Sales Incentives: Direct Sales vs Indirect Sales
What is the difference between sales incentives and indirect sales incentives?
First, the main difference between sales (or direct sales) incentives and indirect sales incentives is who the salesperson works for. Is their employer the same company who makes the products they are selling? When the answer is yes, it is direct sales. When the answer is no, it is indirect sales.
An example of direct sales would be a paper supply company selling to businesses who will use the products they purchased.
An example of indirect sales would be a manufacturer of computers selling through resellers and distributors who then sell to the end user. The end user could be consumers for personal use (B2C) or businesses for office use (B2B).
In terms of incentivizing sales people, the strategy must be catered to whether you have direct or indirect sales reps. Here are the ways direct sales and indirect sales differ in terms of incentives.
As I mentioned earlier, the main difference between the two types of sales reps depends on who the rep works for. With direct sales, the rep is directly influenced by the employer. As such, if they do not meet a quota, they could lose their job. With indirect sales, there are usually other products or brands that the sales rep can sell, and there is no threat of being fired by the product manufacturer if quotas on their specific brand are not met. Maybe the rep’s direct employer has quotas, but that’s a different situation.
In direct sales, when a sales rep sells a high number of products, their employer knows the numbers and can reward the rep properly. They also gain knowledge about the sale and can use that knowledge to market their products better. With indirect sales, there usually isn’t much information on the salesperson or the products they sell. This makes it very difficult to efficiently market their area from the manufacturer or OEM’s perspective.
Having an incentives program for indirect sales allows companies to not only know who their reps are but also get to know the selling behavior of their sales reps. Where companies who sell through direct sales may already know this information, companies who sell through an indirect sales channel must find out this information in a round-about way. An incentive platform allows these companies to know their users and rewards them all within the same program.
Indirect sales reps usually work for a reseller, distributor, warehouse, or even a retailer. In each of these instances, there is the potential for their employer to sell multiple products and brands. On the other hand, direct sales reps usually only sell their employer’s products and brand. Incentives provide indirect channel sales reps with motivation to sell your company’s specific products as opposed to your competitor’s. A cloud-based incentives program allows channel marketers to get a leg up on brand loyalty.
With direct sales, the employer can easily urge their reps to sell a specific product through simply indicating the goals of that week, month, or quarter. Unfortunately, companies who sell through an indirect channel have little to no communication with their sales reps, and can’t explain company goals. Incentivizing indirect sales reps allows companies to have some form of control over which products are pushed. If product A is performing poorly quarter-over-quarter, companies can incentivize the product and see desired selling behavior.
Direct sales reps usually have a variety of resources available to them in regards to their products. They know how their products work. If they have a question about the product, they can go to their coworkers, boss, their boss’s boss, or an entirely different department to get the information they need. They are connected to the source of information.
Indirect sales reps are not so lucky. When they have a question about a product, it may be possible their employer knows the answer, but it’s not a guarantee. This is especially true if their employer sells multiple products and brands. If you are a company who sells through an indirect sales channel, and your product A just came out with a new update, your sales reps might not know about it. An incentives platform makes sales enablement easier. Further, you can incentivize participating in training modules, or even use training modules as a prerequisite for an incentive promotion! With incentives, you create direct contact with your channel sales reps.
Direct employees will easily benefit from bonuses, time off, parking spaces, commission, or travel opportunities if they exhibit extraordinary salesmanship. Unfortunately, these rewards simply don’t work for indirect sales. Since your company is not responsible for time off or compensation, it is nearly impossible to use rewards in those categories.
However, what will work are rewards that are flexible enough for all your indirect sales reps to appreciate. Some companies like to give their own products as a reward, but after the first few rewards, that gets kind of old. Some other companies like to give a catalog of physical items as if it was a 10-year anniversary. Here at WorkStride, we know your users are motivated by the freedom of choice. That’s why we provide flexible rewards in the form of gift cards. If domestic, users can redeem rewards at hundreds of retailers. We also offer Visa Gift Cards that can be used around the world. Talk to one of our sales representatives for a more in-depth explanation of our reward options.
Make Sales Incentives Interesting
The WorkStride platform has easy-to-use features that allow channel-focused companies to incentivize their sales reps through promotions, games and activities. Whether through automatic rewards, a lottery prize, or a spin-to-win game, your incentive should match your company goals. We will work with you to cater an incentive program to your needs so you can influence your indirect sales reps with fun, meaningful rewards.
Interested in more information? Schedule a demo to learn more about how WorkStride can improve your indirect channel sales through incentives, training, and rewards!