How Does Your Sales Channel Want to be Rewarded?
For years, brands have thanked and incentivized their sales channel with branded merchandise and travel rewards. Although beneficial to some participants, others might not be so keen on these types of incentives, thus affecting their motivation to sell – damaging your ROI.
Each channel is different, and the people selling your product have preferences on their payout, so how can you be sure you’re thanking them the right way?
Data Gives Provides Sales Channel Insight
360insights recently led a research study of over 2,500 front-line sales associates (SAs). We asked them the following question:
“Do you prefer cash or merchandised based rewards sales incentive and why?”
99.3% of the sales associates responded that they prefer cash over any other type of reward, and the underlying reason was simple: cash simply fits into people’s lives easier.
A cash incentive allows customers to choose freely what they want to do with their earnings. Whether it be for business, leisure or an emergency: cash is flexible, easy to give and very time efficient.
As an example here are a few sales associate experiences:
Chris, a consumer electronics RSA in Newark NJ asserted
“I am grateful to receive any sort of incentive of course but, for example, last year I won an iPod for the second time in six months and ended up selling it on eBay for $100 and I still had to pay tax on the full retail value.”
Where Jim in California says
“About 60% of my income comes from sales SPIFFs. Now, that’s going right to operating my home, paying my mortgage and just doing the family thing.”
A Case Study
This brings to light a conversation our organization had with a manufacturer who is a disruptive leader in their vertical, and who recently experimented with cash versus merchandise-based rewards program.
Traditionally, the organization offered most of their rewards in the form of branded merchandise. In this very recent exercise, their channel marketing folks came up with a sophisticated and well-executed pilot program to offer a cash or rewards sales incentive to 2,500 of their partners and the front-line sellers of their partners.
In order to get the most conclusive results, pilot partners were selected from all over North America to get the largest possible sample of varying social, economic and even climatic factors in the mix. The channel partners and their SAs were offered their choice of the following:
- Cash payout
- Soft marketing support (marketing/advertising co-op accounts)
- Hard marketing support (banner bugs, custom POP installs etc.)
- Branded merchandise with the manufacturer and partner’s logos.
- Travel rewards
Their findings mirrored our findings almost identically: 98.2% of their partners and SAs were opting for the cash rewards (delivered, in this case, in the form of a branded and reloadable card).
The fact is – cash gives people what they want most in life: control. They get control from the choices and flexibility that money offers. Choosing the right payment method is then crucial to drive more sales and build stronger relationships with your sales channel.
It’s time to start incentivizing your sales associates the right way.