Distributor Incentives Schemes: Reward Programmes That Drive Growth
Your distributor incentive scheme needs to make a big impact to drive an uplift in indirect sales you can shout about. So, when launching a new incentive programme for distributors it needs to perfect. No long-winded processes. No boring content. No uninspiring rewards. It needs to WOW!
Having a distribution network enables your business to grow and reach a much wider audience. It's a fantastic way to expand into new markets with less risk and upfront investment. Just like your in-house sales team, your distribution network will need support and encouragement when it comes to smashing those sales targets.
To maximise the effectiveness of your distributor incentive programme, we have some best practices to share.
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How to motivate your distributors
We all need a little motivation every now and then. Whether it’s to be healthier, get more sleep, or get more work done, we’ve all been there! So, if you’re finding that some of your distributors may be lacking in motivation, that’s normal.
You may find that only some of your distribution partners actually do operate the way you'd like them to –– i.e. they stick to your brand guidelines, spot upsell opportunities and demonstrate your product in the way you intended.
The rest hold a lot of sales potential, but you're just not tapping into it... yet.
That can be pretty frustrating, right? Especially when you know it’s possible to achieve more!
To solve this problem, you need to personalise your approach. What makes each individual in your distributor network wake up in the morning and want to start selling your brand? The answer is unique to every person in your sales channel, of course.
What you need is to gather enough data to effectively segment your distributors and target them with messaging and strategies that are going to pique their interest on an individual level.
Sounds really complicated? Don’t panic - it doesn't have to be!
We're here to help you build rewarding relationships and provide the tools your distributors need to grow profit. Let’s explore some of our guiding principles in how to motivate your distributors.
How to create long term distributor loyalty
Understand what drives them and create an incentive programme around it
It's time to find out what your distributors’ intrinsic motivators are. What encourages them to go the extra mile? What makes them feel positive towards a brand? What kind of rewards would motivate them?
Don't generalise; not everyone wants tech or household appliances––although there will be those that do. So how do you get the balance right?
The solution is to offer a comprehensive distributor rewards catalogue that provides the best and most suitable reward selection. At first, you may be casting your net too wide. But as distributors interact with your reward platform, you'll gather enough data to find out where the big winners are and how you can supplement or optimise those rewards.
Every interaction feeds your data and allows you to optimise your reward catalogue to suit. This means your distributors will have something to get excited about every time they gather points for positive sales activities.
Give them an easy life
Distributors don't want added complications in their already packed schedules. You win them over with excellent products that they can get behind, and support them with consistent and useful brand insight in easy to digest chunks. This means giving them the sales and marketing tools to succeed.
Cut out the admin and provide all the necessary resources to run your campaigns and promote your product.
Sales scripts, demo videos, infographics, testimonials and spec sheets are welcome additions to any seller's toolkit. And don't forget, your distributor may also stock competitor products. If one supplier provides him with a clear path to a sales win and the other only offers the bare minimum in sales support, which brand do you think they'll feel more confident selling?
Build a relationship with them
A great relationship with your distributors will encourage higher engagement and more sales. If they feel valued and appreciated as individuals and not just an additional sales channel, then they’re more likely to invest more time in your brand.
But how do you actually build and reinforce this relationship?
With communication and a genuine vested interest in their success! This begins at onboarding, training, and of course, the effort and consistency with which you communicate. Sending regular emails, sharing newsletters, openly listening to their suggestions, success stories and concerns, and simply checking in will help you establish a rewarding, long-term relationship.
Ultimately, you want your distributors to be your brand champions.
They should sell your products with enthusiasm because they truly believe in the quality and your brand’s core values.
Start with the basics and work your way up, creating an environment that fosters success for all involved in this process: end-users, distributors, and you. You get what you put in, so when you’re motivated to run your distributor network like a champ, your distributors will be inspired to deliver the results you desire.
How to harness powerful data from your distributor rewards programme
Question - do you actually know every single person who sells your product?
Do you know what your distributors sales approach is? Do you know if they need additional resources or support from you?
If you're looking for a way to get the inside scoop on your distributor network, reward programmes are an easy way to do it.
Your distributor reward programme can help you gather important data that drives change and optimisation across your whole enterprise. From understanding your end-customers to finding crucial upsell opportunities, insights into your distributors’ activities provide countless benefits.
Most importantly, data shines a light on what truly inspires loyalty.
Ultimately, you want your distributors to sell your product because they believe in your brand, not because there's a carrot dangling somewhere. That's why a great incentive programme will prioritise product knowledge, brand engagement, and nurture positive behaviours that create brand ambassadors. Every time users interact with your platform, they are providing you with data that demonstrates these behaviours. Here’s how...
Getting to know ‘em
It's likely that your distributor network stretches far and wide. So how do you personalise rewards for folks that you may scarcely see?
This isn't an unusual scenario, particularly for a large organisation.
Your rewards programme will help you answer that all-important question: "What do they really want?" High chances are, it's not always rebates, discounts, or vouchers because these things just aren't memorable. But your reward programme can do so much more than just offer insight into how to stock an appealing rewards catalogue. It can give you an overview of the type of behaviours distributors exhibit so that you can a) ensure there's alignment with your organisational values, and b) drive better performance by attracting and stimulating their engagement.
Through surveys and questionnaires, you can gauge how the people in your network feel about your campaigns, products, and rewards, helping you to be proactive about improvements and quick to offer support and information where gaps have been identified. Add some points for their efforts to support and help them build their balance towards something they value.
Giving them something to aim for
There's a difference between a reward and a gift. If you're just giving things away whenever distributors vaguely align with your requirements, you're not only losing money, but also missing the opportunity to inspire positive outcomes for your business. That's why you need measurable performance indicators that will show both you and the distributor how close they are to achieving the agreed-upon goals and expectations.
For example, why not make selling a certain volume of product or achieving YoY growth a rewardable action?
Additionally, you could give rewards based on the learning activities they undertake. Help them visualise their progress as the points add up on their dashboard. Your platform will help you standardise what a rewardable activity looks like and make achieving the target feel more tangible for the distributor because they have somewhere to track their progress. In turn, these KPIs make it much easier for you to adjust budgets, course-correct your campaigns and step in with a big “How can I help you?” if you detect that a distributor’s engagement has started to wane.
Discovering where your end-customers come from
So, your distributors just made a sale, and they've logged onto the platform to claim their reward. That's great for them and for you – from a revenue perspective. But is there something more to be gleaned here?
Of course, there is! The more knowledge you have about the transaction, the more context you have around your buyers’ purchasing decisions. Plus, you can observe whether your targeted buyer personas are responding to your marketing. Even better, sectors that you hadn’t predicted would be a suitable match for your product may suddenly reveal themselves to you by simply asking your distributors about the industries their buyers come from.
You may wish to even go a little deeper and enquire about the sales process. Was it hard, or simply business as usual? If this particular individual took some convincing or the sales process had to be adjusted, this may be an opportunity for you to provide the extra support to the distributor so they can get the value of the product across to the buyer more effectively.
Knowing who your distributor sells to allows you to build more targeted campaigns that get better results for your company and inspire confidence in your sales channel partner. But you won't necessarily pick up on that trend unless you have a way of being alerted to where sales are being made, and that's where your platform, and the data it's designed to collect, comes in real handy.
Finding the knowledge gaps
Spotting weak products in your range
Your rewards platform can help you quickly pick up on this issue by highlighting the products that never get submitted when distributors issue their sales for a reward.
You can then come up with a promotion to boost awareness or offer training so that distributors increase their expertise and don't shy away from selling a good mix of your products.
Should your distributor incentive programme be based on cash or non-cash rewards?
Rewarding distributors for meeting your sales objectives is an essential part of keeping them motivated and engaged with your brand, but what's the right approach?
Cash is never a bad thing, right? Or are rewards more effective? Let's find out...
Non-cash rewards help to promote the right behaviours
Any distribution network can end up being unsuccessful if your brand doesn't stay at the forefront of the seller's mind. It can be surprisingly easy for your product to get pushed to the back of the shelf if you don't reinforce positive brand association or give them a reason to talk about your products.
Since the source of a cash reward may be quickly forgotten about, it's better to create engaging reward programmes that help build brand loyalty.
You want your distributors to take up training and improve their knowledge of your product, but if you're merely dishing out a cash reward in exchange for their time on a course or online tutorial, it may come across like remuneration for a chore.
Non-cash rewards or personalised experiences can help to create buy-in and encourage sellers to be even more authentic when pitching your brand, because they’re truly invested. Most importantly, they make your brand more memorable.
Experiences tend to stay in people’s minds far longer than cash and create a positive association with your brand, particularly if you get creative.
A great example of this is Ford, who devised a penalty shoot-out style game incentive scheme to reward those who sold three cars - with prizes ranging from £50 vouchers to football and entertainment merchandise.
From a psychological perspective, there are a couple of other important factors at play.
Studies have found people get a kick (no pun intended...) out of knowing they have received something based on their performance. They are also strongly motivated by the social kudos this gets them among their peers.
Personalised rewards builds better relationships
Letting distributors choose something personal from a reward catalogue will give them a tangible incentive that acts as a reminder that their efforts to promote, sell, and stay loyal to your brand do pay off.
Experiential rewards also play a significant role because they give the person something immersive to look forward to, create a lasting memory, and form a strong emotional connection with your brand. So be sure to have a good mix of incentives worked into your programme.
The key is picking something that's going to be motivational and fun – not just materialistic. Remember: people are motivated by different things!
Cash rewards cost more... for both parties!
Cash rewards are more expensive, there’s no denying that! And you have to pay for them outright. Unlike points that can be awarded to maximise the performance at the time of the event but may not get redeemed for a few weeks as the distributor builds up their pot. There's a cash flow advantage right there!
What's more, there is little transparency with cash and no evidence to support how its used once its handed over. Unlike a points programme where there is total visibility from claim to sale to points awarded right through to points spent (on what and when!).
Non-cash rewards are usually taxed at lower rates and can be obtained at a discounted price by the business.
This puts a little more control in your hands. As a result, you can make more effective long-term plans for your reward strategy and still keep distributors happy and motivated by ensuring they get something special and worthwhile for all the work they’ve put in.
How to create long term distributor loyalty
Top tips for distributor incentive success
1. Facilitate learning
Distributor incentives aren’t just about selling more. Another objective of an incentive programme should be to make your distributors more knowledgeable and expert at selling your products. That's why part of your programme should focus on training and upskilling. You can use your incentive platform to share learning materials. For example, if you're launching a new product line, you can share helpful sales videos and brochures with your distributors to help them learn more about the products.
More training is going to result in better customer service. You'll ensure that when customers receive an order from one of your distributors, they feel like it's been expertly fulfilled by someone who knows what they are doing. It also means fewer calls back to stores or factories because queries weren't answered properly during the initial sale.
The other benefit of providing additional training is that those skills will be transferable elsewhere in their careers – so not only does it provide immediate value for your business, it also offers a long-term benefit to the individual.
When a distributor takes time to learn more about your products, consider rewarding them for this behaviour. This will not only make them feel appreciated but will also motivate them to keep learning.
2. Outline clear KPIs and ensure distributors can track their progress
Start by identifying the KPIs (key performance indicators) that matter to your business. This will help align the desired behaviours you want to reward in distributors with your company's North Star vision.
Clearly communicated KPIs help distributors understand what's expected of them. This enables them to work out how much extra time or effort it'll take on their part to hit those targets, depending on which level they are at. The end result is that both parties can be in agreement about what success looks like for each other, and there'll be no confusion when reviewing progress reports later down the line.
A distributor not only wants incentives but also transparency into any goals or metrics required - without this knowledge, it's hard for anyone to reach their full potential.
3. Make it simple to use
The fastest way to lose your distributors' interest is to require them to use a platform they can't navigate. Simplicity is key here. It’s a bit like Google… If you can’t find the information you’re looking for on page 1, does it even exist? Do you even bother checking page 2? If your incentive platform isn’t simple to use, your distributors may just give up! You need an intuitive interface, clear and concise information, logical order to how that information is laid out, and clear instructions on how to get started.
It should be easy for your distributors to log in, update their data, claim rewards, view their points, or make changes where necessary.
The platform should encourage your distributors to submit their claims on a regular basis. This will help you to validate claims quickly and ensure the person receives their rewards without delay.
4. Don’t just rely on sales!
Remember, you shouldn't only incentivise distributors for the sales they make – this can have a negative impact in the long term as distributors may focus on quick wins that don’t match the right product to the customers’ needs.
Also consider your sales cycle. If you have high-end products which tend to have a longer sales cycle, your distributors are likely to be earning points less often. If this is the case, you should consider offering other ways to earn points so distributors are being recognised more regularly. This will encourage them to stay engaged and loyal.
For example, you could reward participation in training programmes or you could offer points when they engage with content.
Distributors not engaged in your incentives?
We want to give you an insider's look at just what an effective distributor incentive scheme has in store for your business.
Book an interactive session with our team and we'll go through key metrics like:
- gathering data about end customers
- the benefits of having one centralised dashboard-style interface
- understanding which products are generating revenue versus those that are not
- how to find out what really motivates your distributors to stay loyal to your brand.
A well-structured distributor incentive scheme will keep your resellers reaching for those high-performance targets year-round.