Dealer Incentives

Besides an attractive trade margin, the firm should provide some special incentives to the dealer so as to win him over and sustain his loyalty to the firm/brand. Sustaining dealer loyalty is the sure route for obtaining optimal retail thrust for the product/brand. Special incentives like quantity rebates, off- season rebates, gifts, cash incentives, etc., can be used for motivating dealers.

With increased competition, companies are now increasingly realizing the role of such incentives. One measure that seems to be catching the fancy of companies is fully-paid vacations for dealers. Companies are also hosting lavish dealer meets at exotic places. For instance, ITC has been taking out whole groups of its dealers on a safari to Kenya. Godrej-GE last year flew over 40 of its best dealers to the US and Videocon sent around 650 of its best dealers to Europe. Even companies, which were giving cash or gold sovereigns as incentives earlier, now seem to have realized the potential of travel abroad as an incentive. The tours are considerably expensive, since the companies try to ensure that they become unforgettable outings for the dealers. The companies concerned seem to spend on an average more than Rs 40,000 per head on dealer holidays. Godrej-GE, which is one of the big spenders on dealer incentive tours, has an annual budget of around Rs 4 crore for this purpose. As the demand for such tours has been going up, some travel houses have started special divisions for corporate dealer incentive tours.

Harmonious Relations and Cooperative Endeavor: Harmonious dealer relations are another important element in dealer motivation. Frequent visits to dealers’ shops by the field sales force of the company/stockiest helps harmonious dealer relations Dealer meets too facilitate this process. They help to exchange ideas and to generally bring the dealers closer to the company;

Dealers need understanding and support. They are happy to receive sales ideas from the salesmen and executives of the firm. Likewise, helpful and prompt attention to dealer complaints

Associating the dealers in various campaigns such as service campaign, promotion-campaign, etc., will cement relations with the dealers. It will also add to the success of the campaign. The firm can even persuade dealers to share the expenditure on service, publicity and sales promotion. Dealer cooperated service and publicity campaigns not only reduce the financial strain of the firm, but are also more effective than stand alone campaigns by the firm. The willing involvement of the dealers in the campaigns does the trick.