When we create a program to stimulate the sales channel or partners, which we will call incentive channel , we have certain program objectives related to the increase of sales performance.
As with the incentive programs for consumers, expectations are linked to the partner’s influence or sales force acquisition behaviour. Moreover, the B2B motivation programs derived from B2C programs, but obviously the methods and levels used to incite are on a different level.
How does an incentive channel work?
An incentive channel program will always have as strategy the increase of sales performance by influencing the partner’s acquisition behaviour, a sale performance that can be linked to objectives as balancing the mix of sold products (by increasing sales for profitable products), reaching value thresholds or both.
Let us imagine a sports footwear company, that has set as objective to increase sales for women’s sport footwear, but that wants to raise profitability by selling children’s footwear. In establishing the incentive program for sale, a sale that will include both types of sports footwear (women and children) will be more rewarded and will bring the partner more benefits.
Creating attractive motivation mechanisms will determine the program’s success, influencing the partner’s behaviour, but also his relationship with the brand.
Type of incentive channels mechanisms:
1. Discounts awarded on value thresholds. It is the most common way to stimulate sales, being an excellent volume generation mechanism. Discounts can be set at general level, brand or category/product class;
2. Registration of the products in the campaign. Creating a platform through which partners are to receive points following the purchase of products from distributors (indirect distribution), or following the uploading of a transaction report – sell-out (direct distribution). They will receive points that they can “burn” in exchange for prizes;
3. COOP programs (as they are known). Establishing within the partnership a common marketing objective by allocating a percentage of the sales, which will be awarded to the partner for supporting marketing activities. For example, the budget resulting from a COOP program can be used to support the promotion of new products at the store level;
4. Boosting the sales force. Create an incentive program dedicated to the sales team where they receive material benefits. The benefits go directly to the sales force, the action having a decisive role in selling products to traders at the expense of the competition.
Of course, the mechanics mentioned above are those most commonly used, but they can be improved or can grow in complexity depending on the necessity and type of business.
The success of an incentive channel program is based on a few aspects that hold both external considerations: seasonality, the market context at that time, the level of engagement of the partners in the program, but also of internal considerations such as: the level of stocks , the supply capacity of the sales channel, the structure of the product mix, the benefits granted and the communication capacity of the program at the channel level.
The incentive programs should not be seen as loyalty programs.
The incentive programs and loyalty programs are often considered the same thing, but the difference is that the incentive program stimulates a type of action with a time frame, while the loyalty program is long term and focuses on keeping the partners to stay with the brand.
In other words, the long-term support of partners requires an involvement of the brand alongside them, an effort to support knowledge exchange, the identification of market opportunities where both sides have shared interest and last, but not least, a permanent communication.
More than providing product information, brands want to influence their partners in adopting new technologies and techniques for increasing sales while staying in line with new trends. Building a loyalty program requires time and resources capable of sustaining communication and logistics activities.
That’s why we created Rewardiful and Rewards Direct, two platforms built specifically to support loyalty programs.
Want to know more about our platforms? Request a meeting with a specialist in loyalty programs.