiences, business objectives, behaviors, and operating environments involved. The skills required to manage employee recognition are not necessarily the same as those needed to design channel sales incentives or customer loyalty programs. Her perspective underscores the importance of combining broader engagement capabilities with specialists who understand the particular business challenges each program must address, rather than assuming that expertise in one engagement discipline automatically transfers to another.

AI Creates New Opportunities to Measure Business Impact

Perhaps the most significant longer-term opportunity is impact measurement. She disagrees with the suggestion that clients have historically lacked interest in measuring incentive and recognition program results. Based on her 20 years at Maritz, she says the desire to demonstrate results has always existed. The greater obstacle has been access to usable data. Measuring return on investment can require connecting marketing and sales information, integrating complex point-of-sale systems, and obtaining data from departments that have traditionally operated independently. These technical and organizational barriers have made it difficult to connect program participation with financial performance, even when both clients and providers wanted to establish that relationship.

AI offers an opportunity to overcome some of these obstacles by making it easier to connect and analyze information that previously existed in separate systems. For example, instead of measuring only whether participants enjoyed an incentive trip, organizations could increasingly examine the lasting business impact of the experience. Better data could help identify which program elements influence behavior, support more effective program adjustments, and demonstrate the value created by engagement investments. She describes this opportunity as particularly exciting because it could help providers and clients move beyond participation and satisfaction measures to better understand actual business outcomes, while providing the information needed to continuously improve program effectiveness.

The Opportunity Ahead

For Hanichak, the future of the IRR industry involves managing several priorities simultaneously: controlling costs without sacrificing experiences, responding quickly to changing business conditions, appealing to increasingly diverse audiences, and using data to improve both program design and measurable results. She believes travel and merchandise will continue to play important roles because of their ability to create memorable experiences and lasting associations with the sponsoring organization.

At the same time, she sees AI and better data integration creating opportunities to demonstrate more clearly how those experiences contribute to business performance. Her assessment suggests that successful engagement solution providers will need more than attractive rewards and efficient fulfillment. They will need the domain expertise, flexibility, retail-quality reward experiences, technology, and analytical capabilities to help clients create and measure lasting value.

For More Information

Chris Bozic
Vice President, Sales and Marketing
Maritz
Chris.Bozic@maritz.com

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