Catalyst

A rewarding time for the channel

Chitra Narayanan | Updated on May 31, 2018 Published on May 31, 2018

Getting personal Companies are trying to make dealer rewards more meaningful and engaging   -  The Hindu

From showering gold to offering scholarships to their kids, companies are wooing dealers like never before – with some help from data and algorithms

Cement firm Nuvoco (formerly Lafarge India) conducts a national-level singing competition for the family members of its dealers. A high-engagement activity, it gets participation from nearly 42 per cent of its membership base.

Another large cement major awards its dealers’ children who have obtained high marks. This is a big hit in the southern and eastern regions, especially.

A mutual fund brand held 50 health camps all across India for its affiliates, following it up with health tips in e-mails

It’s a rewarding time to be a dealer today as companies are going all out to woo their channel partners, offering innovative incentives and engaging experiences.

“Channel sales loyalty programmes have changed quite radically from the not so distant past when junkets to Bangkok for dealers achieving sales targets was the norm,” says Lloyd Mathias, former marketing head - PCs at HP, Asia-Pacific. “Today, a lot more planning and science goes into this,” he says.

And why not? The dealer networks are extremely important for companies, contributing 70-80 per cent of their sales. For certain categories such as cement and paints, the percentage is perhaps higher. So, borrowing a trick or two from credit card loyalty programmes, many companies now have personalised rewards and recognitions schemes for their dealers, affiliates and key influencers. These are points-based programmes designed by behavioural economists that can be earned and burned, and are tweaked in such a way that a dealer can easily earn himself a Honda City rather than a Brio by delivering better sales.

Thanks to Whatsapp and Facebook, companies are now able to engage and draw in key influencers such as masons, contractors and engineers into their loyalty programmes, which are usually in tiers – silver, gold, platinum. From a toaster to a sedan, the increase in the choice of the rewards offered has been humongous. Many members now prefer to do their own shopping and ask for Amazon e-vouchers.

“There is now a clear recognition that not all channel partners needs are similar,” says Mathias.

“We capture feedback from the channel during annual surveys and build the suggestions into our programme,” says Madhumita Basu, chief of sales, marketing and innovation at Nuvoco.

“Data is at the forefront of these personalised offers,” says Leena Basrur, CMD of Direxions Marketing Solutions, one of the most experienced channel sales loyalty companies in India.

Direxions has now moved to the next level, introducing an analytics and artificial intelligence-driven programme called Chanelitix, or Channel Analytics Suite. An intuitive platform that gives insights and predictions, Chanelitix has already been deployed in a couple of places, says Basrur.

Science and planning

With this, at the click of a button, the national sales manager or even an area sales manager at a company can get the dealer transaction data, see achievement of targets, growth trends, what a specific wholesaler is buying and what he is not buying and start personalising targets and rewards.

Explains Basrur, “ Supposing a company has annual sales target of 15 per cent growth. Using data from its loyalty programme, the AI element kicks in with an ability to predict which dealer can deliver how much, based on their performances in the past.”

The loyalty programmes are cleverly used by companies to nudge sales. For instance, if sales are sluggish in a particular region, they can tweak rewards and incentives there in real time since dashboards are available.

Technology has made the whole rewards system an extremely flexible one, says Prasad Poosarla, chief technology officer of BI Worldwide (India), a global engagement agency. It has also made it a very transparent process.

Removing bias

In the old days, many point out, incentives often caused much heartburn as some amount of bias existed. Plus, there was some fudging.

Now as Madhumita Basu points out, “An automated process makes the system more transparent and reduces the scope of bias. The rewards points given are directly calculated from the system-generated sales reports.”

Also, as she adds, “Once the dealer decides which item to redeem, the entire process is taken over by the third party who fulfils the redemption by directly sending it to the dealer, thus eliminating any form of re-direction and pilferage.” BI’s Poosarla points to how leader boards are bringing in transparency and a spirit of competitiveness to the rewards system. “For instance, if there is a channel programme with 1,000 partners, they get to see who is the leader in terms of points.”

Building emotional connect

While the points-based loyalty programmes are getting very exciting, a key challenge for companies is that everybody has them. To avoid the pitfall of commoditisation, Basrur says, what is needed is to differentiate by building surprising and delightful engagement and recognition that matters.

Mathias describes how smart companies are increasingly focusing on intangibles and long-term emotional payoffs. “For example, there are companies that appoint key channel partners to their Channel Advisory Board. That serves as recognition and builds loyalty while ensuring these partners get personal time with the companies’ senior management,” he says. “Also, many of these advisory board meetings are hosted at corporate headquarters,” he adds.

“What we believe is you should treat your channel like how you treat your employees. Understand their personas better and you get better performance,” says Poosarla.

BI Worldwide believes in handing out badges of honour to high performers as recognition is as important as rewards. “When a dealer gets a badge for being the most successful partner, he would not like to lose it the next year.”

Involving families also makes a big difference as they are key influencers in how points are redeemed. Nuvoco, besides organising singing competitions, also has accident and health insurance for dealers and their family members. Basrur reveals how, for one company, they designed a calendar which featured the art of its channel partners’ children.

Educational perks are now gaining a lot of currency too. For top dealers (platinum tier members) of one of its clients, Direxions got an IIM to create a weekend course with customised content in local language – a truly innovative engagement.

While these are new trends, there are some constants. Gadgets and foreign trips are ever popular. But it is gold that reigns supreme as an incentive. “The gold economy of the country is single-handedly propped up by channel loyalty schemes,” jokes a sales head at a company, who says that when all else fails, companies quickly resort to a golden incentive.

Published on May 31, 2018
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