Distributor incentive programs can be an extremely effective tool to boost loyalty, maximize profits, and reach sales goals.
Properly managed programs are beneficial not only for distributors but vendors as well, leading to:
- Stronger relationships
- Repeat purchases
- Reaching more people
- More accurate ROI data
Incentive programs are not without their faults, however, if not handled properly. Companies that process these programs manually often see errors. Some of the most common are:
- Delays
- Incorrect Data
- Fake Claims
- Budgeting
- Human Error
Implementing automation helps avoid many of these issues by centralizing data and streamlining processes. Combined with automatic data checks, shorter turnaround times, and lower costs, automation can also help create new opportunities.
Now that you understand the benefits and tools needed to run a distributor incentive program, there are a few key elements you will need to consider to run these programs successfully.
8 Best Practices For Incentive Program Success
Before you dive into adding distributor incentive programs, here are some proven best practices that help drive participation and maximize ROI.
1. Define Your Target Audience
Defining your audience should be two-fold. First, you need to determine your end-user. Are you promoting products that make sense to the end-user? Are you addressing specific needs, or are you just trying to get rid of a product? How well your program performs may depend on what you’re promoting and whether the end-users need that product. Second, you need to figure out what channel partners you want to push the program through. Instead of offering incentives to all of your channel partners, focus on the ones that will bring the most value. Are you taking advantage of your stronger relationships? Who will make an effort to represent your company and create the most value? Once you decide on WHO, you can design your program around their needs based on what will generate the best response.
2. Create Realistic Sales Goals & Objectives
Nothing is more frustrating than unattainable sales goals. Many distributors will ignore promotions if they feel they cannot meet expectations, if your goals are unrealistic, or if they are not clear. Identifying your goals and objectives ahead of time can avoid confusion and lead to more success since everyone is on the same page. Defining goals early on also allows you to make adjustments if something does not make sense. In addition to setting goals, you also need to set realistic budgets and allocate enough for rewards and payouts.
3. Select Valuable Rewards
Your channel partners work with all sorts of vendors. Many of which can be lost in the fold if they are not offering incentives or are not offering enough. With incentive programs, it is crucial to offer enough to your partners to get their attention. Depending on what incentive program you choose, the reward must be large enough to invoke and keep their excitement. Distributors who perceive that their efforts are being fairly rewarded are likely to do more. Now, this does not mean that you have to give everyone the same reward. In fact, you shouldn’t! Instead, try strategically planning out your rewards based on status, order volume, and performance.
4. Outline Program Details
Clearly define program rules or requirements that are necessary to receive rewards. Everyone needs to be aware of these to ensure that they are meeting desired expectations. Additionally, program rules should not be overly complicated to follow. Confusing or complex rules will discourage participation.
5. Train Your Staff
Your sales team is an integral part of ensuring the success of your programs. They are the direct lines of communication to your partners. If anyone has questions, they are likely to go to your sales staff. Once again, individuals may be discouraged when asking questions about the program if your sales team doesn’t know the answers. In many instances, you may even rely on your sales staff to help plan the program or rules because they know what options may entice partners to participate. Supporting your team with additional materials that explain the program may also encourage your team to reach out to partners directly to promote it.
6. COMMUNICATE
Communication is key! Whether you communicate directly to your distributors or sales team, you need to ensure everyone is on the same page. Do not be afraid to over-communicate, especially if there are any changes in the program, goals, or objectives. Use every vehicle of communication possible to make sure that program rules and requirements are clearly stated and followed. Communication also helps to build stronger relationships and trust. Partners who trust you are likely to purchase again and promote your products to more people.
7. Track, Analyze, Adjust
The success of a program is defined by whether or not you are tracking your performance. It does not make sense to run programs if you have no idea how they did. While providing insights into distributor participation and end-user behaviors, monitoring programs can help determine what adjustments should be made to improve performance. Part of successful program tracking is making sure you have the proper tools in place. Using automation tools can help remove stress while taking control of your program rules, monitoring Key Performance Indicators (KPIs), and helping you evaluate your ROI.
8. Offer Continued Support
Throughout the entirety of the program, your partners will likely have questions. Offering them continued support may be the difference in the scope of their participation. Your partners want to feel valued and that they can rely on you. Additionally, they may feel more engaged when you are more engaged, resulting in higher participation and larger orders. They also may be more likely to provide testimonials offering positive words for you to share with others.
In Conclusion
The best and most successful distributor incentive programs include specified target audiences (both partners and end-users), realistic goals, enticing rewards, clear rules, continued communication, and the ability to change and grow. Finally, don’t be afraid to ask your partners or sales teams their opinions on ways to improve! Teams who effectively communicate and work together to make programs successful become advocates, inevitably bringing more business and opportunities.
Learn more about Distributor Incentive Programs and how to manage them, by reaching out to our team today! Just call us at (702) 247-1120 or email info@computermarketresearch.com.