How to reward your channel partners rightly?
It has been a good quarter for Biswashish Ghantayet, a channel partner for seven FMCG companies in Rourkela. His efforts over the last three months in scaling up the business and meeting the sales targets set for his distribution venture have exceeded by 30%. He was incentivized through a rewards program account, which he could verify on his mobile phone. Through this he can instantly redeem his earned points maybe by selecting a travel gift card to go on a luxury holiday to Australia. He is happy that he has rightfully earned a reward and is able to choose a gift of his choice. Along with him, there are over 150,000 happy channel partners across India, who are the driving force for leading FMCG companies across India.
Impactful advertising campaigns by FMCG brands are also required to be strategically reinforced by innovative trade marketing initiatives to ensure targeted product placement and sampling. These functions are accomplished by the channel partners who measure up to meeting the set business objectives. The success mantra in getting that reach and coverage to a FMCG brand lies in its multi tier model that it follows which includes the stockists, super stockists, dealers/distributors, wholesalers and retailers. Alongside, this implies that trade marketing programs are also required to be designed and executed in resonance with the needs and desired of this partner segment.
Can we use the same marketing techniques used with consumers for channel partners too? B2B marketing is a different ball game altogether. A key aspect for a brand is to build a good relationship, trust and loyalty with their channel partners in the long run. To build these foundations, there is a greater need to appreciate as well as reward them in the right way.
Since channel partners play a critical role, brand owners have realized the importance of appreciating and giving them the due rewards that they deserve in a timely manner. In fact, distributors not feeling properly incentivized is an existential scenario in the network. This leads to them not being motivated and slowly will have an impact on the brand sales.
In the FMCG sector, brands reward their channel partners generally during popular festive seasons. In the past, a cash based bonus was the most common way to reward and appreciate a channel partner. Cash proved to be an easier way of incentivisation for the brand as they didn’t know the personal preferences of their channel partners. Slowly this moved to giving high value aspirational products such as motorcycles, gold coins, home appliances, smartphones and experiences such as travel to giving educational perks to the children of the channel partners. When they receive it for the first time they will be delighted, but how many times can you keep giving these products again and again? Who will keep track of what you have given your channel partner last year to this year? What if he/she already has a washing machine at home and you giving the same product is not going to motivate them or show that they matter to you.
Noticing this gap, brands realised that one size does not fit all when it comes to channel incentive programs and there is the complexity of different levels of performers. In FMCG, there is also the complexity of one distributor working for multiple brands giving a greater need to achieve loyalty through such programs.
Thanks to technology and its convenience, brands are finding newer avenues in engaging with their channel partners by offering innovative and more meaningful rewards. This is when personalized rewards programs came into existence and use tools such as gift cards to woo their channel partners. Brands also can avail the option of personalizing the gift cards for different occasions, based on the achievement and adding that personal touch. Channel partners are also evolving and prefer to do their own shopping using these gift cards and vouchers. Loyalty programmes coupled with artificial intelligence is used to provide personalized rewards and also gives the flexibility to change the reward points depending on the sales on a real time basis. These innovations have also made the entire process transparent and there is no bias involved thus enabling the best channel partner get his/her deserving reward.
Technology based incentive programs will continue to evolve. In fact, social loyalty will take its course into these programs where your channel partner will be given badges of honour to be displayed on their Facebook, Linkedin or Twitter. There will be better use of analytics in the near future. Since brands are expanding into newer markets, their loyalty programs will also have the ‘glocal flavour’ thus catering to their channel partners across the globe.
It is no wonder that gift cards are gaining popularity as ultimately they give the power of choice to the receiver, which in this case is the channel partner! Ensure that your channel partners are adequately rewarded this year by presenting them with a personalized gift card and thus giving them the freedom of choice.
Needless to say, building a strong network of partners is based on factors such as trust, faith and collaboration.
(Mr Pratap TP is the Co-founder & CMO at Qwikcilver Solutions. QwikCilver Solutions Private Limited provides gift card and stored value solutions for various brands and retailers).