__p Acknowledging channel contribution and motivating the community is a task that involves a massive creative approach from distributors and vendors. And often special motivation provided in cash or kind helps build loyalty amongst partners.
p____p Though even poorly designed incentive programs improve performance, a proper analysis of the performance, apart from design and implementation of incentive programs, is a key to sales success. In the last few years, manufacturers have been known to add loyalty incentives to their channel strategy.
p____p These incentives are often in the form of discounts or rebates, ranging from 2 percent to 10 percent. Replacing traditional volume deals, such incentives encourage distributors, retailers, VARs and other channel partners to remain with, or become committed to, a supplier’s line.
p____p A new technology or a hot new product should definitely consider providing loyalty incentives. Even though, at first, a new offering can ‘earn’ loyalty, establishing a loyalty incentive may help when additional entrants join the market.
p____p It has been noted that more often companies rely exclusively on their patent protection to maintain their stand, only to scamper when their sales, shares and profits plunge when their patent protection ends. By employing a loyalty incentive, when the brand is ‘red-hot and ready to strike’, the company can use the incentive as an extra barrier to keep competitors out.
p____p Both vendors and channel partners are taking their resellers seriously, as they employ an encouraging use of lateral thinking for promoting sales and marketing, Also observed is, if there is cash upfront it means suppliers are dead serious about improving both relationships and business.
p____p A loyalty program that duly rewards channel members will help bridge the divide between their suppliers. Charitable events/donations, product promotions, contests, distributor support/training, and industry awards/recognitions are different forms of building motivation in the channel.
p____p Incentive programs can be the single most important performance-improvement tool available to distributors and vendors alike. Under the right circumstances, a properly structured loyalty incentive will drive the channel’s behavior in the right direction.
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