Turning an idea into a viable product for the marketplace takes a lot of hard work and sacrifice. Getting that product in front of the consumers you want to target takes even more effort. The visual marketing—TV commercials, print and web ads—make up a big piece of this. But there’s another big chunk of marketing that businesses looking to move to the next level ought to take just as seriously.
The Hidden Side of Marketing
Even though behind-the-scenes marketing gets little of the glamorous pop-culture focus of visual advertising, it’s no less crucial to a company’s success. You need a good understanding of the inner workings of getting your product onto store shelves and into the hands of consumers. Accomplishing this is a challenge in a marketplace where shelf space is at a premium.
The amount of money spent on advertising matters little if consumers can’t find readily find your product in stores. Once they do have access to it, you need to provide them with an incentive to choose your item over something similar from a competitor.
Providing a Reason
Retailers need a reason to give you the shelf space. Wholesalers need a reason to let retailers know what your company has to offer. Customers need reasons to buy your product.
That’s where incentives come in. Not all incentives are made equal. Let’s take a look at the different options available to help you get and keep your products available on retail shelves.
Understanding Jobber Incentives
Your product needs to be visible and available to consumers to have any shot at success. That starts with getting wholesalers to purchase your products. Wholesalers, or jobbers, take in products from a variety of different manufacturers and sell them to back to retailers at a profit. It’s likely they have shelves stocked with goods from your direct competitors.
What can you do to get jobbers to push your merchandise to retailers over goods offered by the competition? Some ways to do that include:
Incentive their salespeople – Many companies create programs for jobber sales associates that incentive them for every item they sell to a retailer. It can be anything from a straight cash bonus to gift cards.
Offer volume discounts – Provide them with a discount when they purchase a large volume of products from your business.
Your incentive needs to make it worthwhile to the jobber to promote your merchandise to retailers. That gets your product on shelves and within sight of potential customers. Make sure your program is simple and easy to understand. Keep in mind that you still want to make a profit at the end of the day.
Understanding Marketing SPIFF Incentives
Now that you’ve got your product on a retailer’s shelves, you need to convince them to feature them over other similar items. Marketing SPIFFs (Sales Performance Incentive Funds) are incentives provided to retail salespeople when they feature and/or sell any of your products.
The key to successfully using marketing SPIFFs is knowing when to apply them. SPIFFs should be used when your company wants to hit a specific sales target within a short time period. Periods where you might want to implement a marketing SPIFF include:
- Introducing a new product line
- Moving merchandise during periods that are traditionally slower for your business
- To beat back a competitor who might be offering a new service or update
Have an End Game
Make sure that your marketing SPIFF targets your intended audience and work towards a specific goal. You waste time and money if you don’t have a clear objective in mind and put out a program that’s confusing or not beneficial to the retailer in question.
Don’t Lose Focus
Track the success of the marketing SPIFF carefully. Make note of what worked, and what could be improved on the next time you put a marketing SPIFF incentive in place. It’s very easy to let SPIFF programs get out of hand. Limit the number of marketing SPIFF programs you offer throughout the year to keep them from getting unmanageable.
Understanding Rebate Incentives
Unlike marketing SPIFF and jobber incentives, end consumers receive the direct benefit of rebate programs. Don’t get them confused with coupons. Coupons provide customers with discounts before they purchase a product. Rebates get refunded to customers after they’ve already made a purchase, often for the full price of the product.
Here are key points to consider when implementing any type of rebate program:
Bigger is Better — Rebates work best on larger ticket items. Many people won’t be tempted by a minuscule return on a small-ticket item, but are often drawn in by the promise of a bigger incentive on a higher-priced item.
Timing is Everything — It’s usually best to offer rebates when introducing new merchandise or making a major upgrade to it. You’ll often see telephone companies offering rebates to customers trying out a new version of a phone.
Logistics – Is your company capable of handling and processing a large volume of rebate requests? How will customers be able to obtain their rebate? If you’re offering mail rebates, is your company capable of handling a large volume of requests during the time period provided for claiming the rebate? Will customers be able to claim their rebates online? If so, do you have the IT infrastructure in place to make sure that their data is handled securely?
Ease of Attainment – It’s tempting for companies to make it difficult for consumers to obtain a rebate and thus avoid having to reimburse them. All that does is make the customer feel that they didn’t get everything they were promised. People don’t want to return to a company they feel ripped them off. Provide a clear path for your customers to obtain their rebates.
Fraud – It’s important to understand that all rebate programs experience a certain level of fraud. Be prepared to recognize and handle any instances of deception.
Make sure you understand the rules and regulations laid out by the FTC (Federal Trade Commission) when it comes to offering rebates. You don’t want multiple complaints about the way you administered your program.
Building An Overall Incentive Program
The combination of Jobber, marketing SPIFF, and rebate incentives form a powerful weapon in keeping you viable and competitive in the marketplace. Companies like Incentives Insights help companies put together a cohesive incentive campaign They also provide crucial analysis on how each part of your strategy is bearing out in the marketplace. Contact them today for more information on how they can improve your overall business strategy.