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Inspiring
Resellers |
| U.S.
companies spend more than $5 billion on incentive programs annually to
motivate retailers, agents, distributors, brokers, and other middlemen
to sell more of their products. To maximize performance of their
resellers, the biggest names in the travel, automotive, technology, food
products, and insurance industries all have strategies encompassing incentives,
recognition, meetings, and training. Reseller incentive strategies differ
from other relationship-building efforts in that they often have short-
or long-term goals linked to sales, retention, or participation in company
co-op marketing programs. Your program should be structured to reflect
the type of middleman you want to motivate. Here are 10 steps for implementing
a program for middlemen. |
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Steps
to Success |
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| 1)
Specify Your Objectives 2) Who is Critical? 3) Determine What's In It For Them 4) Structure the Program 5) Determine Your Awards System 6) Develop Your Budget 7) Decide Who Will Run the Program 8) Establish a Communication Plan 9) Launch the Program 10) Fulfill the Integrity 11) Conclude and Evaluate the Program |
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| 1)
Specify Your Objectives Begin by specifying your objectives in numeric terms. Example: Increase sales by 10% in the third quarter. |
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| 2)
Who is Critical? Determine which resellers are critical to your business. Identify what these target audiences can do to help you achieve your objectives: stock more product, participate in marketing or training programs, put up displays, participate in co-op marketing programs, or provide customer databases. |
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| 3)
Determine What's In It For Them Consider sponsoring a customer council where top resellers are invited to express their needs and concerns. Dealers and distributors often react more enthusiastically to strategies that help them address fundamental problems, such as fighting competition, improving the training and retention of salespeople, building consumer loyalty, or building sales of a product or service category. |
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| 4)
Structure the Program When building your incentive program, consider these options: Open-ended strategies motivate resellers to stock or sell more by setting goals above the past year's quota. Closed-end strategies distribute awards to the top performers in each volume category or region. New product introduction is an approach that budgets a small amount of your new-product budget to get dealers to increase their commitment to your product. Plateau programs reward dealers or distributors in an increasingly significant way for making incremental purchases, such as 5% or 10% above last year's quota. Cooperative marketing programs give resellers bonus points for using co-op dollars, putting up displays, or participating in a training program for salespeople. Product-specific programs offer bonus points to distributors who sell or buy more of a specific product. Database programs offer dealers a reward for providing customer names for co-op direct marketing or telephone-sales solicitation on behalf of your company's product. Customer-affinity programs invite top distributors to special meetings that blend training, motivation, and entertainment. Sales/purchase incentives promote sales in a particular season to maximize results. . |
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5)
Determine Your Awards System
Publicize the top achieversit's easier to publicize tangible rewards
than cash bonuses, which can create jealousy and spur questions about
compensation. |
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| 6)
Develop Your Budget If you structure your budget properly, the program will cost relatively little. Incremental costs will be incurred if the program generates improved performance, but the added revenue should make it worthwhile. Fixed costs, such as administration, communications, and tracking, start at $25 per individual per program, not including development costs and time. If the program is properly structured, award costs come into play only if the group achieves its goals. |
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| 7)
Decide Who Will Run the Program Establish whether you want to implement the program on your own or outsource all or part of it to a company to handle program development and fulfillment, administration, database, and other functions. However, companies often find it difficult to provide their travel fulfillment. |
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8) Establish a Communications Plan Make sure your reward program is easy to understand and filled with benefits for your target audience. Develop a theme that relates to your other marketing themes. Communications should be monthly for longer programs (six months to a year) and biweekly for shorter programs. Use printed materials, e-mail, and Internet and Intranet sites. |
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| 9)
Launch The Program Time your kickoff to coincide with your overall marketing effort. Make adjustments or send out additional information based on a month-by-month check of results. Consider how you will announce the program: direct marketing, e-mail, Internet, advertising, sales calls, a personal letter, or a combination of these elements. |
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| 10)
Fulfill with Intergrity Whatever you've promised the top achievers, deliver it. The point of the program is to make achievers feel special and to make their colleagues eager to perform during the next program. Publicize the achievers' performance and present the awards promptly and as personally as possible. |
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11) Conclude and Evaluate the Program When the qualification period is over, generate reports immediately and notify all participants of their final standing. Then look carefully at the results to isolate the factors that could have affected your program. Consider tracking your resellers' performance after the program to see whether the momentum is sustained when no incentive program is in place.. |
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Inc., is not responsible for content on external Web sites. ©2009 Montrose Travel. All rights reserved. CST# California: 1018299-10; Iowa: 763; Nevada: 2003-0393; Washington: 602-341-432 |
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