Loyalty Programs by definition are as old as trade itself. The first tradesman who sold goods to customers would have added some bonus to ensure repeat business which is the core definition of loyalty programs if one sees past the frills. Convincing business professionals on the need for a loyalty program is akin to preaching to the choir. This series however lists the benefits of running a professionally managed centralised loyalty program to trade partners.
The first post of the series covers the key operational benefits of such programs.
1. Fidelity of Communication
Communicating to the trade partners about the latest offerings, products and schemes is of paramount importance in any sales organization. Relying on existing channels greatly lengthens the timeline of communication and distorts the message. By the time the information is passed to the last mile, the message gets garbled and most of the time is lost. Relying on centralised communication through third party would ensure timely communication in exactly the same template as desired. This would lead to channel partners taking full advantage of the communication.
2. Fidelity of Payments
In traditional channels of general trade, payments are disaggregated and rely on multiple stakeholders passing on the payments down the line. Leakage in the channel is the biggest grievance raised by channel partners who don’t get the due benefits. Routing the payments through third party ensures fidelity of payments through complete tracking and paperwork.
3. Price Control
Traditional method of rewarding channel partners is through discounts or cash schemes. While these are very easy to run in-house, most of the times these schemes directly lead to price breakdowns in the market as the discounts are passed on further. Having a long term reward based loyalty program would reduce this to a great extent as the rewards are not easy to liquidate and discount.
In the next post we will cover the benefits of relying on experts who run loyalty programs for multiple companies.