As we look to the future of distributor incentive programs, we should factor in not only what we know to be best practices, but also adjust and adapt to the ever-changing landscape in which they operate.
We want to be sure we’re focused on modifying those desired behaviors that yield positive bottom line outcomes in a manner that is easily understood and executed by the audience we’re engaging.
I like to think about these programs as being designed in layers. All the layers are needed to achieve sales goals, close deals and provide an optimal customer experience. Those layers include:
Communications Are Key to Success in Distributor Programs
Distributors are one of the most challenging relationships to maintain. It’s difficult to have the same amount of control or engagement with distributors as you might with your own internal teams and they’re also the voice that reaches the reseller and end customers. And communicating with distributors to drive downstream actions poses its own challenges. But this is absolutely something worth figuring out and we’ve got some ideas to help.
Find a way to get participant attention early—and keep it. Use a combination of strategies to engage your audience, help them achieve their goals and reward them accordingly.
- Use motivating, straightforward messaging to engage participants and promote earning potential.
- Use congratulatory communications to highlight program achievements and encourage participants to keep moving through the program.
- Engage participants throughout the year with ongoing and consistent communications to keep program top of mind.
Understand that you need to communicate to everyone. Not just the executives and store owners, but also the staff at the counter and the customer themselves. Each audience also has a preferred method of receiving the information. So be sure to offer your communications in personalized ways.
- The executives want high-level information—not too much detail; be succinct.
- The counter staff needs to be knowledgeable about the product, and motivated/incented to sell to the customer, which comes from training and guides.
- The customer needs to understand the benefits of the product itself along with the loyalty program they might be in as part of your distributor program.
Real-World Example: One of our wholesale distributor clients needed to increase the amount of products dealer principals and ultimately reps who were making sales. They invested in a full communication strategy to promote their training and incentive opportunities to those in the field, while also showing what’s in it for the principal owner. These communications created fantastic lift for the company, but also achieved a 46% average email open rate, 22% above the industry average—because of the motivating and action focused communication campaign ITA Group helped them put together.
Design a Program for All Layers: Distributors, Resellers & Customers
Program design is key to helping the recipient of the reward feel good about their efforts and want to repeat them.
- Keep it simple, and design an earning structure that makes it clear what people need to do to earn.
- Communicate the behaviors you want them to demonstrate and repeat yourself clearly and often.
- Consider including a multiplier once you achieve the baseline goal.
- Actively drive desired behaviors (such as training) that impact long-term behavior modification that increase sales.
- Segment your audience as you gain more data (more layers)
Sometimes described as a push-pull strategy, a best practice is motivating both the owner/manager and the counter sales reps in the store. This means having a full suite of incentives from top to bottom. For example, a sales rep would receive incentives and communications that push them to act, while you’d pull them into that action by incenting their leadership to support the goals—usually through a participation goal, or a bonus payout for an X goal being met by their company. If you incent the dealer principal on the participation or goal achievement of the reps, they’re more likely to encourage reps to meet the goals.
Real-World Example: One of our clients, a leading automotive aftermarket parts distributor, needed to increase sales, drive engagement, and gain mindshare with local sellers and customers. A combination of incentive and event drives a push-pull strategy through a buy-back opportunity where purchases help pay for a trip. Communication kits are sent to store managers, owners, reps as well as customers to explain how they can buy into a trip and on-site sales event through the purchases they make. See how it came to life.
Awards Motivate Distributor Program Participants
Your awards should be scalable to different levels of performance and what you’re asking them to do. While your top dealer principals and part-time dealer counter reps both deserve meaningful recognition for the work they do, it’s important to remember they likely have different perceived value and impact to your programs bottom line. Ensure the awards are commiserate with the behavior you are asking to be performed. This might differ from one activity to the next, or one role to another. Bottom line: You want to offer a flexible, relevant award experience. Here’s some things to keep in mind:
- Remember that every participant is an individual and wants to be awarded with something meaningful to them.
- Ensure you understand each audience you are rewarding—and ask them for feedback!
- Offer choice in your award selection, and communicate these choices early and often. (A Wish List within an online catalog is a great tool to support this as it allows each person to connect their goals to awards that they find desirable.)
Debit-card based SPIFFs and rebates are more suitable for short-term promotions, whereas merchandise rewards or incentive travel would make sense for long-term, loyalty-based promotions. Having a mix of merchandise, travel and experiences will ensure you’re appealing to all your audiences.
- Travel continues to be one of the most sought after award options. You might also consider pairing a weekend getaway with new luggage or sunglasses.
- A combination of merchandise and experiences can create a memorable award. For example, a chef comes to your home to prepare a meal; or, perhaps a monthly meal delivery service arrives with a new set of cookware.
Real-World Example: A lagging housing market and sluggish home construction market had our client looking for innovative growth opportunities. A premier wholesaler of plumbing, electric, HVAC, industrial and waterworks products, turned to ITA Group to help address their business challenges head on and look ahead to growing their bottom line. The incentive strategy included promotion of specific brands and items among program participants which boosted brand loyalty for sponsoring manufacturers, increased sales for wholesale locations and product manufacturers, and built rapport between manufacturers and our client. It all came to life through two unique award avenues:
- Redeemable Award Points: Online Awards Catalog – Points accumulate with each purchase and display via the program website and printed statements, demonstrating progress to goal and award potential.
- Group Travel Award: Destination-Based Trip Experience – Group travel for high-volume contractors cultivates an unmatched business networking opportunity and motivating reward to achieve set goals.
Analytics Drive Ongoing Distributor Program Results
Measure, monitor and optimize data in each of your audience layers inside a distributor program. This is the best way to measure ROI and determine future program enhancements.
First, ensure you have a complete picture of your audience by asking them questions regarding demographics, firmographics, contact information and any additional information you need. Collect this from both your dealer principals, store-level partner employees and if you’re able the end customers.
When you’re getting started, test a few things with a small group or pilot program and measure the results. This data can drive your decisions for the larger program. And don’t get discouraged as you try different ideas. It often takes deep data mining in surprising places and innovative statistical techniques to deliver insights that improve the bottom line.
Now is a great time to freshen things up and give your incentive a new look. Caring for each layer allows you to optimize your results from top to bottom. Check out our Insights Magazine, which features the best of our sales and channel content.