You’re probably wondering how to get manufacturers fired up about selling your products. Well, the secret is to use some incentives that’ll make your products too hard to ignore. When you tie your success to theirs, it pays off. But you can’t just throw out random benefits and expect magic to happen. Nope, you have to be steady if you want to build the sales momentum that keeps truckin’.
Imagine watching your sales numbers shoot up like a rocket in just a few months. It’s possible for you with the right incentive strategy. I’m talking about techniques like giving them cash back when they sell more or rewarding them with bonuses when they hit targets. Pitch in on marketing costs or even promise them an exclusive slice of the market pie.
Of course, you have to think it through. You don’t want to blow your whole budget on short-term rewards if it means sacrificing your long-term growth, And you can’t forget about what your competitors are doing either.
If you want your manufacturer partnerships to really improve and watch those sales figures soar, let’s get into the specifics and make it happen!
Cash Rebates And Bonuses
If you want to energize your sales team around a particular product, financial rewards are often the most effective motivator. For example, clearly stating that each unit sold earns a salesperson an additional $500 creates a straightforward and compelling incentive. There is no need for complex point systems or multiple prerequisites – simplicity ensures that your message is both clear and appealing.
Many companies have seen sales increase rapidly after introducing rebate programs. One electronics manufacturer, for instance, experienced a 45% boost in a single quarter by offering a $300 reward per unit. Products that had been slow to sell suddenly began moving much faster once sales representatives knew they could earn extra income.
Cash incentives are also highly effective when launching new products. The potential for additional earnings motivates sales teams to invest the time needed to understand and promote a new offering. Rebates can tap into a competitive spirit as well: when team members see their colleagues profiting, they’re more inclined to jump in and make sure they’re not missing out.
Senior management often takes notice when a particular product starts generating higher commissions for the sales team. This attention can lead to stronger organizational support, further raising the product’s visibility. A key advantage of rebate programs is flexibility: you can adjust incentive amounts as market conditions or business goals evolve. This adaptability allows you to stay competitive or seize new opportunities quickly.
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If you have a standout product, you might offer a larger rebate and still realize a strong return. For products that are already steady performers, a smaller incentive might be sufficient. However, it is important not to rely too heavily on cash rewards. You don’t want your sales force to lose interest once a rebate is withdrawn. Instead, gradually reducing incentives over time often proves more effective than halting them abruptly.
Volume-Based Reward Strategies
Tiered incentive systems work the same way as those games where you get better prizes each time you level up. The more that a manufacturer sells, the bigger the rewards they can earn. Let’s say you’re starting with a 5% commission on the first $10,000 in sales. Once they hit that mark, they start earning 7% on the next chunk of revenue. It’s a good way to keep them motivated and reach for even bigger goals.
Lots of businesses are seeing great results with this, too. One office equipment supplier saw their sales jump by 8% after making the switch. An optical company improved its revenue by 9% just by removing commission caps. It’s pretty clear that progressive rewards are the way to go. Tiered incentives give manufacturers a clear idea of what they need to earn more. They can see each level mapped out in front of them, and it feels like they’re making real progress.
You just don’t get that same feeling with a flat commission structure. Of course, you can’t just throw any numbers out there and expect it to work. You have to think about where you set the tiers. Make them too low, and there’s no challenge. Make them too hard, and you’ll just frustrate people. You want to find that sweet spot that fits your industry.
There are other ways to use volume-based rewards, too. Instead of looking at total sales, you could track year-over-year growth. This is an option if you’re working with a manufacturer who already knows your products inside and out. They’ll love being rewarded for their expertise. Try experimenting with a bonus when a manufacturer moves a combination of products.
It’s an easy way to make sure that everything gets a fair shake. For the long haul, loyalty incentives are where it’s at. The longer a manufacturer sticks with you the more benefits they can get. If they know there’s an exclusive tier of benefits waiting for them they’ll think twice about jumping ship. It’s an easy way to keep them on your team.
The big thing is to match up your incentive tiers with your company’s goals. Are you trying to break into a new market or improve your bottom line? Your rewards should line up with what you’re actually trying to achieve. And don’t be afraid to switch things up if you need to. Keep an eye on the data and make sure that your tiers are doing what you need.
Co-Op Advertising Funds
Manufacturers want to see your product succeed in stores. That’s why they’re happy to invest some money to make that happen through something called “co-op funds.” These are a way for them to help pay for advertising their products. The amount they give you is usually around 1-3% of what a store buys from them. You can think of it as the manufacturer saying, “if you make our things look good, we’ll pitch in some cash for marketing.”
Co-op funds can help a store promote itself. Just to give you an example, if you have a hardware store, you could use the money from the manufacturer to run radio ads. The ads talk about their latest power drill. Or, if you own a little clothing boutique, you might create a window display that shows off a popular designer’s new line. It works because the manufacturer gets more exposure without doing the work themselves. The wonderful thing about co-op funds is that they help solve challenges for everyone involved.
Manufacturers get to have their products featured more prominently and across multiple retailers. And those retailers can tap into marketing resources they might not be able to afford on their own. Savvy distributors find all sorts of innovative ways to make the most of these opportunities. Some might run targeted social media campaigns to connect with local shoppers.
Others host events or product demos in their store to get customers excited to buy. The smartest partners know how to blend the manufacturer’s branding with their own deep knowledge of their market. Co-op funds aren’t always a piece of cake. Sometimes, manufacturers have pretty strict restrictions on what you can and can’t spend the money on.
Approvals can be a real headache and hold up your great marketing plans. Plus, retailers often find the paperwork needed to actually claim the funds to be a total pain. Co-op dollars work best if we watch the results closely. They’re always looking at data around customer engagement and conversion rates from their co-op campaigns.
That info is priceless for making their next marketing moves even stronger and convincing manufacturers to continue supporting them. Manufacturers are expanding past old-school advertising and giving online marketing support, too. That could mean giving retailers pre-made social posts and graphics to customize. Some even let stores access marketing tools that would normally be way out of their budget.
Territory Rights And Preferred Pricing
You’re probably wondering how you can get manufacturers to prioritize your product and work hard to sell it. One way is to give them exclusive territories. Just think about it: when a manufacturer knows they’re the only one selling your brand in an area, they put in extra effort to make the most of that chance and don’t have to stress about competitors swooping in or undercutting their prices.
The drink industry gives a great example of this as exclusive territories are driving good results there. One distributor improved their sales by 35% after they locked down exclusive rights in their state. They knew every sale in that region would be money in their pocket so they went all-in promoting the product. It ended up being a good situation for the distributor and the product owner.
Another way to motivate manufacturers is with pricing structures. Volume-based discounts give manufacturers something to shoot for and raise their sales targets. As they start approaching those new pricing tiers, they sometimes kick things into high gear to reach them. The idea of improving their profit margins becomes a big driving force behind their sales strategy.
There was an electronics distributor that showed how it can be done. They increased their orders by 25% for the sole job of hitting a new pricing threshold. It made sense for them to put in that extra effort because the better margins at the higher tier were worth it. Your product became their top priority because it gave them the best profit.
It’s worth keeping in mind that exclusivity isn’t always a quick way to get engagement. Manufacturers can become too comfortable without competitors keeping them on their toes, so they might not push your product or come up with new ideas. You can help prevent this by doing regular performance reviews. Another factor is that the size of the territory matters in exclusive arrangements – if you give a manufacturer a region that’s too big, it can cause problems.
The most successful manufacturers go to great lengths to hold onto their exclusive status. One tool distributor launched a massive marketing campaign to protect their territory rights while doubling the size of their sales team and blowing their targets out of the water! Losing their exclusivity was a giant motivator for them to step up their game. With these pricing incentives, you want to find the right balance because if you set thresholds that drastically cut into your own profit margins, you might see a temporary increase in sales but hurt your value and overall profitability in the long run. The trick is to come up with incentives that work for both you and the manufacturer over time.
Sales Enablement And Support Tools
You want your sales team to know their stuff about your product. It’s the only way they’re going to be able to sell it. Give them some experience with the strengths and benefits through training sessions. That way, they’ll be ready to manage any questions or objections that come their way when they talk to possible customers. It makes a giant difference.
Marketing materials are tools. Things like brochures, spec sheets and comparison guides help your sales reps during conversations with customers. They’ll be able to help with problems with confidence. And if the materials are well-designed, they make even tough features easy to know for everyone involved. It also helps to make sure that everyone stays steady with their messaging about your product.
Demo units are probably the best tool you can give your sales team. They let customers actually experience your product for themselves before they choose to buy. One food equipment manufacturer saw a 35% increase in orders after they gave their sales team updated demo units. When they were able to show the product instead of just talking about it, it made their pitches way more convincing.
Online resources make product information accessible anytime, anywhere. We’re talking video tutorials, online catalogs, and mobile reference apps. They’re perfect for when customers ask unexpected questions and your reps need quick answers. Having these resources at their fingertips makes your reps feel more prepared and professional.
The right tools and resources create an environment where selling your product can become easier and rewarding for your sales team. Even if you have generous commission structures they might not be enough to drive results if your team doesn’t have enablement. They need the motivation and the capability to succeed with your product. Tracking tools help you find out which resources actually improve your sales performance. CRM systems can give you an idea about which materials your reps use the most before they close deals.
This data is real for refining your enablement strategy over time. You can invest more in what’s working and fix or replace what’s not. At the end of the day, building confidence is a big part of sales enablement. When your reps understand your product, they sell with real enthusiasm. That authenticity comes through in their presentations and resonates with customers. Confident reps are just more successful at turning prospects into buyers, plain.
Level Up Your Incentives and Rewards
The right combination of incentives can make a giant difference in how excited manufacturers get about pushing your products. We have seen how differently manufacturers act when they feel like they have some skin in the game, too. This shared-success strategy is for creating relationships based on trust instead of just being transactional. It does take some careful planning to balance immediate rewards with long-term motivation.
The nice thing is that online places have recently let you personalize incentives to match what each individual prefers. App-based programs give you the real-time tracking and flexibility you need in the workplace. Some positive results could happen if you mixed volume discounts with newer approaches like social recognition or rewards based on experiences. There are so many possibilities opening up for creating incentive structures.
Keep in mind that even the best incentive programs out there need to be evaluated and tweaked. If they’re too tough, manufacturers might just check out. If they’re too simplistic, you could end up with everyone thinking short-term. That perfect balance means you have to listen to your partners, measure your results, and be open to changing things up whenever you need to. The incentive approaches you’re using may be giving you the biggest bang for your dollar.
Putting together incentive programs is like helping you take your business to the next level. At Level 6, we focus on all kinds of incentive programs.
From helping your sales teams perform better to improving employee morale and happiness, we have what you might just need with our expertise. We have services like branded debit cards, employee rewards, recognition programs, and sales incentive programs that are customized just for you. They’re all designed to fit your business needs. Our focus is on creating custom-made programs that drive real results for you.
You can reach out to us for a free demo. See for yourself how we help high performing businesses max out their ROI and sales performance!
Claudine is the Chief Relationship Officer at Level 6. She holds a master’s degree in industrial/organizational psychology. Her experience includes working as a certified conflict mediator for the United States Postal Service, a human performance analyst for Accenture, an Academic Dean, and a College Director. She is currently an adjunct Professor of Psychology at Southern New Hampshire University. With over 20 years of experience, she joined Level 6 to guide clients seeking effective ways to change behavior and, ultimately, their bottom line.
