The Right Audience for Your Channel Loyalty Program

When you develop a sales channel loyalty program, it’s crucial to identify the appropriate target audience. Most manufacturers are well acquainted with marketing to distribution partners through sales agents and representatives. Other B2B marketing strategies may include rebate programs or website and social media campaigns to communicate value proposition to a mass audience.

The problem with these strategies? Distributors usually carry a variety of brands, many of whom are in competition with each other. And the distributor principal has little influence over which products their contractors or dealers buy. And they don’t have much reason care which products these customers buy, as long as it’s purchased from them. Frequently, the sales channel point that has the most influence over which products end-customers buy is the distributor sales representative and/or the contractor. They’re the ones who speak directly to the end-customer, offer them insights and answer their questions. Now, guess which two points in the sales channel manufacturers have the most trouble communicating with? Yep. Those with the most sway over end-customer choice.

As a manufacturer, wouldn’t it be nice to access a database that informs you exactly how much of your product contractors purchase and when? Then you’d know when, how and with whom to communicate to increase brand awareness. One catch, though: to make this beautiful database happen, you need customer information and purchase data. Where do you get this information? From the distributor, who may be hesitant in sharing customer data, or from the contractors themselves.

For contractors to willingly provide customer data and purchase history, they need an incentive to do so. It must be worth their time and effort to complete a sales claim form or send an invoice as proof of purchase. So, what’s that magic number? What reward amount inspires contractors to start sending that data to you?

“We’ve found that if the average contractor earns about $500 in reward value over the course of a year, most are willing to participate,” says Luke Kreitner, VP of Sales at Loyaltyworks, a channel loyalty program provider of over 20 years. “This ‘pull-through’ method lets you incentivize those who can ask for your products. You also get a direct link to that person, creating a mutually beneficial relationship.”

What about manufacturers with low-ticket items, those who can’t allocate enough funds to contractors? In that case, it might be better to target the distributor sales rep. Distributor sales reps may not be ultimate decision-maker in brand or product selection, but their influence is nothing to be sneezed at. And getting the distributor a reward worth $500 is much easier, since they can sell a lot more products than a lone contractor buys. Using this “downstream push-through” method, you can still communicate directly with someone who has significant clout in your distribution channel.

To get the best of both worlds, combine the “push” and “pull” strategies engage both the distributor and contractors. With this strategy, distributor reps provide contact and sales data from contractors’ purchases. Then you can build two databases, determine who the primary influencer is and communicate with them.

Remember: it’s absolutely crucial to identify the appropriate target audience! If you target the wrong point of sale or you don’t bring the appropriate value proposition to the table, you’ll be stuck wondering why your channel loyalty program didn’t make an impact.

Jeff Cagle
Director of Sales at Incentive Solutions
[email protected] | 678-514-0212
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Check out our SlideShare on customer loyalty programs