A well-designed distributor incentive program is key for manufacturers to drive sales, foster loyalty, achieve company goals and outpace the competition. Let's explore essential components of successful distributor incentive programs and how to implement those components effectively.
Key components of successful distributor incentive programs
Think about distributor incentive programs in three layers. To achieve sales goals, close deals and provide the optimal customer experience, consider how each layer impacts the others.
- People: Engaging key audiences like sales reps, store owners, counter staff and end customers
- Behaviors: Encouraging actions that drive sales and lead to customer satisfaction
- Operations: Implementing the program effectively through:
- Communications
- Program design
- Awards
- Analytics
Prioritize distributor program communications
Distributor relationships are one of the most challenging to maintain. It’s difficult to have the same amount of engagement with distributors as you might with your own internal teams. But they’re also the voice that most often reaches the reseller and end customers, making their relationship worth cultivating.
Get participant attention early—and keep it
Capturing participants’ attention is crucial for communicating key messages and your overall program’s success. A combination of strategies engages your audience, helps them achieve their goals and rewards them accordingly.
- Use motivating, straightforward messaging to engage participants and promote earning potential.
- Send 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 the program top of mind.
Related: Learn four best practices to build channel partner engagement.
Communicate the right way for every role
To build a successful program, communicate effectively with every person it touches—not just the executives and store owners, but also the staff at the counter and customers. It’s likely that each audience has a preferred method of receiving the information, though. So offer your communications in personalized ways. For instance:
- Executives may want only high-level information. Be succinct and don’t flood them with details.
- Counter staff needs to have product knowledge and be motivated to sell to the customer. Create training and guides that provide the information they need, when they need it.
- Customers need to understand the product benefits along with the loyalty program they belong to as part of your distributor program. Focus on what they get by choosing your brand.
Related: Discover our best practices for to-partner marketing communications.
Use incentive program strategy best practices
When designing your distributor incentive program, one of the most important components is to keep the earning structure simple and clear. Depending on your program, that could look like:
- Clearly communicating desired behaviors
- Considering multipliers for exceeding baseline goals
- Driving long-term behavior modification through training incentives
- Segmenting your audience based on data
Consider adopting a push-pull approach to build motivation. This strategy focuses on motivating the owner/manager and the counter sales reps in the store through a full suite of incentives. For example, a sales rep might receive incentives and communications that encourage them to act, while their leadership may be incentivized to support their goals—usually through a participation goal or a bonus payout. Often, if you incent the dealer principal on their reps’ participation, they’re more likely to encourage reps to meet their goals.
Choose awards that motivate distributor program participants
Awards should be scalable and tailored to different performance levels and roles. While your top dealer principals and part-time dealer counter reps deserve meaningful recognition for their work, remember they likely have different perceived value and impact to your program’s bottom line.
Ensure awards are in line with the behavior you’re asking them to perform. This might differ from one activity to the next, or from one role to another. In short: Offer a flexible, relevant award experience. Keep the following in mind.
- Remember every participant is an individual and wants to be rewarded in a way that’s meaningful to them.
- Ensure you understand each audience you’re rewarding—and ask them for feedback!
- Offer award choice and communicate the options early and often. For example, a wish list within an online catalog lets each person connect their goals to awards they want.
Related: Focus incentives on rewarding channel behavior, not sales.
While SPIFs and rebates are more suitable for short-term promotions, merchandise awards or incentive travel make sense for long-term, loyalty-based programs. Having a mix of merchandise, travel and experiences ensures you appeal to all audiences.
- Travel continues to be one of the most sought-after award options. Consider combining both award types by pairing a weekend getaway with items like new luggage or sunglasses.
- A combination of merchandise and experiences creates a memorable award. Things like a chef preparing a meal in a participant’s home or a monthly meal delivery service that arrives with a new set of cookware are awards that have a lasting impact.
Drive ongoing distributor program results with analytics
Measure, monitor and optimize data in each of your audience segments to see program ROI and determine future program enhancements.
Asking your audience questions about demographics, firmographics, contact information and any additional areas you’d like to track will give you a complete picture. Collect this data from your dealer principals, store-level partner employees and, if you’re able, the end customers.
You don’t have to do everything at once. Test a few things first with a small group or pilot program and measure those results. This data can drive your decisions for the larger program. Similarly, don’t get discouraged as you try different ideas. It can take deep data analysis over time and innovative statistical techniques to deliver insights that improve the bottom line.
Get started collecting valuable partner data to improve your distributor incentive program.