10 Elemental Strategies for Building a Successful Dealer Incentive Program
Dealer incentive programs are the initiatives taken by businesses to encourage their dealers and distributors to sell more by incentivizing their efforts. A dealership can be considered successful only when it adds value to the business as well as the dealers. Strong dealerships can bring unexpected growth to your business. However, you need to ensure the satisfaction of your dealers and distributor for this.
Even the most dedicated dealers can become less efficient at times. Although they work for their profit, it becomes necessary to encourage them to perform better. To keep them motivated for a longer period, the best way is to incentivize their performances.
You can build healthy competition among all your dealers or plan other types of incentive programs that align with your business.
1. Open-Ended Strategy
Under an open-ended incentive strategy, you can encourage your dealers to sell more than the previous year. Set a sales milestone slightly higher than their last year’s sales quota and offer attractive incentives for achieving their goal. These programs are budget friendly as you only need to reward the dealers on incremental sales.
You can also do it via a plateau-based incentive program. This type of program sets different goals and offers higher incentives for achieving higher goals. For example, set different milestones at 5%, 10%, and 15% of their last year’s sales. The higher milestone they achieve, the better incentives they receive.
2. Closed-Ended Strategy
This strategy is based on the concept of rewarding the highest-performing dealers. You can reward the top performers region-wise, category-wise, and based on other factors. Also, you need to plan whether you are going to offer these incentives monthly, quarterly, half-yearly, or yearly.
Along with the category-wise top performers, you can make your program more exciting by rewarding the overall topmost performers. If you are offering category-wise top performers incentives monthly, you can keep a different incentive scheme for the overall 3-5 top performers of the year.
3. New Product Introduction
When you launch a new product in the market, it becomes difficult to encourage your dealers to sell these new launches. They are already comfortable with selling the older ones and don’t want to complicate their process by learning about a new product. But with a well-planned incentive scheme, you can make your dealers sell these new products in the market.
It can be done by offering higher margins on these products as an introductory benefit. You can reward your dealers in the form of some monetary or non-monetary benefits for achieving a particular number of sales for a newly launched product.
4. Presales Incentives
When you give your dealers a yearly or half-yearly sales target, presales incentives can come in handy to help them stay motivated. While your dealers are focussing only on the yearly goal, you must focus on short-term as well as long-term sales goals. You can allow them to collect a part of their incentive commission in between. Or offer some small non-monetary gifts to remind them of the bigger incentive they can receive after achieving their goal.
5. Training Incentives
Educating and training your dealers is very important as they are the ones to deal with your end users. If they don’t have a thorough understanding of your products/services, they will not be able to explain them to the consumers. It affects them as well as your business.
So, creating dealer education programs and certifications becomes essential for every company, especially when you expect most of your revenue to come through dealers. But how can you make them enrol in these education programs?
Offer monetary incentives or certifications or other types of benefits upon completing an education program. After they complete the certification, you can send them on a fully-funded trip and ask them to visit your offices there. They can learn new things there and implement them after coming back.
6. Product-Specific Programs
When you want to boost sales for a particular product, the best way to do it is to offer additional margins or some incentives on it. Motivate your dealers to sell these products on a priority by offering them additional bonuses or rewards that they value.
However, you might be putting the sales of your other products at risk. So, implement such a scheme only when you need to push the sales for a particular product.
7. Split Incentives
A split incentive program can add excitement to your dealers’ programs and improve dealer productivity. You can ask two or more dealers from different locations to work together and achieve specific sales targets. This can be done by offering double bonuses to both dealers without any differentiation, i.e., each of the two dealers receives equal benefits upon reaching the target.
8. Dealer-Affinity Programs
To make the best-performing dealers valued, you can organise special meetups. Such meetups should provide the dealers with opportunities for networking, learning, and interacting with relevant managers at the company. Dealers from different locations and backgrounds can connect and learn from each other.
9. Sales Pusher Programs
To promote sales during a particular season, you can come up with short-term incentive schemes for your dealers. These schemes can either be target-based or performance-based. Offering bonuses or incentives based on short-term sales goals can be very effective in accelerating sales during a particular period.
10. Database Programs
The importance of customer data needs not be defined as every business is aware of it. This data will help you understand the interests of your customers and recommend products relevant to their needs. As your dealers are connecting directly with your consumers, you can collect customer data only through your dealers.
Incentivizing customer data collection by your dealers would be the best way to do it. The more data they collect, the more rewards they offer. Using your customer data in the right manner can be much more profitable for a business than you might have expected.
Build The Most Effective Dealer Incentive Program
Dealer incentive programs must be simple and offer rewards valued by your dealers. You can reward the dealership or specific employees at the dealership. The brand’s relationship with the dealership plays an important role here. However, rewarding the dealers personally for their business and achievement is also important.
RewardPort can help you create and execute an effective dealer incentives program for your business. RewardPort offers you access to thousands of the latest rewards products and a quick setup for the program.
Frequently Asked Questions: -
Increasing profitability is a sum total of trust, value and costs. While cost reduction is important, it only serves as baseline hygiene, i.e., increasing the survivability of the dealer’s business during hard times. Gaining the trust of the consumers and offering value will ultimately improve the revenue potential for them.
Brand loyalty, defined as repeat purchases of a specific brand based on the perception of higher quality and better service than any competitor, is not price dependent. Companies with high brand loyalty grow revenues 2.5 times faster than their peers in the industry.
Any dealership which meets the minimum qualification criteria should be eligible to participate in the dealer incentive program. For example, regional dealerships, dealerships with a specified minimum turnover, etc., can be the criteria for qualification.
Top 11 Dealer Incentive Program Ideas for 2023
A dealer incentive program encourages your channel partners, distributors, and resellers to adopt specific behaviours. The program should reward them with worthwhile incentives for acting as per the need of the business from time to time.
Depending on your market, channel partners can take on a variety of forms and come from a variety of industries. They may be distributors, resellers, independent retailers, affiliates, or even value-added service providers. Consider using channel partner software to make locating them simpler.
In essence, anyone who markets your brand but does not actively support your company can be a partner. Through channel partner programmes, you can most effectively make sure that they are elevating your brand above the competition.
1. Rebates
Rebates are sales-driven incentives that motivate your dealer incentive program to increase their sales of your goods. They are compensated with a portion of the sale. Rebates can be categorised based on the type of consumer and a corporate goal.
- Retention discount
- Blend rebate
- volume discount
- growth subsidy
The most typical incentive scheme is rebates. You’ve probably used one in the past. Consider purchasing a television on Black Friday. You’ll frequently need to send in a form to receive your discount from the sticker price. This implies that you make the whole payment at the register and get your rebate later.
2. Sales Performance Incentive Funds (SPIFs)
SPIFs are intended to motivate the sales force of your dealer incentive program to favourably promote your brand above rivals in exchange for a reward. These bonuses go to the actual sales representative (not the partner).
SPIFs are a great tool to motivate your channel partners or dealers to work more, especially during sluggish or off-peak periods. Knowing how to utilise them effectively and which sales incentives work best to encourage sales habits are the key skills. Here are some examples:
- Credit cards
- Tickets for entertainment
- Hi-tech devices
- Weekend vacation
- Executive lunch
3. Market Development Funds (MDF)
MDFs are tools you provide to your dealer incentive programs to aid in their marketing and sales initiatives. These rewards could be monetary, knowledge based, or response based.
MDFs are used by marketers in your channel partner teams for a variety of projects, frequently to raise local brand awareness. Here are some instances of how they might employ MDFs:
- Support webinars
- Radio ads
- Start a marketing campaign
- Reserve a space at a trade expo
4. Deal Registration Incentives
Arrange a referral program for partners with a finder’s fee or referral fee as the referral program incentive.
Channel partners typically register online, where you can assess the quality of the lead and choose to accept or reject it. If accepted, your partner has a specific amount of time to complete the transaction before losing their incentive. Never forget that a partnership requires two people to be successful. Always assist your partners in closing the deal during this time by offering support.
Programs for deal registration are an excellent technique to examine consumer behaviour to pinpoint and improve a successful sales cycle.
5. Discounts on Wholesale Products
You work with a variety of customer categories while using B2B wholesale incentives. As a result, each sort of consumer should have a somewhat distinct incentive scheme. Most businesses base their dealer incentive programs and rewards on the amount and frequency of their purchases.
The best way to manage the many packages is to make pricing and term lists for each client or persona. By doing this, you can make sure that you’re always charging your partners fairly.
Depending on how much demand your partner is experiencing, your channel partners may request that you provide a quantity-based discount. Based on the overall order, or total value, of the things you ordered, you would establish pricing tiers.
6. Cross Marketing
The method involves networking with channel sales partners and cross-promotion. The sale of channels involves cooperation. Because a rising tide raises all boats, you benefit when your spouse succeeds. This can involve connecting on LinkedIn and promoting your partner’s marketing and campaigns in tandem on social media.
Channel sales inevitably involve networking. Partnerships will grow stronger if you are connected on social media and provide the groundwork for a real relationship. Your working relationship will be built on a foundation of connected channel sales techniques.
7. Have the sales and marketing materials available
Make sure your partners have the tools they need to succeed while leveraging channel sales. Collateral must be accessible and distributed across channel sales partners, whether it be sales kits for resellers/distributors or end-user marketing materials.
Marketing collateral: The leads for channel sales are brought in by marketing teams. To increase awareness of their products and services, manufacturers and suppliers can control the messaging associated with their brand by employing marketing materials.
Sales Support Materials: Sales training resources help speed up growth and guarantee that your channel partners can effectively explain a product’s or service’s value proposition. Competitive data sheets, interactive webinars, sales scripts, client testimonials, and other marketing materials are examples of this type of collateral.
8. Upsell Meaningful Connections
Put quality before quantity. Organisations frequently look to enhance their partners while trying to grow channel sales. Quality must always take precedence over quantity, though. Before going out to make new friends, concentrate on strengthening your current connections. How can you improve the sales performance of your present partners?
9. Communication
The solution to this problem’s primary cause lies in effective communication. Since so many variables are at play, such as consistency, availability, frequency, or even confusion now of contact, cross-channel communication can be challenging.
Additionally, there are numerous parties involved in channel sales, and while they often have the same goals, different companies represent various viewpoints. As a result, the messaging is inconsistent throughout the channel.
Like incentives and incentive schemes, communication breakdowns within your channels need to be obvious. Partners should be aware of who to contact about concerns.
10. Explain Rewards & Incentive Programmes
Incentive schemes are typical in channel sales. Give your partners valuable incentives, and they’ll work hard for you. Even though most channel sales partners currently have incentive and reward programs, it’s surprising how frequently they can be disorganised and hence useless.
Metrics for incentive schemes for channel sales must be made explicit. This entails having clear expectations for each channel’s sales and revenue yield, which should be supported by adequate research.
To build incentive programs, a precise assessment of each sales channel’s potential, including the number of potential consumers, the size of those customers, and the revenue potential are required.
11. Put Quality Before Quantity
More partners are not always better than reliable partners. Retaining your current partners is far more cost-effective than finding new ones, especially if you’re in the manufacturing sector and working with channel partners.
The world of manufacturing is small. Finding a new mate is expensive, and there aren’t that many of them out there. Invest in your channel partners when you find them. Give your channel partners the tools and encouragement they need to succeed.
Conclusion
At RewardPort we curate programs, especially for your dealers with a dedicated team of expert marketers ensuring repeat sales. Our programs are cost-effective and customised as per your needs.
Frequently Asked Questions: -
Offering incentives to your dealers can have the following benefits:
- Motivates them to sell more and consequently, your revenue goes up
- A strong relationship between you and your dealer
- Dealers work harder to earn more incentives.
To create a dealer incentive program, you first need to identify your goals and be very clear about what you want to achieve with this program. After that, set a budget and decide the rewards or incentives accordingly. The rewards can be monetary as well as non-monetary. Just keep in mind that the incentives are good enough to motivate your dealers.
The terms of the dealer incentives programs can be flexible, and you can decide the same on your own for your dealers. A few things that you need to include in the terms are:
- The requirements: Keep the eligibility for incentives higher than the sales achieved by your dealers in the last year.
- The rewards: Also mention clearly what type of rewards/incentives you are going to offer.
- The rules: You can add some general rules as well. But make sure to keep them simple and easy to understand.
Why Do You Need Digital Rewards for Channel Partners’ Program?
The world is becoming more digital. Digital has gained an influential position with consumers of almost all sorts whether it is business-to-consumer goods or business-to-business transactions. Businesses must embrace digital to keep up with the market trend and consumer growth. This includes not only posting their information online but also digital engagements in the form of rewards to aid in the success of their incentive programs.
What are Digital Rewards?
Digital rewards are incentives delivered via an encrypted link or QR code to motivate behavioral outcomes and increase engagement with a specific audience. Digital rewards provide incentive program managers with a variety of delivery transfer options as well as real-time reporting and analytics.
This type of reward is typically available instantly, is simple to use, and the redemption process is encrypted to ensure a secure transfer to the qualifying participants.
What is the purpose of a digital rewards platform?
A digital rewards platform is one way a company can adapt to the digital age. It differs significantly from traditional rewards marketing, which employs physical rewards such as vouchers or coupons. Physical rewards are limited in versatility and convenience, and they can be misplaced, torn, or lost.
A digital rewards platform improves customer retention as well. It provides a reason for customers to be loyal, and loyal customers are good news for any business because they spend up to 67% more than new customers. It even allows for referrals, as customers can be rewarded for telling a friend about your company.
When to Use Digital Rewards Platform?
Consider what your company could accomplish with a digital rewards platform. It is beneficial not only to cultivate customer loyalty, but also to anyone with whom your company is involved.
If your company has:
– Distributors located across the country, hundreds or thousands of kilometers apart, can be easily rewarded when they meet their targets.
– If you have a large number of branches or thousands of employees, you can instantly reward them on their birthday or working anniversary.
– With many clients spread across the country, you can reward the VIP client group.
Why Are Digital Rewards Beneficial?
Everyone in your channel partner incentive programs has one thing in common: they don’t want to wait to be rewarded. Your incentive program participants will have to wait, sometimes for several weeks, from the time they redeem their reward to the time they receive it. This is typically the case with merchandise, mailed prepaid cards, or checks.
Virtual gift cards and virtual prepaid cards do not have this issue. Considering the demographics of your channel partners you can choose the appropriate reward options for them with RewardPort. Few of the popular reward options are:
- VacPac for vacation packages
- AirPac for air travel benefits
- Sweepstakes with multi category rewards
- Cine Rewards
- Free Bucks for direct cash benefits
To offer digital rewards properly for your channel partner incentive programs or others, you will need a few things, including the right reward options, a good reward management system, and incentive management software.
How Can You Put Digital Rewards to Use?
Digital rewards are frequently used in incentive program schemes such as instant win games, sweepstakes, point accumulation, and code redemption programs. They are intended to persuade customers to perform an action or engage in a qualifying behavior. After completing the action, the participant receives points, a token/code to redeem in a game or a reward product. It’s straightforward and effective.
- Review participant engagement regularly to ensure that they are reaching their full potential
- Change the mechanisms for delivering rewards based on program and participant preferences
- Be careful not to appear spammy by being overly enthusiastic in communications and notifications
- Ascertain that your program has well-thought-out scripts and touchpoints
The rewards available through this digital process include name/brand gift cards, prepaid cards, merchandise, and experiential opportunities. The participant begins the process by receiving a text, email, or completing a scan or form. The digital component of the process connects the reward to simplified reward issuance and real-time reporting.
When it comes to engaging your participants, the possibilities for types of rewards associated with the digital process are limitless and working with the right technology provider ensures a frictionless redemption process. What incentives does your company have to offer?
Frequently Asked Questions: -
Each digital loyalty card is associated with a customer's online account. Unlike physical loyalty cards, which require brands to manually record every transaction and offer, digital cards save time by allowing for instantaneous changes.
Yes, in most cases, as long as you don't have a balance and the annual fee (if any) is less than the value of the rewards you earn each year. In any case, knowing how to get the most out of your rewards credit card is beneficial.
Gift Cards are purchased as "cash value" items for the purpose of gifting. While reward cards are intended for customers to earn points and redeem reward offers.