Winning Loyalty Through Incentives
As Featured in Wholesale & Distribution International
By Steve Damerow, November 2, 2015
To be a successful distributor or wholesaler, it’s crucial for you to stand out among the competition. What can you offer that other distributors can’t? Are there benefits to doing business with you? These are the questions contractors and other buyers ask themselves about you. One of the unique, modern approaches you can take to win contractors over is offering incentive programs that are powered by the latest and greatest technology.
Here’s the big issue distributors face when it comes to competition: you have limited control over price, unable to lower the MSRP or increase mark-up too much. Therefore, you have to use creative solutions to stand out among the rest. Some of the tactics available are the use of rebates, discounts and bonuses. While there’s nothing necessarily wrong with these options, they don’t help you stand out from the competition or elevate you from a vendor to a trusted business partner. So what better options do you have?
You can use incentive programs to reward channel partners for doing business with you and selling more inventory without having to lower your price and affect your margin. With today’s technology, incentive programs are more efficient, engaging and cost-effective. While distributor incentive programs once consisted of stamps or stickers participants collected to redeem them for old warehouse inventory, online and mobile technology revolutionized the reward process. Incentive programs are now business tools and true marketing platforms that can communicate instantly with agents 24/7, increase margins and market share, create contractor loyalty, amass clean data, deliver product information and train salespeople in the following ways.
With smartphone capabilities, participants have access to sales incentive programs on an immediate basis, 24 hours a day. Many incentive companies have combined digital, points-based reward systems with sophisticated online merchandise catalogs so that salespeople can submit claims and receive reward points instantly. This is an immense benefit to contractors, who are constantly on the move.
“It used to be that distributors rewarded contractors belatedly for sales, but with mobile apps, field agents can upload warranties and other sales claim data on the spot,” says Luke Kreitner of Loyaltyworks, an Atlanta-based incentive provider. “Then they can receive and spend their reward points immediately, all directly from their phones.”
Online training and communication technology allows distributors to reward program participants for completing quick surveys and training quizzes. You can also announce product and promotion information on a real-time basis. Educating contractors ensures their sales skills are always evolving and makes them more engaged in the sales process. Online training software alone was once a costly investment, but recent incentive technology allows you the more cost-effective option of integrating training with incentive strategies.
Using Multiple Programs
Even with a complex supply chain or a wide-reaching network of contractors and sales reps, online incentive technology simplifies the process so you can use incentive promotions to your advantage more frequently and in many different ways. Online incentive software is capable of running multiple promotions under the same platform, or under one license. For example, you can operate a product-specific promotion that applies to all contractors, while simultaneously running a promotion targeted to specific products within a targeted group or region.
In a points-based online reward system, the program administrator can set the program to automatically assign different reward values to different products and update those values over time, as needed. This means you can offer more valuable rewards to contractors for selling higher margin products. Rather than doling out a fixed reward amount across all products and behaviors, you can distribute reward payouts that are proportionate to their accomplishment.
Incentive companies often offer customizable online reward program design, meaning the program can reflect your company’s branding and values to bolster mindshare. In this way, you can use online reward technology to reinforce your organizational strategies and policies. Your reward program might display your company logo, for example, and disclose regular updates about new promotions and opportunities to earn rewards. Don’t underestimate the power of marketing – when contractors repeatedly see a distributor’s logo in association with the exciting process of earning rewards, they will develop deeper loyalty to that distributor.
Online incentive technology is capable of fetching clean, updated data about both program usage and participants themselves. As you collect the invoices and warranty registrations contractors submit to them in order to claim rewards, you can begin building a database of information about your buyers. On top of that, you can access online program reports to see how participants are interacting with the program, finding out who’s engaged and motivated to sell your products as well as who’s not and why.
Distribution channel incentive tactics have been around as long as discounts and cash bonuses have—the concept is far from new. But, like many things in today’s world, contemporary technology has given incentive programs a facelift, making them more accessible, more fun and more beneficial to use. Instant reward redemption and 24/7 access to programs suit contractors’ busy work days, while the ability to target different groups and adjust reward values makes incentive programs more useful for complex distribution channel needs. Online and mobile incentive technology allows today’s distributors to operate more effective, engaging programs that achieve greater ROI by driving sales and bolstering channel partner loyalty.