Customer loyalty programs are popular strategies businesses use in rewarding their customers to encourage them to become repeated buyers. But how do small businesses serving as distributors for large brands get rewarded for their services?

The strength of many developed economies around the globe is the small businesses that act as distributors and channel partners for major brands and corporations. For companies that have to deal with a large customer base, relying on an effective distribution system remains a reliable way for them to reach their large audience.

Companies that have a diverse distribution channel would always desire for their products to be showcased and sold to consumers to put them at an advantage over their competitors. To achieve this, you would have to implement effective distributor loyalty programs to ensure your distributor places a premium on your products.

Your distributors are more like local sales clerks that run around the streets, projecting your products to prospects and customers in the best possible way. They make personalized sales calls and help to enhance your brand image. Distributor loyalty is an important asset to businesses that rely on them to reach their customers.

It is a fact that the profitability of many organizations is dependent on the enthusiasm of distributors. So it would help if you implemented good distributor loyalty programs to promote a good sense of responsibility in your distributors regarding your company sales.

 

Importance of distributor loyalty programs

 

1. Enhanced distribution

Distributor loyalty programs help to enhance your product distribution to reach a wider audience. Incentivizing your distribution system motivates your channel partners to prioritize and place a higher premium on your products over those offered by your competitors. Channel partners are motivated by what is in for them if they have to showcase your products in the best possible way.

 

2. Better brand recognition

Distributors play a key role in promoting your brand. Successful distributor programs incorporate open and transparent communication channels in their distribution network to convey vital information and promotions about their products to their distributors.

 

3. Enhances customer loyalty

An effective distributor reward program can have a strong impact on your customer loyalty. Customers are searching for personalized relationships, responsive customer service, and an overall fulfilling experience with a brand.

 

Best Distributor Loyalty Programs to Choose From In 2021

Let’s look at some of the best loyalty programs you can choose from to help bolster the commitment and dedication of your company’s distributors.

 

1. Distributor rebate programs

Many large companies have always relied on distributor rebate programs to drive sales. Its impact has been largely felt in many industries across the globe. Distributor rebates have proven to be quite beneficial to many companies as they can be a deciding factor in the profit or loss of many businesses.

A distributor rebate is a refund of the purchase price offered to distributors after a sale is complete. Distributor rebate programs are usually offered to promote products and reward distributors who purchase more by giving them better margins. Distributors see rebates as a way of saving costs and enhancing profitability.

Types of rebate programs you can offer to your distributors

  • Growth rebates: Growth rebates are offered to distributors to drive the volume growth of a particular product. It is only paid once a targeted percentage in volume is achieved.
  • Mixed rebates: Mixed rebates are offered to distributors to sell many products with a high-profit margin.

 

2. SPIFF

SPIFF is a short-term sales incentive program aimed towards distributors to drive sales. It helps to enhance the relationship between you and your distributors and improve performance. Before launching a SPIFF distributor program, you must set the proper framework to achieve a successful distributor program.

The following steps can help guide you through implementing a profitable SPIFF program for your partners.

  • Set your SPIFF participation to match your business needs and goals.
  • Examine your past SPIFF program to determine where you went wrong and endeavor to correct it.
  • Choose from a range of popular reward SPIFF options such as all-expense travel trips, prepaid cards, merchandise.

 

3.Customer incentives driven through distributors on your behalf

A good incentive program has to be designed for all layers, including distributors, resellers, and customers. Businesses can have their distributors launch customer incentives campaigns on their behalf. Distributors relate more with customers. So they are in the best position to understand what the customers desire to encourage them to become repeat buyers.

A customer loyalty program helps to increase sales and improve profits. Studies show that 95% of consumers want companies to find ways to reward them for their loyalty. Allowing your distributor to drive your customer loyalty program is a sure way to maintain sustainable growth and stay relevant in the market.

 

KPIs you need to track to make sure that your distributor loyalty program works for your business goals.

  • Engagement: Customer engagement is very vital in measuring how effective your distributor loyalty program has been. Customer Engagement entails measuring the customer’s assessment of your brand and also their emotional attachment. Exploring data that provides insight on the chances of customers repurchasing and recommending your product to friends and family is crucial to your overall business goals.
  • The number of participants: You can effectively track if your distributor loyalty program works for your business goals by the number of participants in the program. If your distributor program is unrealistic or not enterprising enough, participant turnout would be poor. To avoid low participation in your distributor program, ensure you implement a comprehensive campaign tailored to serve the aspirations of your distributors.
  • The general growth of sales during the period of an incentive program: KPIs are vital to incentive programs as they help measure the success of the program and the growth of your company. This KPI is determined by the general sales performance achieved compared to the period without any incentive program.
  • Growth of sales in a given territory: Measuring sales growth in any given territory gives you a fair idea of how well your distributor reward program is doing in a particular area.

 

 FAQS

How can a company motivate distributors and resellers?

A company can motivate its distributors and resellers by launching a good reward program arranged to foster the relationship between distributors and customers to increase sales and growth.

 

What are the most used types of dealer incentive programs?

Some of the most used dealer incentive programs are distributor rebates, SPIFFs, and customer loyalty programs driven by distributors on behalf of the company.

 

How to measure the success of a dealer incentive program

Some ways to measure the success of a dealer incentive program are customer engagement, the number of participants, overall growth sales, and sales growth in a given territory.

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