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Deploy New Incentive Reward Technology To Increase Sales

July 30, 2018
A thriving supplier-distributor relationship is possible when distributor and manufacturer interests are aligned.

By Steve Damerow, CEO, Incentive Solutions

In an HVAC sales channel set-up, manufacturers can benefit greatly from relationships with distributors. Well-managed distributor relationships lead to increased reach and revenue for the supplier, while the distributor has access to a trustworthy brand with a steady supply of excellent products. There are some hindrances to a thriving supplier-distributor relationship, namely the fact that the two parties’ interests often aren’t exactly mutual—but you can learn how to align these interests.

Manufacturers traditionally have relied on incentives such as SPIFs (sales performance incentive funds) to gain mind share, but the administration process for both sponsors and participants was laborious and time-consuming. Now, new incentive program technology apps can greatly reduce administrative burden, increasing timeliness and efficiency with data retrieval benefits previously not possible.

This encourages engagement in the incentive program—and, ultimately, a significant increase in sales. Luke Kreitner, VP of Loyaltyworks, said, “The smartphone is a marketers’ dream – instant and personalized access direct to/from your customer.  The payoff?  More engagement = more mind share = more sales!”

At Incentive Solutions, one of the clients we designed a successful incentive program for is Mitsubishi Electric and Cooling and Heating. This contractor incentives program ran for two months and helped Mitsubishi increase sales of ductless heating and cooling units by 45 percent, achieving an overall return-on-investment (ROI) of 307 percent.

Incentive Solutions achieved this result by climbing into the sales trenches with Mitsubishi and figuring out how to turn their pain points into new sales and marketing opportunities. The effort paid off handsomely and Incentive magazine recognized us with the Motivation Master in Channel Sales Award.

Many suppliers implement loyalty programs to increase market share. However, the process is not as simple as merely executing the program and watching it work 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, engage the following strategies.

Ensure that rewards and payouts are satisfying

If the rewards and payouts aren’t noteworthy, the program won’t be worth participants’ time and effort. Also be aware that rewards such as 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.

However, modern reward platforms are an exciting, user-friendly experience that enable participants to enjoy a vast array of items or travel options, with delivery within days, and even instant retail pick-up capabilities. Tangible rewards carry better tax consequences than cash, have long-lasting trophy value, and give participants more reason to go to your marketing website.

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, and even instant claims validation.

Use an interface that’s truly engaging

Today’s informed 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 and keep them informed. New technology allows you to do just that. Processes that used to take weeks/months are now instantaneous for the distributor and the program administrator.

For example: Contractor installs unit. Uses smart phone to scan ID number. Smart 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 are 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.

Communicate objectives the way 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.

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, flyers, postcards, texts, or calls. The more successful your program communication is, the more information you can gather about your program’s participants and their needs.

Focus on distributors with the highest profit potential
Some channel partners may have a healthier budget to spend on your products and others 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.”

In addition, while you should keep track of your profitable partners, it’s also important not to forget those with small budgets who still effectively promote your brand.

In conclusion, stay apprised of new reward program technology. View an online demo on how it makes incentives and loyalty programs far more effective. Use recognized best practices to create an incentive program that overcomes challenges in channel sales relationship—and helps you increase sales exponentially.

Steve Damerow is CEO of Incentive Solutions (www.incentivesolutions.com). He is a published author on various incentive industry topics and hosts the national radio show “Business Matters”. Incentive Solutions currently manages more than 100 incentive loyalty programs within the HVAC/plumbing/construction industries. Steven Damerow can be reached at: [email protected]; 678-514-0203.