How A Manufacturer Can Build Demand With Strategic Channel Incentives

3 Steps Manufacturers Can Take To Build Demand With Strategic B2B or B2C Channel Incentives

As a manufacturer, you likely find yourself sitting at the very top of your sales channel. From all the way up there, it can be difficult to see, let alone control, what’s happening with your wholesalers, retailers, and customers below. While this may be true for many manufacturers, you cannot let this affect your bottom line.

As a manufacturer which aspects of your sales channel are performing, underperforming, or need a little strategic support. Many times, taking steps to incentivize various key players in your sales channel and your end customers can make all the difference when it comes to driving monthly, quarterly, or yearly sales.

Below we’ve listed three steps to help you get going in the demand building direction.

Step 1: Incentivize Retailers To Purchase and Stock Your Product With A B2B Rebate

As a manufacturer, you have the opportunity to offer retailers an incentive to purchase your product from you or one of your wholesalers and stock it in their store for consumers to purchase.

During this step, you also have the opportunity to learn more about your wholesalers and retailers. It can sometimes be difficult as a manufacturer to get to know every member of your sales channel, but it can help you improve your overall strategy.

Consider what your specific sales goals are when determining which type of rebate to use as each has its own purpose.

Common types of manufacturer to retailer (B2B) rebates

Product launch rebates

When introducing a new product, link spend on the new product to discounts on regular purchases with a product launch rebate.

Volume rebates

Offer your buyers a discounted price per unit when they purchase a specific number, or volume of units. For example, “buy 1-100 units for $100 per unit, 101-500 units for $97 per unit and so on…”. This will encourage your B2B customers to purchase more of your product to achieve a better price.

Growth rebates

A rebate that rewards your B2B customers based on incremental order growth. Similar to volume rebates but growth rebates are paid on incremental growth in volume, whereas volume rebates are paid on all revenue or total volume.

End-of-life rebates

Offer your B2B customers an incentive to purchase an older, or outdated version of your product to prepare your warehouse for a newer, more up-to-date product on the way.

Product mix rebate

Encourage your B2B customers who tend to only purchase and stock a few (or the same) of your products to purchase and stock a variety of your other products with a product mix rebate.

Retention rebate

A retention rebate should be offered to your loyal B2B customers and encourage business continuity.

Information collectible via B2B rebate

As previously mentioned, a B2B rebate is an opportunity to learn about your sales channel partners–especially your retailers who you might not otherwise be connected to.

Tie your B2B rebate to a survey or psychographic questions about:

• The customer (retailer) themselves (EIN, address, phone number, etc.)
• The wholesaler or distributor your customer purchased your product from
• The specific WD (wholesaler/distributor) salesperson the retailer purchased your product from and who serviced their account
• If your customer was offered anything from their WD with their purchase (better credit terms, discounts off MSRP, free shipping, etc.)

From here, you can determine how to use this information to your advantage, whether it be tailoring a future incentive or improving your overall marketing and sales strategy–the possibilities are huge!

Step 2:  Incentivize Members Of Your Sales Channel With A SPIF

A SPIF (Sales Program Incentive Funds) is an incentive program you can offer as a manufacturer to motivate your retail channel partners to increase sales of your product. Through a SPIF your retailers have the opportunity to earn rewards when their salespeople sell “X” number of dollars (or units) towards a specific sales goal or campaign.

A SPIF can be an effective way to get the attention and focus of your retailer’s sales team on your product, therefore pushing your product to the end customer over say, your competitors’ product. By offering a SPIF you’ll likely see sales take off.

Offer a SPIF if….

• A new product is hitting the market and you want it to be adequately introduced to the public
• A specific product is not selling well and could use a little extra push
• Old inventory needs to be cleared from shelves (expiring or outdated products)
• You need to increase profit or drive short or long term sales

Gain loyal and knowledgeable sales partners with SPIFs

SPIFs are beneficial for everyone involved. Your sales partner receives a reward for their hard work and you gain a base of quality, loyal, and knowledgeable salespeople.

With a list of sales representatives who participated in your offer, you can accurately target the people responsible for selling your product with information that will allow you to continue selling your product–and sell it better!

And consider that at some point, that sales partner will have to make the decision to repurchase. This decision will be a no brainer if they saw the value in your incentive and you made selling your product easy!

Read more about how a SPIF can be used to generate sales for your business.

Step 3: Incentivize Consumer Purchase With B2C Rebates

Sometimes steps one and two aren’t enough to drive the kind of demand your company is looking for. After all, there are only so many retailers and salespeople out there to sell your product. That’s where step three comes in–B2C rebates.

A consumer rebate can help you reach many of your business’s sales goals, from driving short and long term sales to gaining market share and breaking into new markets.

By far one of the biggest benefits made possible through a B2C rebate is the ability to collect high-quality customer data. Data that can then be used to personalize customer journeys, target personalized marketing messages, and more!

We discuss how to make consumer rebates work for your company here.

The Hybrid Incentive Approach Proves The Most Effective

For manufacturers trying to hit serious sales numbers, we recommend employing a combination of all three steps–B2B rebates, SPIFs, and B2C rebates.

• Step one gets your product in the store.
• Step two encourages sales partners to reach their own specific sales goals without a product discount.
• Step three helps your partners clear out leftover inventory and encourages your end customers to make a purchase.

Through each step, there is a major data collection potential. Remember that when planning your incentives and think strategically.

Because we believe in this type of approach and understand that your needs will differ from other companies, we offer flexible incentive program solutions. Together we can determine what your needs are and how an incentive or mix of incentives can help you reach your goals.