How tech can improve HVAC market relationships

By Steve Damerow, July 8, 2015

As Seen in Snips Magazine

In an HVAC sales channel setup, HVAC construction manufacturers can benefit greatly from relationships with HVAC market distributors.

Well-managed distributor relationships lead to increased reach and revenue for the HVAC sales supplier, while the HVAC market distributor has access to a trustworthy brand with a steady supply of excellent products they can promote. There are some hindrances to a thriving supplier-distributor relationship, namely the fact that the two parties’ interests often aren’t exactly mutual.

In this article, we’ll discuss how to align these interests.

HVAC construction manufacturers traditionally have relied on incentives like sales performance incentive funds — better known as “SPIFs” — to gain mind share, but the administration process for both sponsors and participants was laborious and time-consuming. New incentive program technologies can now greatly reduce administrative burden, increasing timeliness and efficiency with data retrieval benefits previously not possible.

Obstacles to the supplier-distributor relationship

One of the issues in the supplier-distributor partnership is the degree of influence the Internet has over consumer preferences, and distributors’ concern that the manufacturer overcome that influence. Consumers are more sophisticated, with a wealth of product information available. They are very sensitive to pricing and customer reviews, so HVAC sales distributors have the challenge of stocking the best product and knowing the salient buying features.

Disharmony between suppliers and distributors also comes from differing priorities. The key is to formulate common ground and drive those objectives through the HVAC sales channel.

Overcome channel sales barriers with incentive programs

You can improve your relationships with HVAC construction distributors by asking yourself, “What’s in it for them?” Develop the best buying proposition, but augment that through an easy-to-understand, timely reward program that uses the latest technology to streamline incentive administration. Incentive companies such as Incentive Solutions, with an online rewards marketing platform and a mobile application, can create and manage reward programs geared specifically toward channels HVAC sales management. These programs make your brand more appealing to distributors by supplying them with up-to-date information on products and offering incentives for promoting them.

Many suppliers implement loyalty programs to increase market share. However, the process is not as simple as merely executing the program and watching it works its magic. Effective loyalty reward programs play various roles: communication medium, marketing tool, sales motivator and sales tracker.

In order to operate the most successful distributor loyalty program possible, avoid these common mistakes:

Setting up a program with lackluster rewards and payouts

When it comes to loyalty programs, what you are rewarding participants with matters greatly. If the rewards and payouts aren’t noteworthy, the program won’t be worth participants’ time and effort. Likewise, rewards like cash bonuses are a slippery slope. Extra cash is tossed in with the rest of the distributor’s income and spent on gas, groceries and bills. When the novelty wears off, cash bonuses are as commonplace as salary. It’s the first step toward margin erosion.
Modern reward platforms are like Amazon, Ticketmaster, and Travelocity wrapped into one user-friendly experience. Users enjoy millions of items or travel options, delivery within days, and even instant retail pick-up capabilities via new smartphone apps.

Tangible rewards carry better tax consequences than cash, have long-lasting trophy value, and give participants more reason to go to your marketing website where you can further your corporate message.

New mobile app technology does far more than just make reward shopping more convenient. The app can be preprogrammed to facilitate two-way communication (surveys, tutorials, training), warranty registration, even instant claims validation.

Using an interface that’s not engaging

Today’s informed HVAC sales and sheet metal products distributors “push” what they know is best for them. They choose between products all the time, and there is no shortage of options. You need reward program interaction methods that engage them and keep them informed. New technology allows you to do just that. Processes that used to take weeks or months are now instantaneous for the distributor and the program administrator. For example:
HVAC construction contractor installs unit. Uses smartphone to scan ID number. Phone retrieves address. Contractor inputs end-user info. A completed warranty registration is sent to the technology provider and verified. A message is sent to the contractor and distributor thanking them for business. They’re instantly awarded reward program points.

In this scenario, the manufacturer gets instant marking information and the distributor is not on the hook to provide administration help.

Not communicating objectives the way HVAC market distributors want to receive them

The participants of every reward program are different. Successful programs are created with users’ unique needs and interests in mind. If your typical reward program user is a middle-aged man who likes camping equipment and fresh-on-the-market electronics, you can guess which rewards you should advertise to snag their attention.

Reporting and program measurement tools and a communications package can help you track program usage, gathering data about participants’ interests and preferences. This information is vital to your program’s success, helping you define your objectives and market to your participants effectively. Participants can choose how they want you to communicate with them upon enrollment—whether by email, fliers, postcards, textsor calls. The more successful your program communication is, the more information you can gather about your program’s participants and their needs.

Not focusing on distributors with the highest profit potential

Some channel partners may have a healthier budget to spend on your products and some may simply be greater evangelists for your brand. Sometimes, the distributor who buys more in quantity isn’t necessarily the most profitable relationship. You should keep an eye on your distributors’ efforts to make sure your most profitable partners are the ones hearing the loudest “Thank you.”
Remember that, while you should keep track of your profitable partners, it’s important not to forget those with small budgets who still effectively promote your brand.

Stay apprised of new reward program technology. See an online demo on how it makes incentives and loyalty programs far more effective, and use recognized best practices to create an incentive program that overcomes challenges in channel sales relationships.

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