With the increased competition in the channel, many crop input manufacturers are using programs to increase revenue. Generally, there are three types of program strategies used to support increasing channel revenue.
To ensure program funds are being leveraged effectively, it’s important for incentives to be linked to desired actions. Areas of consideration with regard to programming concepts are:
- Are you receiving competitive pressure in areas of technology and portfolio support programs?
- Are you focused on growth?
- Are there portfolio complements you need to leverage?
We recommend three strategies to support the successful execution of your marketing programs:
- Tiered incentives
- Category incentives
- Matching incentives
Tiered purchase incentives escalate incentives based on attaining a tier. The goal is to create logical tiers to incentive and lift customer spending from one tier to the next. Tier goals can be determined on many metrics, such as: total sales, acres attained, product SKUs sold, customers sold to, and more. Once a goal is met, an incentive is paid. Tiered incentives commonly provide a percent of sales dollars, dollar per unit, or dollar per acre rebates for attaining a tier goal. Customers may also be rewarded for nearing a tier, and get prorated incentives.
Category incentives involve a group of products and a goal set for the group, typically including at lease two groups with categories. Categories should follow logical groupings of products, such as the product segment. Category incentives help break customer’s targets down to manageable groups and encourage support across multiple product portfolios.
Goals and incentive structure for categories can be the same as tiered incentives. Category incentives have additional options, such as providing an improved incentive across categories for meeting multiple category goals.
Matching incentives involve multiple products or groups of products, and pay on the link between matched products. Matching programs are especially useful with a wide portfolio of products, as they can be used to promote support across portfolios. Matching programs are common at the grower level to encourage use of complementary seed and crop protection products. Most matching programs are designed to provide the maximum incentive to the grower, so if there is a 3-product acre match, and still some acres left over for a 2-product match, the grower would be paid on both.
Long story short…
Combining strategy with a congruent incentive structure creates increased brand loyalty, supports multiple brand use and increases revenue.
Want to learn more about channel programs? Contact us below.