Blog > Channel Incentives

How to ensure sales success in a complex channel ecosystem

Marcelo Custodio de Oliveira, Phd
Marcelo Custodio de Oliveira, Phd By Fielo
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There’s a lot to think about in terms of how to grow, evolve and invest for the future. The building materials industry in particular faces added complexity with its multi-hop distribution model, involving suppliers, manufacturers, distributors, dealers, big box retailers, architects, developers and contractors.

Whether a company is looking to incentivize purchases and benefits at each hop, or to provide distributors with a budget to incentivize downstream channel partners, it needs to be driving more sales through strong incentivization architecture.

There are a few stubborn obstacles preventing companies from getting key influencers to push certain products over others. One is that they currently have no formalized incentive scheme.

Key influencers may be ambivalent to your company’s products. Architects, for example, are happy to include any manufacturer’s products in their drawings and renderings, with no strong motivation to prioritize yours.

To solve this, companies need to create an incentive program in which channel partners earn points and rewards for sales of specific products.

Pushing one product over another

There are a few stubborn obstacles preventing companies from getting key influencers to push certain products over others. One is that they currently have no formalized incentive scheme.

Key influencers may be ambivalent to your company’s products. Architects, for example, are happy to include any manufacturer’s products in their drawings and renderings, with no strong motivation to prioritize yours.

To solve this, companies need to create an incentive program in which channel partners earn points and rewards for sales of specific products.

Push products correctly and effectively

One of the major reasons key influencers don’t push products very effectively is that they lack the proper skills to do so. For example, some architects deliver low quality renderings, making it difficult for developers to make quick purchasing decisions.

Fielo’s research team spoke to a NYC real estate developer who said: “The rendering is my first impression of how the material choices align with the design. If the rendering does not look good, I am much more likely to question the material choices. It could very well be that the architect’s choice of materials are excellent, but I won’t be convinced of that unless the rendering conveys that.”

Case in point: quality renderings are essential.

Channel partners (resellers, distributors, contractors, builders and architects) are also under tight time constraints, which means that they often find themselves sacrificing quality for the sake of expediency, or lack the time to learn about the nuts and bolts of a manufacturer’s product offerings and brand selling points.

Channel partners often lack training, meaning that the material or fixtures they promote are not actually technically feasible. By the time a product request reaches head office, a replacement has to be recommended, often leading to delays in project implementation.

To help influencers gain the skills and capacity to sell products well, companies need to provide them with product, sales and marketing training – and reward them incrementally as they demonstrate improved understanding.

Companies can also offer things that improve marketing prowess, such as skills endorsements and written recommendations on Linkedin, as well as creating blog and sponsor articles referencing a channel partner’s work.

Many building material manufacturers are looking to formalize their channel partner incentive programs. But the majority of those programs are ad hoc and chaotic, as a result of being built on spreadsheets or custom hard-coded systems, and are ultimately unsuccessful.

Savvy manufacturers go beyond using Salesforce as a data dump to using it as a strategic sales tool and as a means of cultivating and maintaining good relationships with their partner base. And they harness modern, cloud-based incentive solutions to automate and formalize incentive programs. Those solutions also provide a platform for building materials manufacturers to extract greater value and insights from Salesforce and effectively incentivize multi-hop value chains.

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